Businesses are increasingly moving from legacy systems to Software as a Service (SaaS) solutions. SaaS systems are predominantly cloud-based, they are more user friendly and are much better at scaling with your business. Legacy systems, while reliable and often deeply embedded in the organisation’s processes, are not designed to work seamlessly with newer technologies. This makes integrating the two very challenging, often resulting in inefficiencies and security risks.
This post will explore the key challenges of integrating SaaS with legacy systems and offer practical strategies for overcoming them. Whether you are considering a migration or looking for ways to enhance your existing integration, the following insights will help ensure smoother transitions and better outcomes for your business.
Understanding the Integration Challenge
Legacy systems refer to older software or technology that continues to serve a critical role in an organisation. These systems could range from on-premise ERP platforms to homegrown databases and custom applications that have been developed over many years. While these systems have been built and refined to handle specific business functions, they were not designed to interact with the modern cloud-based applications that many businesses now rely on.
On the other hand, SaaS platforms are generally designed to be flexible, scalable, and easily accessible via the internet. They provide many benefits, including lower upfront costs, regular updates, and increased collaboration, making them appealing to organisations looking to stay competitive. These can include anything from CRMs, to ERP systems, to MES.
However, the difference in underlying architecture between legacy systems and SaaS creates friction. The traditional systems are often built around siloed data storage, with proprietary formats and closed communication protocols that don’t play well with the APIs and open standards commonly used by SaaS solutions.
Key Challenges of Integration
Data Silos and Incompatibility
One of the most significant hurdles in SaaS and legacy system integration is dealing with data silos. Legacy systems often store data in formats that are incompatible with modern cloud-based solutions. Without a unified data structure or consistent data formatting, it can become difficult for SaaS applications to retrieve or process the information stored in legacy systems.
Source: https://estuary.dev/why-data-silos-problematic/
For example, if you are using an old accounting system that stores financial data in flat files, while a new CRM stores information in a cloud database with a more modern schema, the two systems might struggle to communicate effectively. This often results in duplication of data, increased manual effort, and the potential for errors when data needs to be transferred or accessed across systems.
Complex Customisations in Legacy Systems
Many legacy systems have been heavily customised over time to meet the specific needs of the business. These customisations can be a double-edged sword. While they may have provided unique advantages in the past, they often make integration more complex. Customised legacy systems may not have the necessary API capabilities or pre-built connectors to interface with modern SaaS tools. This makes it difficult for organisations to leverage automation or simplify workflows.
Integration Costs
Integration can become expensive, especially when custom development is required to bridge the gap between SaaS and legacy systems. Developing middleware, building custom APIs, or purchasing third-party connectors can add significant costs to the integration project. For organisations with multiple legacy systems, the integration effort can quickly grow in scope, making it harder to estimate the total cost.
Security Risks
Security is always a concern when integrating two disparate systems. Legacy systems are often built with outdated security protocols that may not align with the modern security standards of SaaS platforms. This discrepancy can introduce vulnerabilities, making it easier for cybercriminals to exploit weaknesses and gain access to sensitive data. Ensuring that your cyber security is tight and data is securely transferred and stored while meeting both systems’ security requirements is crucial for protecting the business and its customers.
Resistance to Change
Resistance to change is a natural part of any transformation process. Employees accustomed to using legacy systems may be hesitant to adopt new cloud-based SaaS applications, particularly when the integration process requires learning new tools or adjusting to changes in workflow. Without proper change management strategies, employees may resist or delay the integration process, leading to inefficiencies and frustration across the organisation.
Managing Legacy Systems Maintenance
Even after integrating SaaS solutions, legacy systems require ongoing maintenance. If integration is done incorrectly or without enough consideration of long-term system needs, businesses may find themselves stuck maintaining both legacy and new SaaS systems simultaneously, further driving up costs and creating inefficiencies.
Overcoming these Integration Challenges
Despite these challenges, there are ways to successfully integrate SaaS solutions with legacy systems. The key is to plan ahead, manage expectations, and take a methodical approach to integration. Below are several strategies that can help businesses address these challenges:
Assess Your Legacy System’s Compatibility
Before you start integrating SaaS solutions, it’s essential to assess the compatibility of your legacy systems with the tools you want to adopt. Conduct a thorough audit of your current technology stack to understand the strengths and weaknesses of your legacy systems. This audit should highlight potential integration challenges and provide insight into which systems are worth keeping and which should be replaced or modernised.
Some legacy systems may be at a point where they can be decommissioned in favour of a more flexible SaaS solution, while others may only need a middleware solution to facilitate integration. Knowing where your systems stand will help you decide the best course of action.
Leverage Modern Integration Platforms
Modern integration platforms, also known as Integration Platform as a Service (iPaaS), can help bridge the gap between legacy and SaaS systems. These platforms provide pre-built connectors, APIs, and automation workflows to facilitate the exchange of data between disparate systems. For example, ERP system Oracle NetSuite is frequently integrated with legacy systems using iPaaS companies such as Celigo and Datablend. By using an iPaaS solution, you can streamline integration, reduce development costs, and improve efficiency.
iPaaS solutions can also scale with your business, allowing you to integrate additional SaaS applications or legacy systems in the future as needed.
Source: https://www.spiceworks.com/tech/cloud/articles/top-ipaas-companies/
Standardise Data Formats
One of the most critical aspects of integration is ensuring that data can be easily shared between systems. Standardising your data formats across legacy and SaaS systems can significantly reduce friction. This may involve normalising data into a common format that both systems can understand, or implementing middleware solutions that can handle data transformation in real time.
Data governance plays a key role here. Having a clear strategy for how data will be formatted, processed, and stored will help ensure smooth integration and consistent data quality across systems.
Focus on Incremental Integration
Trying to integrate everything at once can overwhelm your team and cause costly disruptions to your business. Instead, take an incremental approach. Start by integrating one or two systems and focus on solving smaller, more manageable problems. Once you’ve ironed out the kinks in the initial integrations, you can scale the solution and integrate other systems over time.
An incremental approach also helps manage risk, as it allows your team to learn and adapt to the new integration process before tackling larger, more complex projects.
Prioritise Security in Your Integration Plan
Security must be a top priority during integration. Make sure that any integration solution adheres to the security standards required by both your legacy systems and SaaS platforms. Ensure that data is encrypted during transmission and at rest, and that your integration tools comply with relevant regulations (such as GDPR or CCPA).
Additionally, regularly review security protocols and conduct vulnerability assessments to ensure that any gaps between the legacy and SaaS systems do not expose your business to unnecessary risk.
Invest in Training and Change Management
Successful integration also requires an effective change management strategy. Provide your team with the training they need to use the new SaaS tools effectively, and communicate the benefits of the integration clearly. For an ERP integration for example, many clients utilise their ERP implementation partner to provide training and get people confident working with the system.
Keep in mind that integration isn’t just about technology; it’s about people. Involving key stakeholders early in the process and addressing their concerns can help reduce resistance to change and improve adoption rates. Clear communication, robust support, and an open line of feedback will ensure a smoother transition.
Conclusion
Integrating SaaS with legacy systems may seem daunting, but with the right strategies in place, businesses can overcome these challenges and achieve a more connected, efficient technology stack. By carefully assessing your systems, choosing the right integration platform and taking a methodical approach, you can achieve a seamless integration.
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