Legacy systems: The cost to your business (and what you can do about it).

Ensuring your business can adapt and scale at pace has always been an asset, but never more so than now.

In the wake of mass remote working and a rapid increase in reliance on technology, businesses without modern IT infrastructures risk being left behind.

You would be hard pressed to find a business leader that isn’t familiar with the frustrations of legacy systems. Research from Hitachi Consulting found that nine out of ten IT decision-makers claim legacy systems are preventing them from harnessing the digital technologies they need to grow and become more efficient.

Despite this, many continue to grapple with outdated, disparate, and clunky technology, acting as a millstone around the neck of their organisation.

The frustrations of legacy systems

At best, legacy systems slow down growth and reduce the impact of any transformation project.

At worst, they prevent change altogether and stop your business from delivering. Legacy systems cost organisations time, money, and talent, and it is extremely difficult to make data-driven decisions as information is hard to access and can’t be extracted properly.

With the IT department firmly in the driving seat of a legacy system, it can be difficult for business leaders to set the pace of an organisation.

Legacy systems and software cause frustrations

It becomes impossible to build a culture of continuous improvement.

A recent report into government spending revealed that 50% of government IT spend is on keeping legacy systems alive, rather than improving solutions.

Organisations with modernised IT systems are substantially more productive than their peers with legacy IT systems, according to  McKinsey’s IT modernization in insurance: Three paths to transformation report. 

In the insurance industry alone, the total number of policies per full-time equivalent achieved is more than 40 percent higher.

The customer experience also suffers without a strong digital backbone. The inability to support mobile devices or new technologies inconveniences consumers and clients alike. In a time of constant innovation across the business landscape, a system that is slow or cannot support desired functionality is no longer an acceptable excuse.

Take stock of the current situation

If you think your organisation needs to overhaul its IT systems, taking action can be daunting.

Business leaders face substantial pressure to execute digital transformation projects quickly and efficiently. Working with external partners is crucial to a successful system overhaul, ensuring you have the confidence and expertise on hand while avoiding exacerbating existing issues. Collaborating externally also allows you to avoid the internal barriers that led to a legacy system in the first place.

Legacy systems: Pieces and Pain

To begin, a comprehensive discovery process will establish what your legacy system looks like, how the pieces work together, and what areas are causing the most pain.

Alvaro Reyes QWwpHwip31M Unsplash

Involving users, customers, and internal experts here – rather than relying on the IT department alone – helps to define the challenges more precisely.

When dealing with a challenge as substantial as a full system change, it is impossible to fix it all in one go. Creating a thorough roadmap and prioritising by business impact, effort required, and risk involved will help to create a solid strategy that can be executed incrementally.

Start small and gradually increase both effort and complexity. Most legacy systems have some small parts that can be easily carved out as a good starting ground, such as report production or payment processing.

Ensure appropriate governance

Legacy replacement projects impact the whole business and need to be managed closely to keep within the project scope.  

From the start, use strong, well-established project management practices and agree a set of metrics that will be reviewed monthly to validate that the project is on track. Be as hands on as possible: act swiftly if the project it isn’t meeting its KPIs.

And throughout the whole process, recognise that this is about business, not IT.

As you replace legacy systems, you will need to consider policies, procedures, training, customer impact, financial impact, and more. Ensure that all stakeholders are engaged and supported appropriately, and that communication about and across the project is transparent and clear.

In conclusion

Modern-day business platforms need to be nimble, user friendly, and accessible.

Anything less should not be tolerated.

If you’re experiencing legacy system pains, it’s time to talk to us.

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