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Recently, I saw someone pull out a flip phone and thought: why? It’s almost more difficult to find and maintain a flip phone nowadays than to find an economical smart phone. And the smart phone runs faster and does more things! The same could be said for the millions of legacy systems still taking up valuable space in the digital landscape. While some companies think it’s more expensive to upgrade or scoot their data to a new platform, the truth is their legacy systems are causing them to miss out—both on better performance, and improved customer experiences.
Let me roll back a bit. First up: what’s a legacy system? Yes, it’s the flip phone of the business world. But more specifically, it’s an outdated technology that is still critical to a company’s operations—i.e. one that can’t be easily eliminated. That could be an incompatible database, an outdated data center, or a clunky sales program. If you’re still operating on legacy programs, you’re not alone. Some estimate 70% of a typical global corporation’s transactions are completed on these outdated applications. Again why?
For one, many legacy-era organizations are simply not agile enough to upgrade easily. Too many employees are attached to the old silos, and the old ways of doing things. Moving to a new platform would be time-consuming—and would likely encounter a lot of resistance amongst employees. Thus, many companies avoid it altogether. Another reason: Many companies assume it’s too expensive. As long as programs are still working—at least, generally—they’d rather ride it out until an upgrade becomes absolutely necessary. These are the procrastinators of the digital business world.
In my opinion, both are losing arguments. Research shows companies will throw 60-80 percent of their IT budgets down the digital drain just maintaining older and outdated infrastructure. That financial waste can be attributed to an increased risk of security breaches, overall inefficiency, and unsatisfied customers. Indeed, today’s customers aren’t satisfied with services that merely work. They want you to wow them—to exceed their expectations—and to do it now, because they are ready.
So how can you make 2018 the year you put your legacy systems to rest? Try the following:
Break down the silos: Work with your money people—your CFO and others—to determine the true ROI of making the upgrade. True—there might be higher costs up front. But in the end, you will likely save money in reduced support and maintenance costs.
Do your research: Use your customer data to understand what customers want, and how the upgrade would enhance their customer journey. After all, the upgrade isn’t about you—it’s about serving them better! Would it allow you to field customer service calls faster? Improve your response times? Make a better, more satisfying product? If the answer is yes to any of these questions, an upgrade isn’t just critical—it could help increase your customer satisfaction scores and end profits, as well.
Get real. Take time to understand where your industry is going, and what your company needs to do to get there—or get ahead of there. Chances are good, many of your competitors have already bid adieu to their legacy programs and are on track to win some of your customers over because of it. Whether it’s a better system for managing data, a new cloud system to allow for mobile 24/7 access, or modern coding to allow you to create mobile first applications that can stand the test of time—you will only get further behind the curve by waiting. Now is the time to catch up before you get swallowed up by the digital machine.
Educate: Your employees may not want to make this change! They may have been using the old system for 20 years and feel completely disinterested in getting a new one. Commit to finding champions for the change, and communicate often about it—and why it’s important. This includes the age-old question: what’s in it for me? (Faster and simpler systems, automated process, more accurate reporting, easier work overall!)
Plan. Know the potential minefields, and have plans for addressing them before you even start—not just in IT, but in all levels of the organization.
Here’s the thing: you don’t have to do a total “rip and replace” to upgrade your systems. In fact, some that have done so (including Ford Motor Company) have seen disastrous results. All you need to do is figure out the best way to build on what you have to move yourself into 2020 (because yes, you should be looking at tomorrow’s needs, not just today’s.) That could mean re-engineering, replacing, or even migrating your current assets. Rest assured, when you do so, you will improve performance, CX, usability, and security for your company. I fact, I’ve never met anyone who regretted getting with the times when it comes to legacy updates. The trick—as with anything in digital transformation—is to be smart about it. Keep it simple. Educate often. And of course, maintain it well—not just now, but in the future. Your new system could turn into an old system pretty quickly if you aren’t careful.
Daniel Newman is the Chief Analyst of Futurum Research and the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio