The Information Technology (IT) environment in large organisations often mixes legacy and modern apps that do not always communicate well together, creating errors, slow progress, customer dissatisfaction and employee frustration. IT leaders need to invest with care, and choose solutions with the least disruptive impact - or even better, invest in solutions that facilitate coexistence.
IT Modernization, what’s really behind this term?
There are more than a few definitions, but I think this sums it up well: the update of all or part of outdated IT software to better support the business. We’ve been talking about IT modernization for years as software ages fast (some faster than others). But it remains a struggle for companies of all sizes and all industries (e.g. government, banking, retail) to actually tackle it. Why is that? I’ll take a closer look in this series of articles and, I hope to bring you some useful insights.
What do we mean by “legacy”?
The term “legacy” refers to technology that business has become dependent on over the years (maybe you’ve even built your company on it!) This can include systems still running on mainframes, or still using programs in languages like COBOL. If this is the case for you, congratulations, your company is a success story as it has been around long enough to have legacy issues! ;-)
Unfortunately that also means you have technologies that may be obsolete or outdated even if they are still necessary and not replaceable: proprietary software; software developed specially for your industry or company; home-grown solutions. What if the software you’ve been relying on is no longer supported? What if the technology knowledge and expertise is being lost as employees come and go?
You want to modernize, but you can’t just abandon them all at once.
Who benefits from IT modernization?
Why do you need to modernize your systems and for whom? Often a critical answer to “why” is to improve end-user experience.
...and at the same time reduce employee frustration. That’s an important win-win.
But let’s dig a little bit more in the “why”.
Legacy modernization is about upgrading technology in order to provide your teams with the right tools to help them grow the business. On the short run, it can mean bringing on new software to save time processing your data (e.g. by autocompletion or data retrieval), to automate tasks (e.g. sending emails or onboarding a new customer for a bank), to get rid of paper once for all and access information quickly (and not losing it anymore).
But not only. Over the years, digital transformation became a bigger deal for companies that started dedicating business units to reach long-term goals like outpacing the competition in order to be prosperous and secure the company’s future.
Reasons to take the road to digitize land are copious, but let’s try to list some of the more common:
- Improve collaboration and efficiency within your teams
- Reduce IT costs (even if it doesn’t look obvious at first)
- Improve agility to be able to react quickly to market shifts (predictable or not, as Covid-19 taught us)
Having a modern IT environment is no longer a wish but a real game changer / strategy in a society as digitized as ours. To stay ahead, companies need to get ready now, not be continuously in a reactive mode, and that starts with an operative and reliable IT infrastructure. In short, gear up now to be competitive tomorrow!
- Charles Souillard, COO & co-founder at Bonitasoft
- Boost innovation (launch new products faster and always be a step ahead)
- Avoid shadow IT creation (applications installed by employees without the IT approval to overcome the company system limits: evernote, dropbox etc.)
- Improve data quality, leading to more accurate analysis helping you to make informed decisions
- Increase data security
- (Feel free to suggest more in the comments!)
Companies that modernized legacy software successfully reduced the overall cost of business operations by more than 13%. It was also noticed that businesses with modernized legacy systems were able to increase their annual revenue by at least 14%.
- Michael Georgiou (article from Imaginovation)
(Not convinced yet? Hm tough crowd - alright. Have you ever tried to eat spaghetti with only a spoon? You will eventually find a way around it and finish your plate because you’re hungry, but it will take you longer than with a fork, more effort, probably more napkins, without mentioning the annoyance of it all, right? I rest my case.)
Is it time for you to modernize your applications?
If your teams are starting to complain, it’s definitely a sign! Early stage warnings often come from employees as they will be the first ones experiencing issues. They can come from the sales team not being able to generate an estimate automatically because the prospect information is not up to date in their database, or from the lab team not being able to get the test results of a patient quickly enough, or from the loan officer who couldn’t find an important paper to finalize the onboarding of a new customer - all can have results that create discontent for the customer.
Legacy systems in banks worldwide are still supporting such critical functions such as deposit accounting, policy administration, loan servicing, and payment processing.
- Miguel Valdes Faura, CEO of Bonitasoft (in his piece on Orchestration)
If you don’t pay attention, and wait to address those concerns, employees may stop mentioning it and simply get used to working slowly and less efficiently. It’s a typical human reaction to find ways to adapt to the situation, good or bad. Nevertheless for the best interest of the business, it’s time to break this habit and do something about it.
The solution is not always to upgrade or replace. It’s also worth considering adding to your IT environment. A good reason to introduce new technologies would be so they can communicate with your old ones.
What’s stopping you?
Time? Money? People? Lack of conviction that it’s the right thing to do? You’d rather wait and see, as for now it is still working? Those are legitimate concerns, but if you don’t modernize now, things will surely get worse, not better - it’s just a matter of time. Isn’t it better to be in control of the situation, to anticipate future issues instead of worrying about what could happen?
If money is the issue, consider replacing old systems slowly, starting where you can get fast ROI (e.g. your CRM for a faster sales cycle) to show results that will help you to continue your modernization step by step.
People can also slow down the decision process - it’s a well-known fact: people don’t like change.
It can be daunting learning how to use a new tool when you’ve been familiar with the old systems for years. It’s your job to get them onboard with the idea and show them the advantages.
What happens when older systems are no longer updated or supported by manufacturers, or when experts on a technology leave the company and take their knowledge with them? Legacy IT systems can also expose you to security breach and stolen data. Shall we get ahead of the problem before it goes nuclear? See where to start updating legacy systems in my next article.
Key takeaways from this article:
- Outdated systems pose a problem to many companies, no matter the size or industry
- Common reasons to modernize systems are: reduce IT costs, outpacing the competition, boost innovation, save time, automate tasks, get rid of paper, offer more security, access information quickly, connect old and new softwares...
- If you don’t modernize, it will get worse not better!