When you encounter a company with a legacy tech stack during M&A tech due diligence, you’re not just looking at old systems.
You’re really looking at the intersection of technology, people, and culture. The advice you give has to take all three into account, because the “right” answer isn’t always a shiny new platform.
Let’s break it down into three common scenarios:
1. The Obvious Case for Modernisation
You see an old, on-premise system that’s rigid, hard to integrate, and can’t support the scale of the opportunity. The market is big, the growth potential is there, and the legacy stack simply can’t keep up.
Advice here is clear: recommend a replatform. The ROI is straightforward — growth demands a tech foundation that can scale, attract talent, and integrate with modern tooling.
2. The Niche, Complex Tool
Sometimes, you’ll find a small company with a niche product, deeply engineered over many years by a tight team. The system looks old, the tech debt is real, but it’s also complex and hard to replicate. The market is smaller, and the team is heavily invested in their way of working.
Here, a big-bang replacement could destroy value. Instead, the right play might be:
- Selective modernisation of the most fragile or business-critical parts.
- Upskilling or augmenting the existing team gradually.
- Roadmapping upgrades over time so the business keeps running while evolving.
It’s about balancing cost, risk, and culture while preserving what makes the product unique.
3. The “Perpetual Upgrade” Culture
Another red flag is when you see a company that’s been “in the middle of upgrading” for years. Delays stretch, budgets balloon, and excuses pile up. This isn’t just a tech issue — it’s a cultural one.
In this case, the advice is less about code and more about people. Why is the team resisting change? Is leadership aligned? Do they lack the capability or the will?
Here, your recommendation has to address culture head-on. Without confronting those dynamics, any technical roadmap will fail. Sometimes it means reshaping leadership priorities; other times it means phasing upgrades in smaller, achievable steps to build trust and momentum.
The Legacy Tech Lens: A Simple Framework
When assessing legacy systems, view them through three lenses:
- Tech Lens – What’s the state of the stack? Is it maintainable, scalable, secure, and compliant?
- People Lens – Who built and maintains it? Is there enough in-house expertise? Can new talent be recruited?
- Culture Lens – How does the organisation approach change? Are upgrades embraced, avoided, or endlessly delayed?
The overlap of these three lenses shows the true risk and opportunity. A weak tech base but strong culture can be fixed. A brittle culture with outdated tech is much harder.
A Practical Checklist for Advising on Legacy System
I use the following check-list when I hit a tricky system to advise on.
- Business Criticality: Which parts of the stack are essential to day-to-day operations versus peripheral?
- Rationale: Is there a specific need or limitation that forces use of the older technology?
- Talent: Does the business have (or can it hire) the right people to maintain or modernise it?
- Customisation: How heavily customised/tailored to the business is the platform?
- Complexity: How complex is the system / how long did it take to build?
- Alternatives: Is there an off-the-shelf solution already available?
- Stability: Is the current system still reliable and secure?
- Scalability: Can it handle projected growth?
- Integration: How easily does it connect with modern platforms?
- Talent: Does the business have (or can it hire) the right people to maintain or modernise it?
- Cultural Readiness: Is leadership aligned and capable of driving change, or will resistance stall progress?
- Strategic Fit: Is modernisation a growth enabler, a defensive move, or a distraction from the real value driver?
- Cost-to-Change: What’s the estimated cost (time, money, people) of upgrading or replatforming?
The Bottom Line
Legacy systems aren’t just “bad tech.” They’re signals of how a company operates. In due diligence, the real value comes from showing investors and portfolio firms how to:
- Separate what truly needs replacing from what can be stabilised.
- Identify where cultural resistance will block progress.
- Build a realistic roadmap that balances cost, risk, and growth potential.
The best advice acknowledges that upgrading isn’t always about technology first. It’s about aligning the tech with the people, culture, and business goals.
