What are the major challenges of legacy transformation? Part 1

Moving from legacy applications and hardware systems to newer models is a complex, high-risk exercise, but one required if IT leaders are to progress, innovate and deliver the cost savings and improved user experiences expected of them.

Having spent decades building up their IT infrastructures, companies face the difficult decision of which systems to keep and which to cut. Since no umbrella formula exists, each organisation has to consider its unique system architectures and business needs.

Buy or Build?

Deciding whether to build or buy will necessarily prompt some invaluable, long-term strategic discussions. After all, a new system involves not only a financial cost, but also an investment in people, vision and focus into the area for years to come. Questions to consider may include defining what is core to the business (and in turn what isn’t). Choosing to buy a new system means really examining if the investment is so important to the businesses and its mission.

Perspectives on the best way forwards vary. For some, decision making around legacy transformation is a no brainer; building internally hampers innovation and simply the number of features you can install. In short, building makes you less agile.

Chris Skinner, author of Digital Human – an insight into the fast-evolving banking sector – elaborates this point under the provocative heading ‘Build or Buy. Or Build and Die’. Skinner says that when banks insist on building the technology that underpins their value chains themselves, they risk shifting focus and resources away from all important client servicing.

A wiser option is to curate the best third-party tech solutions, supporting and enabling them to focus on what they do best, that is, financial services and customer relationships.

A choice then arises about who to partner with, with many organisations opting for a ‘best of breed’ approach rather than being totally dependent on one solution from one provider. An Agile approach to implementing new technology delivers faster results, so the business fails quickly, learns fast and improves. In contrast, Waterfall can often mean sitting tight waiting for an outcome which may not be what you wanted in the first place; meanwhile, the competition has moved ahead.

‘If it Ain’t Broke, Don’t Fix it’ Mentality

Fear of disruption to services is a serious consideration for many large organisations. Particularly where a legacy structure is still functioning on an operational basis, albeit clunkily, concerns abound regarding the impact on customer experience – even short term.

Resistance to change is also cultural and deeply entrenched, especially in organisations where IT has been viewed as a cost centre. But with ‘adapt or die’ now a mantra, and facing pressures from competitors unencumbered by legacy IT, the C suite has no choice but to move on.

Cost and time of implementing change

Legacy systems are the uncomfortable stone in the shoe for businesses trying to keep pace with digital transformation. A survey of global asset management firms showed that whilst 80% of the 200 firms surveyed are prioritising digital transformation, two thirds are slowed down by legacy systems and culture clashes.

Embarking on a transformation programme from old to new worlds can span a period of as much as five years. Imagine then reaching your destination, only to find that it isn’t what you expected. Or that your newly built system is in danger of becoming obsolete before it’s even delivered.

A viable alternative to adapting or building, for many organisations, is a customisable, off the shelf solution. Turnkey solutions that can be continuously upgraded to the latest, greatest solution, with minimal overheads, offer organisations a powerful, competitive choice while enabling their core competency: continually serving customers needs.


Interested in reading more about Legacy systems and how they impact digital transformation, read Triad’s eBook including views from 38 IT leaders here