Everyone understands that technology is advancing at breakneck speed, but sometimes it’s hard to quantify the rate of change. One way to measure technological advancement involves examining patent records, and when The Atlantic did so, it noted that “in the first decade of the patent office, the U.S. granted 229 patents—the same amount today’s America grants every 7.2 hours.” What’s more, consumers have come to expect that businesses will stay ahead of the technological curve. A survey conducted by Microsoft discovered that 80 percent of users will leave a website prior to making a purchase if it is out of date, and nearly two-thirds stated that they would be likely to repeatedly purchase from a technologically savvy business.
Of course, expecting technological advancement in a retail or corporate context is far different than when dealing with a utility company — right? After all, isn’t it true that utilities don’t need to be quite as technologically nimble as other organizations? Not at all. While it’s true that utilities often have a more secure customer base, the cost of using old technology impacts them just as much as any other business, if not more so. In this article, we will discuss the specific expenses incurred by the use of obsolete technology and the risk of using outdated technology.
The Main Costs Behind Outdated Technology
Businesses that don’t use technology in an effective or efficient manner rarely intend to fall behind the curve. Instead, they often get so caught up in their day-to-day affairs that they fail to notice how out of date their technology has become. For example, industry periodical Government Technology reported, “In April 2020, New Jersey’s governor, Phil Murphy, stepped up to a microphone and told journalists that he was amazed the state still ran its unemployment system on COBOL — a 60-year-old programming language. The state was having trouble keeping up with the massive surge of unemployment insurance applications coming in amid pandemic lockdowns, and it needed volunteers who knew that archaic language to use its own decrepit technology!”
The consequences of using COBOL was hardly a hidden cost of technology for the Garden State; its impact was obvious. But you may be surprised to learn what the cost of not upgrading software and hardware — especially when it comes to utilities.
The Identity Theft Resource Center noted that there were 1,108 tracked U.S. data breaches in 2020, stating that “ransomware and phishing attacks directed at organizations are now the preferred data theft method by cyberthieves.” However, those aren’t the only tools that bad actors can aim at utilities. Using software that’s unapproved or no longer updated represents a substantial security risk. Security Intelligence reported that hackers used an employee-installed VPN to gain access to the networks of Colonial Pipeline Co. in 2021. This led to the company shutting down its operations, which prompted a region-wide energy crisis.
It’s tempting to think that such crises are isolated instances that your utility will never have to face. Sadly, though, security breaches in the utility sector are more common than you might think. A white paper published by information technology company Zones revealed that 73 percent of utility IT professionals have had to manage at least one security breach. Using outdated software greatly increases that risk.
Outdated technology can appear to work just fine — at least until the time to change it arrives. Virtually all utilities will reach a point where they need to introduce new systems or try to migrate old services or data to a different platform. That’s the point at which the real cost of old software and old computers still in use become apparent.
Sometimes new tech or new software won’t talk to the old equipment. Sometimes migration may require the introduction of a third-party bridging solution or manual re-entering of information or costly specialized technical support. (See the “Cost of Support” section below.) All of these difficulties can be easily avoided with a little forward focus and willingness to invest in staying technologically current.
Sometimes, utilities lose data due to old technology because they simply can’t collect it in the first place. The Santa Fe New Mexican reported that the Public Service Company of New Mexico ran into trouble in its campaign to replace burnt-out lights simply because it couldn’t identify them. “Until the city and PNM complete the sweeping streetlight conversion project, the utility company has no way to know if streetlights are out unless residents report them, PNM spokesman Raymond Sandoval said.”
Other times, data can simply disappear. Antiquated storage methods can cause data corruption, also known as bit rot or data rot. If that information isn’t supported by redundant systems, it’s gone forever.
When systems fail to talk with one another, collaboration suffers. Too often, information gets siloed into spreadsheets or has to be manually transmitted from one utility department to another. This means that teams have to work much harder just to connect with one another and do ordinary work — if they attempt to work together at all.
Cost of Support
In his 1987 science fiction novel Count Zero, William Gibson wrote about an online-savvy conman dubbed The Wig who realized one day that “silicon doesn’t wear out; microchips were effectively immortal. The Wig took notice of the fact. Like every other child of his age, however, he knew that silicon became obsolete, which was worse than wearing out.” Indeed, obsolescence can prove worse than breakage and not just because it allows ne’er-do-wells like The Wig to commit cybertheft.
The cost of support for such outmoded equipment may not seem as sinister as online crime, but it can be just as expensive. Companies can’t afford to support older products forever, and when troubles arise with them (as they inevitably will), the price tag for someone who can deal with them will inevitably be high.
Productivity Takes a Big Hit
Old tech invariably leads to delays, frustration, and general inefficiency. We’ve discussed at some length how utility companies must endure the expense of antiquated software and hardware. However, it’s employees who must interact with it on a daily basis, and that can cause serious morale problems. In some instances, a refusal to transition to more up-to-date solutions can even increase employee turnover.
You’ll Lose Customers to the Competition
Utility deregulation is a reality only in a minority of markets. However, in those spaces where private companies supply utility services, falling behind on the technological front can spell doom. Customers don’t want to stick around when they’re being serviced by lackluster tech.
Calculating the Risk of Running Old Software and Technology
How much of a risk does running old software pose to your utility? While that’s a difficult question to answer, we think we have a few quantifiable sums that you can measure against the cost of new technology. They include the following:
- CNBC reports that cyberattacks now cost companies $200,000 on average.
- HR consulting firm Robert Half reports that “professionals waste 22 minutes each day, on average, dealing with IT-related issues.” (Increase that number for antiquated technology and then compare it to employees’ salaries to get a better handle on the expense.)
- PricewaterhouseCoopers reports that “73 percent of people surveyed say they know of systems that would help them produce higher quality work,” and SHRM reports that the average cost per hire of a new employee is $4,425.
- Technology consultant Orion notes that the cost of keeping an outdated Windows Server 2003 running annually is $200,000.
Is the Cost of Running Old Software Worth It?
A simple consideration of the numbers in the previous section will lead you to an unavoidable conclusion: Continuing to use old technology simply isn’t worth it. This goes double for utilities, an industry where complexity meets governmental regulation and a need for efficiency. If your utility still relies on old legacy software suites, consider upgrading to a Milsoft solution. We provide top of the line software for engineering and operations, enterprise accounting and utility billing, and interactive voice response communications. Reach out today to learn more.