New organisations entering the marketplace have radically shifted the status quo. In offering novel and different approaches to customer interactions, or by providing services in innovative and more efficient ways, these emerging challengers are shaking up established businesses. Due to the changing business landscape, digital transformation has become the holy-grail of established businesses seeking a digital response to these new disruptors.
Research by Nimbus Ninety reveals that over half (52%) of organisations rated their progress towards a new digital world as either adequate or poor. In addition, a third of organisations admit that increased competition from digital-centric competitors is a challenge. With the rapid pace of change across almost all business sectors, there is a tipping point approaching for the organisations lagging behind. They need to ensure they have a digital strategy, or they may begin to lose ground to new challenger businesses, and the already established businesses that have already embarked on their digital journey.
Enterprise views legacy technology as their biggest roadblock
Half of all survey respondents cited ‘legacy systems’ as the primary roadblock to their digital aspirations. While what constitutes ‘legacy’ technology varies greatly between (and even within) organisations, this finding confirms that this is a consistent issue across a broad range of organisations from small to large.
Many IT departments face challenges stemming from keeping pace with business growth, which often results in building an interconnected dependency of operational, organisational and technological legacies. Many elements within an organisation are heavily dependent on these legacies for their day-to-day operations. As such, these legacy systems are seen to be blocking the road to digital transformation, slowing down the journey considerably.
Legacy is not a barrier born in ‘yesterday’s world’. It is often the reason an organisation is where it is now and still holds considerable value for the organisation that cannot be simply discounted. Organisations adapting to the digital shift are building new solutions in parallel with their legacy systems, and through this connection mining a treasure trove of historic data for valuable information. For example, organisations are introducing new middleware layers to broker connections into older databases or using APIs to connect fresh new mobile applications to legacy data sources. This can deliver tangible transformation while continuing to extract value from legacy components.
Stewart Alsop, the noted technology commentator, famously predicted the end of the mainframe in 1991, saying: “The last mainframe will be unplugged on March 15, 1996”. Yet today, mainframes still underpin many organisations. Indeed, mainframes are still being purchased. It is unlikely that these ‘legacy’ systems will become obsolete in the near future, so they still need to be factored into the digital transformation journey.
When trying to build a new digital journey on the foundations of legacy technology, we must also examine the other major barriers to transformation uncovered in the report: organisational structure (38%) and lack of collaboration (33%). Both are symptomatic of organisations that have not created a culture of change. Where cultural agility is not in the DNA of an organisation, legacy will be held up as ‘the right way’ of working and, therefore, become a barrier to change. Legacy processes are the accumulated blueprint for operating and de-risking an established company that start-ups have yet to learn, and should be at the centre of a successful transformation.
Cultural change is needed to succeed
Ensuring that the legacy systems and their operators are part of the cultural change required for a successful digital transformation is of paramount importance. Gartner espouses the Bi-Modal approach to IT, where legacy systems are essentially run quietly in the background, while the rest of the business transforms. However, this misses the point that engaging the legacy systems and people within the cultural change is imperative for successful transformation.
Engage with legacy
Making the operators of the legacy environment an integral part of the transformation journey ensures that these systems also become part of the transformation, rather than irrelevant satellite systems that are blockers to progress. Many organisations have structures that reflect a more traditional approach to operations, with siloes of skills, knowledge and legacy. One of the early changes needed in digital transformation is to engage the system operators and take onboard their views on the value of the information and processes within the legacy systems. This engagement often uncovers information that can not only inform a transformative approach, but enhance and accelerate progress by avoiding the re-invention of the proverbial wheels.
There are many organisations that have successfully harnessed the power of legacy systems and delivered the content or processing power of these through fresh, modern interfaces or mobile apps to their customers. Adopting this approach enables organisations to transform their customer experience while using legacy systems to process the inputs. The outcome is a more rapid delivery of improved customer experience with a review of the legacy processes taking place behind the scenes.
Transformation must be all-inclusive
Organisations that cite legacy systems as a blocker to digital transformation are usually looking at transformation as a definitive jump, where everything must be in place for one big switch-over. In reality a successful transformation is journey comprised of as a series of smaller wins, beginning with cultural change across all aspects of an organisation. This approach allows time and space in which to exploit value from legacy systems and business processes, and factor them into the journey.
Transformation of any sort needs to be inclusive to succeed. It needs to include IT, business, HR, marketing and the legacy systems upon which the organisation was built. Those driving transformation must strive to transform and learn from what is available, instead of simply trying to replace and mimic the disruptors. Wholesale replacement is not a strategy for change. Leadership must recognise the value accumulated within their own organisations and make it work in the digital age.
Too often ‘transformation’ is viewed as replacing the old with something new and shiny, but to ignore the heritage of an organisation - and to disregard the legacy that has often enabled its operations for many years - is to ignore the value of the business. Embracing the value that legacy delivers, and connecting it with new transformational approaches, allows established organisations to use their heritage to resist the challenge of the disruptors.
Simon Ratcliffe, Principal Consultant, Ensono
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