Enterprise firms are losing hundreds of millions every year to outdated infrastructure and mounting technical debt, according to new data from Pegasystems, with large companies struggling to modernise fast enough to keep costs in check.

Polling more than 500 IT decision-makers across the UK, North America, and Europe, the study found the average global enterprise wastes more than $370 million (£276m) a year due to outdated tech.

Legacy transformation projects are by far the biggest contributor towards this astronomical cost, accounting for nearly $134 million (£100m) wasted each year on their own, with Pega saying that these organisation-wide modernisation efforts are being hamstrung by an overreliance on outdated, labour-intensive processes that no longer fit today’s pace.

Trailing behind, the study found that $58 million (£43m) is lost to failed transformation efforts hampered by outdated systems and applications, while another $56 million ($42m) is spent annually on maintaining, updating, and integrating legacy infrastructure.

The spiralling costs of using legacy systems is leading to frustrations for IT leaders, with more than three-quarters (78%) agreeing that the time, money and effort spent maintaining outdated applications could be used more productively on other projects to make the business more effective. 

Asked why they had not already removed support for legacy systems, more than a third (36%) said it was too time-consuming to do so, while 29% were too busy firefighting problems caused by these systems to address the root cause.

However, Pega’s survey also revealed a dangerous dependence on outdated technology, with two-thirds (63%) of respondents saying they depend on anywhere between one and 10 legacy applications in the front and back office on any given day. Worryingly, more than a quarter (29%) depend on between 11 and 20 legacy applications.

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As if losing out on tens of millions every quarter isn’t enough, the study found that delays in updating baseline systems are causing firms to stall in their digital transformation efforts. Less than one in ten (9%) said they are in a position to fully retire or replace all their legacy applications – suggesting technical debt problems aren’t going to go away any time soon. 

“It’s no longer acceptable to depend on systems that are no longer fit for purpose, take valuable resources to replace, and which could be the difference between your organisation’s success or failure,” said Don Schuerman, chief technology officer at Pega.

“The time has come to turn tech relics into modern, cloud-ready, AI-enabled applications that deliver transformed outcomes to your customers and your business.”