New organisations are entering the marketplace looking to change the status quo. By offering innovative and novel approaches to customer acquisition and retention, or by delivering goods and services in different and efficient ways, these disruptive challengers are shaking up established businesses. Consequently, digital transformation has become the holy-grail of mature businesses seeking a digital response to these disruptive forces.
Recent research by Nimbus Ninety shows that over half (52%) of organisations rated their progress towards a new digital world as either adequate or poor.
Additionally, a third of organisations admit that increased competition from digitally driven competitors is a challenge. With the pace of change across most business sectors there is a tipping point approaching for the laggard organisations.
They need to ensure they have a digital strategy or they risk losing ground to new market entrants and established businesses which are successfully navigating their digital journey.
Organisations view legacy as biggest roadblock
When questioned on the biggest barriers to executing a digital transformation strategy, half of the survey respondents cited ‘legacy systems’ as the primary blocker to their digital aspirations.
While the definition of ‘legacy’ will vary between (and within) organisations, this finding confirms my experience that this is a consistent issue across a wide range of sectors and size of organisation.
Many IT departments face the issue that their organisation has grown over time, building a complex dependency of operational, organisational and technological legacies.
Many elements of the organisation are highly dependent on these legacies for their day-to-day business. As such these legacy elements are regarded as intractable barriers blocking the road to digital transformation, deemed ‘to risky’, or assumed unable to be included in the journey.
Legacy is not a barrier born in ‘yesterday’s world’. It is the reason an organisation is where it is now and often holds a great deal of future value for the organisation.
Progressive organisations are building new and transformational solutions in parallel with their legacy systems, connecting them into the legacy world and mining this treasure trove of historic data for valuable information.
For example, organisations are using APIs to connect fresh new mobile applications to legacy data sources, or introducing new middleware layers to broker connections into older databases. This can deliver tangible transformation while retaining valuable 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”.
Today, mainframes underpin many organisations. It is unlikely that these ‘legacy’ systems will become obsolete in the near future and so they need to be factored into the digital transformation journey.
How do we capture the value of legacy and build a new digital journey on these foundations? To answer this we must also examine the other 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
Establishing a culture for change within the core of an organisation is necessary to drive digital transformation, and ensuring that the legacy systems and their operators are part of this cultural change 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
Engaging the operators of the legacy environment throughout the transformation journey ensures that these systems become part of the transformation, rather than irrelevant outlier systems that are blockers to progress.
Many organisations have a structure that reflects a more traditional approach to operations, with silos of skills, knowledge and legacy. One of the early changes needed in digital transformation is to engage the system operators and solicit 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 definitive jump, where everything must be in place to make the bold step forward.
But successful transformation borrows from change management theory, establishing the journey as a series of smaller wins that begin with cultural change across all aspects of an organisation. This approach allows time and space to exploit value from legacy systems and business processes, and factors 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, not simply try 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.
Sourced from Simon Ratcliffe, principal consultant, Ensono