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Legacy Application Modernization: How to Cost-Effectively Modernize HR Systems

legacy application modernization
Alexandre Diard
legacy application modernization

Is it possible to modernize your outdated HR systems without breaking the bank? Until today, modernizing legacy applications such as outdated payroll systems or even an on-premise HRIS required a rip-and-replace initiative which can cost a lot of money and take a long time to implement.

Organizations today are looking to become more agile and get more flexibility in their HR systems. Frankly, they are just a bit tired of the expense and headache of some of the monolithic traditional HRIS software that’s out there.

When it comes to upgrading and scaling their HR tech stack, one thing that organizations are often concerned about internally but don’t talk a lot about among the industry is cost. With the HR technology space shifting and starting to introduce more cost-effective technology strategies, it’s time for that to change.

Related articles:

- Why the Future of HRIS is Composable Applications
- How to Effectively Upgrade and Modernize your HR Applications


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What is a Legacy Application?


Any outdated software, technology, or language that an organization utilizes is referred to as a legacy system. Although a legacy application can continue to be employed and may even be critical to the organization, it comes with a slew of issues due to technology, architecture, or functionality that obstruct the business or IT.


The Problem with Legacy HR Applications


You know that your HR system is a legacy system when you start experiencing problems or challenges because of your outdated technology. These problems could include:

  • Increased maintenance and upgrading resources, including costs and time

  • Performance issues that prevent you from scaling your HR processes

  • Inability to adapt to changing employee/customer expectations

  • Your system no longer supports certain 3rd party applications or vice versa

  • Your technology is not able to integrate with newer technology

  • Increased risk of security or compliance violations

Inevitably, rapid changes in the world of work combined with the fast pace of technological advancements will leave us with legacy systems in all departments including HR.

But there is a way to avoid this inherent inflexibility and lack of adaptability that we see in many HR systems today.


Why Modernize a Legacy Application?


In addition to avoiding all the problems that legacy applications can cause as outlined above, there happens to be a business case for modernizing instead of replacing or developing in-house systems.


The first reason is change.

Most HR systems are in place for about six to seven years, and some are, of course, much older. Many of these systems still function and get the job done. But the world is changing, and employee expectations are not the same as they were when these legacy applications were put in place.

In fact, 77% of employees are saying that they’re frustrated with their HR technology. That number alone should tell you that it doesn’t make much sense to implement a system that is designed to stay in place for a long time, but in less than a decade, it will once again become a legacy system.


The second reason is cost.

On average, HR technology costs increase 24% per year. At the same time, the average number of applications used is increasing 59% every year. This means that HR teams need more systems to cover their needs and costs are increasing with little ROI in terms of capabilities.


And lastly, feature bloat.

A study found that only 80% of features within applications are actually used. This is common among performance management modules for example. You might only need to use a basic performance rating and survey function, but instead pay for a module that does a lot more than you may need. In this case, you end up paying an additional cost per employee for something that’s not customized to your company’s needs.



How to Modernize Your HR Systems


Until now, modernizing HR applications meant taking out your legacy system and deploying a brand-new, user-friendly system in its place. As we mentioned, this could get expensive and take a toll on your employees and HR teams. In addition to change management, you risk losing critical business and industry knowledge that come with years of using your legacy system. So, what’s the alternative?

You can keep your existing systems, such as payroll systems, time systems, certificate tracking systems, etc. and modernize them by giving them more functionality. For example, you can add mobile access to things such as accrual balances or paystubs, create automated workflows, or create reports and dashboards. Luckily, you don’t need to but a whole new suite of software to do all that.

In the next section, we will introduce an approach that is much more cost-effective, gives you more functionality and is flexible enough to fit your particular company needs: composable applications.


Introducing Composable Applications

Composable applications allows you to – hence its name – compose an HR system made up of multiple sources of information. These sources could include legacy systems, new HR technology, or even other business applications that make up the employee experience.

The composable approach is a little different than what we are used to thinking of as an HRIS. In a traditional HRIS, you have one screen for a particular module and another screen for a different module. With a composable application, you can compose your own view using data from other applications in on place.

For example, in an employee profile you may have compensation page which displays data from a salary benchmarking service, hours worked from your timekeeping system, the salary history and performance scores. This can then be used for reporting and making merit-based salary increases, for instance.

This can be done by connecting all your systems and tools to a platform that centralized all your data and processes using APIs and smart connectors.

This is the way that enterprises will deploy software in the future. Among several reasons, the most impactful are the flexibility and agility it enables. It eases the pain of maintaining or replacing existing applications.



PeopleSpheres Smart Connectors


PeopleSpheres has designed a platform that centralizes an organization’s HR data and processes by connecting any tool to build a software environment that is cohesive, intelligent, and simple to use.

Unlike data-connectors, which merely synchronize data, the smart-connector also considers the user experience by allowing data to flow in and out of the platform, keeping it up-to-date and creating a smooth employee experience.

If you are ready to start modernizing your HR technology the smart way, PeopleSpheres may be the solution you need.

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