When COVID hit in 2020, New Jersey’s unemployment program became flooded with applications, breaking the system that administered the program and crashing its website.
The situation embarrassed the State, and the humiliation was made even worse when Gov. Phil Murphy desperately announced in a press conference that the state needed COBOL programmers to fix the problem.
COBOL is a programming language that dates to 1959, and the disruption in service laid bare how dated the state had allowed its technology to become.
Most universities have not taught COBOL in their computer science programs since the 1980s.
“You can’t bring the old experts out of retirement or out of their grave to help you when something breaks,” said Philip Yu, Cheetah’s Director of Products. “Use those systems at your own peril.”
Old tech: “When is that breaking point?”
The problem with COBOL and other dying languages like Fortran and BASIC, isn’t contained to the dusty halls of slow-to-change government bureaucracies. According to Reuters, 43 percent of core banking systems in the U.S. still run on COBOL, and COBOL still powers 95 percent of ATM swipes.
The reasons for banking and financial services’ dependence on outdated languages and mainframe technologies vary, but it mostly comes down to an “if-it-ain’t-broke-don’t-fix-it” mentality. That foundational code is now buried under layer after layer of new technologies and new functionality, stacked and woven together over the course of decades.
Yu compared the risk to owning a house with old plumbing.
“We know it’s going to rust out and burst anytime soon,” he said. “But to yank the old plumbing out is costly. But when is that breaking point? That’s a dark secret. Those legacy providers aren’t going to come out and talk about this. Because old technology is their cash cow.”
Beware of opportunity cost with legacy providers
But the problem isn’t just about your risk, it’s about opportunity cost, too.
Those core systems are incapable of keeping pace with the modern business environment, and they stifle growth, according to Yu.
The reason is that old code can’t take advantage of powerful cloud computing.
Cloud computing is a transformational advancement. Businesses can harness its force and ride it like a tailwind toward a brighter future. Cloud computing allows businesses to leverage artificial intelligence and machine learning, to automate high-volume tasks, and more.
But having old technology at this moment is like having a sail that’s way too small for your boat. You can’t capitalize the available potential, and you’ll get left behind by those who do.
Modern technology built specifically to leverage the power of cloud computing is often called “cloud native.”
Cloud-native technology can use cloud computing to scale up processing power exactly when a client needs it, accommodating increased demand during business cycles.
“A great example is that in how we handle client statements,” Yu said. “We can do that overnight whereas some legacy systems have to do it over many days.”
Simply put, faster processing means that employees are getting work done faster, which creates time in the day to focus on client relationships and business development.
Furthermore, cloud-native providers can deliver much faster turnarounds on software updates and innovations, especially those that take into consideration ideas from clients. And they can do it in a way that doesn’t result in downtime for the user.
“The speed of innovation, that’s where cloud-native providers are different,” Yu said.
Not all SaaS providers are equal
Cloud technology has allowed some legacy providers to outsource their hosting infrastructure to a cloud and deliver their software over the internet, a concept known as Software as a Service, or SaaS.
SaaS truly is a better way to deliver technology. But for these providers, adopting a SaaS model is mostly a ruse meant to create the appearance of innovation.
All they have done, essentially, was move their aging technology behind a new front door with better curb appeal.
Yes, the browser-based interface is probably easier to use and looks modern. But the foundational technology is still old, vulnerable, and slow.
So, how can you determine who really has the modern goods and who is propping up a dying system like a software version of “Weekend at Bernies”?
Yu says you have to ask the right questions.
“Tell me about your foundational technology,” Yu said. “Tell me about how fast you are delivering your updates.”
Cheetah is different
Cheetah has been in the trust accounting and administration software business since 1987.
And more than a decade ago, it made the bold decision to build a modern, flagship platform from the ground up using current technology and best practices. This sets Cheetah clients up for dependable, growth-empowering service for decades to come.
“It took courage,” Yu said. “But we did it because it was the right thing to do for our clients.”
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