Your Outdated Technology Stack: Smart Decision or a Sunk Cost?

Would you choose your current tech stack if starting today? Likely not, with the rise of cloud computing and ever-changing tech. Outdated technology can cause performance issues and security risks. Avoid sunk cost fallacy by focusing on current needs, setting clear criteria, and transitioning to modern, secure technology.

outdated technology

How would you approach technology if you were starting your business today? Would you choose the tech stack you currently have in place?

For most business owners, the answer is NO!  

Cloud computing has changed the technology world so dramatically, that if you started over, you’d probably standardize on cloud-based software.

However, if you’re like most businesses, you may be still using:

  • Outdated versions of locally installed software 
  • Physical servers, located in your office building
  • Excel spreadsheets and Access databases to connect disjointed systems

The question to ask yourself is, “WHY are you continuing to use outdated technology?”

Are you being smart by stretching your technology budget?

If your business is running smoothly as-is, there’s no compelling reason to change what you’re doing. For all the talk of the ROI on digital transformation and technology modernization projects, there’s no question that overhauling your tech stack can be disruptive.

Check to be sure you’re not experiencing:

  • Slow performance
  • Data security risks
  • Scalability concerns
  • Integration problems
  • Or increased maintenance costs

If none of the above apply, you’re probably smart to wait. Save and plan now for a future technology modernization project.

Are you running software that’s been highly customized?

This situation can be tricky. Just because software is older doesn’t mean it’s not good. The question is how well the software has been maintained and whether the solution is still supported by the software vendor. Unsupported software can create a security risk. Additionally, if you don’t have the proper structure and discipline as you make updates, over time, software customizations can get messy. Fewer people will remember why decisions were made.

If your software is becoming difficult to support, start investigating options while your situation is not urgent. You’ll have a better outcome with more time to plan.

Are you suffering from sunk cost fallacy?

Sunk cost fallacy is the tendency to continue investing in something because you’ve already put so much time and money into it. We all fall for it at times. Our judgement is clouded because we’re too close to the problem. For example:

  • We’ve had clients come to us asking for highly complex customizations that could be easily purchased for a fraction of the cost by doing a software selection search.
  • We’ve had clients ask us to quote the cost of a server replacement, only to realize that they no longer really need an on-premises server.
  • We’ve had clients limp along for years, doing tasks manually because they never stopped to consider how they might use technology to their advantage.
outdated technology stack software selection

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Use our software evaluation spreadsheet to make your next software selection

4 Ways to avoid sunk cost decision making

Before you continue to invest money in older technology, take a step back.

1. Focus on your current needs

When making decisions about your tech stack, base your choices on current needs and future benefits rather than what you already have. For example, we had a client who built out a robust on-premises eCommerce platform that worked beautifully for a long time. Today, however, they can cut down on maintenance costs and security risks by moving to the cloud. No matter how much they invest in the old platform, it will not provide the scalability, security and performance of a new platform.

2. Set clear criteria for decision-making

Establish clear, objective criteria for evaluating whether to continue investing in a particular technology or project. This can include performance metrics, cost-benefit analyses, and alignment with business goals.

3. Ask for advice

We are here to help you. Please reach out to us before you make big technology decisions. Because we’re a step removed from the situation, we can provide an unbiased perspective and help you avoid emotional attachments to past investments.

4. Accept mistakes and move on

Accept that not all past decisions were great decisions – or that the situation has changed. Use those experiences as learning opportunities.  

Maybe in the past, you planned for your business to move in a certain direction, but it never happened. For example, we had a client who was sold on a expensive high-end CRM system. They thought they were going to hire a bunch of salespeople, but never did. Meanwhile the company continued to pay licensing fees as the software collected dust. Let it go and start over.

Rebuilding your tech stack the right way

We can help you take a phased approach to modernizing your business systems, minimizing disruptions, and providing incremental improvements. We advise you to select technology solutions that:

  • Focus on scalability and flexibility. Choose technologies that can scale with your business. Cloud-based solutions can offer flexibility and scalability, enabling your tech stack to grow with your needs.
  • Prioritize integration capabilities. Ensure that the new technologies you adopt can integrate seamlessly with existing systems or other new components. APIs and middleware solutions can facilitate smooth communication between different parts of your tech stack.
  • Emphasize security and compliance. Security should be a top priority in your new tech stack. Select technologies that offer robust security features and ensure compliance with relevant regulations.

Should you start over?

Let’s talk! We can help you build a tech stack that not only meets your current requirements but also positions your business for future success. Book a call with us today and we will guide you as you explore the possibilities.

Explore the possibilities
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Frequently Asked Questions

What is sunk cost fallacy in tech?

Sunk cost fallacy is the tendency to follow through with something we’ve already invested in, even when it’s clear that it would be more beneficial to abandon and rebuild. For example, you may have spent a lot of money on your business tech stack back in the day, but with how much has changed, it’s better to rebuild instead of trying to continue to tweak your outdated pieces.

How do I avoid sunk cost with my technology?

Before you continue to invest money into outdated technology, take a step back.
1. Focus on your current needs
2. Set clear criteria for decision making
3. Ask an expert for advice
4. Accept mistakes and move on

Best way to rebuild my tech stack?

If you’re tired of your outdated technology and need to rebuild your tech we advise you to select technology solutions that:
-Focus on scalability and flexibility
-Prioritize integration
-Emphasize security and compliance

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