Every company has legacy systems – the technology, software and processes that are inherited from earlier stages of the business.
At their best, they can be foundational pieces of technology that just need a bit of extra tweaking or maintenance. At their worst – and usually at their oldest – they slow things down, are difficult to integrate with other systems and no longer really fit the needs of the business.
Especially in the latter case, legacy systems come with a certain amount of ‘technical debt’, a term for the level of future rework required as a result of a system’s inability to carry out certain tasks.
The idea of digital transformation is a wonderful one – the freedom of cloud-based tech, the integration with mobile devices, the superpowers offered by data analytics – but transformation comes with its own costs and requires careful prioritisation. For instance, one legacy system might need to wait if another more critical legacy system is already being replaced. So the timing of the retirement of a legacy system is a big consideration.
When that discussion begins, here’s what should be on the agenda.
1) How often do you experience failures?
The definition of ‘failure’ should be as broad as you can make it.
This might range from actual crashes, during which systems go down and certain work can’t be carried out, to slow speeds that mean staff are constantly waiting and therefore being less productive, to processes people in the business want to carry out but can’t, as the system is not capable.
List the failures and the resulting costs. The definition of ‘costs’ should also be broad. There’s the cost of the IT department or consultant having to do the repair. There’s the cost of staff suffering downtime and not working at full capacity. And, most important of all, there’s the lost opportunity cost – the financial blow to the business from not being able to work a certain way, identify specific trends, or release a product to market in time, etc.
These costs should be considered in relation to the organisation’s financial and strategic goals. At what stage are they actually making those goals more difficult, or impossible, to achieve?
2) Are your systems exposing you to risk?
Older IT assets, for many reasons, represent greater cyber-security vulnerability. They might no longer be supported by the vendor. Updates may not be applied as often, or at all. The hardware and software itself might simply not be up to the task of protecting against today’s threats.
This opens up an organisation and its brands to enormous and varied risk. The Australian Cyber Security Centre lists numerous types of cyber threats, including cryptomining, data spill, denial of service, hacking, identity theft, malicious insiders and more.
If any of these occur, costs can be crippling, including from lost business, fines and damaged reputation.
Finally, legacy systems can also present non-compliance risk. Systems that are not regularly updated in real-time as regulations change can cause major compliance headaches as time goes by.
3) Complexity: is it increasingly difficult to upgrade?
One of the issues that points most clearly to technological retirement rather than renovation is the fact that it’s difficult, and sometimes impossible, to add new functions when and where they’re needed.
Often this is caused by an unwieldy tech stack, one held together by an increasingly fragile set of APIs.
A tell-tale sign is staff members being told, increasingly regularly, ‘We simply can’t do that’.
4) Is employee and customer experience improving?
How mobile-capable are your business systems? Do your people have access to an app from where they can manage various tasks, from changing their personal details in the company’s HR system to carrying out their core work from anywhere and at any time?
Just as important, can customers access mobile tools at a time and place that is suitable for them, to do business with your company?
The COVID-19 pandemic has increased expectations around a business’s online and mobile capabilities. To attract the best talent, and to engage the most valuable customers, organisations have to meet them where they’re most comfortable. If your systems don’t allow for a mobility strategy, it is missing out on both.
5) Can you identify future trends in real time, with data?
Data allows businesses to see in the dark, to identify opportunities they had previously not even imagined. But this is only possible if the analytics are updated in real-time and are future-focussed.
If staff members come to meetings with Excel spreadsheets, these are not real-time. Spreadsheets, by their very nature, only report history. If teams attend meetings with live data feeds, graphically represented on the screens of their laptops or tablets, and are able to input various factors to see future outcomes, you now have a real competitive advantage.
Time for transformation? Here are the next steps
As competitor businesses accelerate their plans and delight their customers through the use of modern tech, are your own systems letting your people, and your customers, down?
If signs point to retirement rather than repair of legacy systems, the next step is simple – seek advice from experts who’ve made transformation a reality across industries and organisations, large and small.
Simplus Advisory Services helps organisations to explore options and identify where technology could give them a powerful edge. We think of ourselves as tour guides, helping you determine a transformation vision and road map.