It’s 10 AM in the small conference room in your office. Three folks from marketing are discussing their needs with two from your IT shop. Marketing: “We need to launch the new mobile app for customer orders. The competition is pulling them away from us like crazy.” IT staff: “We can’t get to that for another six months at least, we’re just swamped.”
Late that night the CIO is alone at his desk thinking: “What am I going to do? They are all going to be gone in the next few years. What will we do when it breaks down? There will be nobody that knows the system.”
Heard this around your company? The odds are pretty much a sure bet the bigger and more mature your firm is. Your shop is being ripped by the cross currents of Legacy IT.
On one hand, most of your IT folks spend 80% of their time and money doing LODO (Lights On and Doors Open) for systems built ten to twenty years ago. They would love to be innovative and creative but it is career limiting when one of these systems hiccups, so they get a lot of the attention.
On the other hand, ironically, those same folks are going to leave – they are approaching the end of their careers. Forget about replacing them – the newly minted IT pros coming out of school today have no inkling about the tech you have deployed and they do not want to. There is much sexier stuff now out there in which to build a career. Yours was designed and installed when they were toddlers or hitting adolescence.
Wait – it gets even better –not only are these legacy systems sucking all the ability to innovate out of the room, they are costing you a bundle! First, the old IT systems themselves are expensive to run. It’s old tech with inefficient machines and algorithms that need a lot of labor to run.
Wait, you say, you remember all those “discussions” over the amount of capital that had to be spent on new machines, or else. OK, maybe you at least refreshed the hardware every five to eight years so you did not miss out on all of the 10X+ savings. But let’s face it today’s machines and software runs circles around what could be done even just a few years ago.
How about the people? Did you refresh them? I’ll bet the newbie original developer who worked on designing and installing the system is the individual who is still currently maintaining it. And let me guess, he doesn’t get paid the equivalent of lower grade, new employee anymore. He gets paid appropriately for his length of service despite the content of his work. Simply put, you have an individual with 20+ years of experience maintaining something a newbie could do. Kind of expensive, isn’t it?
It’s not just you. Every time you make an airline reservation, execute a bank transaction, or file a tax return you are dealing with some moldy, oldie IT. It is just hidden behind some user-friendly interfaces. But, what do you do about it in your organization? Luckily, there is a way out of this double whammy. It is today’s cloud services – both infrastructure and software as a service.
How you do it will revolve around your current applications, your strategy and your people. Take a look at your systems and sort them into commodity stuff and those that truly differentiate your firm and provide a unique value. The commodity stuff is easy and a low-risk first step. It can go. Are you really still running your own email system? Get it from the cloud.
Let’s move from easy to a medium challenge. How about your finance and administration or HR systems, etc.? As you go through the list, it can get to be a little tricky if the system is intricately integrated with others or if they are fragile. However, I’ll bet your folks have been complaining about them for a while and asking for all sorts of features that would just make life so much easier. There are lots of options now, out there in the SaaS marketplace and plenty of help to get you across.
Now look at those systems and tools that really set you apart. Do you have a unique quote to order tool, or how about a super user-friendly system that customers consistently tell you puts you above your competitors? (Hint: test what you think creates unique value with your customers. Often, you may believe some system is special, but they do not see any difference.) Ok, you now have identified your high-value application portfolio. This is where you really need to make the classic business trade-off. Do you move it to a cloud platform? Does it need to be rewritten? How will you support it if you do nothing? What you chose will be unique to your situation.
The key is you must start this journey. Letting your legacy systems limit your agility and innovation in today’s world that is a risky strategy. Many companies, according to IDC, are not moving fast enough. It predicts that a third of the top 20 companies in every industry will be “disrupted” over the next three years, meaning their revenue, profits and market position will deteriorate.