IT Leadership

Break the Chains of Legacy Systems: How to Use Technology to Enable Business Growth

Technology can transform an organization, that is, if its staff isn’t handcuffed by it. Breaking the chains of a patchwork of disparate legacy systems leads to greater innovation, responsiveness, and better customer service. Sound good? Here’s how to get there.

First, Recognize Why IT Can Be an Anchor, Rather than a Sail

Managing a portfolio of legacy systems can monopolize the IT budget, leaving little room, if any, to invest in new technologies or initiatives. In a fast-paced and competitive marketplace, this can be a recipe for failure. When companies cannot innovate, they cannot grow. Yet, they cannot innovate when they spend most of their resources managing legacy systems. In this cycle, there is neither time nor budget to do much beyond maintaining the status quo.

Legacy systems stifle other aspects of the business aside from the IT department. By consuming internal resources, outdated systems can negatively impact other areas of the business, such as:

  • Customer Service: legacy systems may not support smooth execution of complex business processes, which hinders the organization’s ability to effectively respond to customer needs. Have you tried signing up for new mobile phone service lately? Did it seem like the process was a lot more complicated, and took a lot longer than you thought it should? When you got your first bill, was it what you expected, with the services and charges that you asked for? Did you have to spend hours, or perhaps days, on the phone with their customer service trying to straighten it out?
  • Operations: outdated systems may require manual processes to manage functional gaps or hand-offs between systems, causing significant delays and inefficiencies.
  • Time to Market: By adding levels of complexity to all processes, legacy systems can dramatically increase time to market.

Second, Envision the Possibilities a New System Could Unveil

It is understandable for the IT department to quite honestly state they have no capacity to focus on new initiatives when they barely have time to keep their current systems running. In this situation, company leadership must refocus priorities from what is, to what can be. They must demonstrate the business need for strategically oriented technology solutions and empower IT to refocus resources toward fulfilling those needs:

  • With new systems and processes in place that can provide real-time visibility into critical information about customers, sales, operations and finance, as well as supply chain data, and the like, the workforce becomes more efficient and empowered to make decisions on their feet.
  • What would it mean for an organization if all end users could run their own reports from an easy to use dashboard, without soliciting the help of a developer? How much more accurate would those reports be if those end users didn’t need to create their own reports in Microsoft Excel?
  • What could it mean for your customer experience if you were able to develop a mobile application that sent your best customers personalized offers precisely when they were ready to buy?  
  • What if leadership had real-time access to data they need regarding sales, P&L, workforce management, and more, right from their desktop and mobile device, rather than waiting for daily or weekly reports from another department?
  • How could your business transform if, with a single click of a mouse, you could determine how profitable your best-selling products truly are?

None of these things are possible when IT staff struggles to maintain utilities rather than innovating value-added services. To make those visions into reality, the organization’s leaders need to do some important legwork.

Third, Break the Cycle with Business Value Analysis

Through business value analysis, organizations can develop a deep understanding of what their technology is or isn’t doing to drive business success. Once that value analysis is complete, IT leaders and executives can create a roadmap that will align technology with the goals of the organization, which will allow them to use technology strategically to enable business growth. Business value analysis starts with a clear understanding of the business’ direction, goals and objectives. Once those are clearly defined, the value analysis can be completed via the following process:

  1. Formulate IT Strategy: Once executives share the business strategy with technology leaders, they must craft an IT strategy that supports and enables that business strategy. This will lay the foundation for shifting the focus of their department away from operations and onto strategic initiatives.
  2. Catalog Existing IT Services: a complete catalog of the company’s existing IT services and legacy systems must be developed, and then utilized to determine if and how each service aligns with the IT strategy and overarching business strategy. Designate those systems that do not directly support or enable the strategy (ie, help the business differentiate itself, promote agility, efficiency, or profitability) as “standard services”. Then categorize those that do support or enable the strategy as “value added”.
  3. Identify New Value-Added Services: This step may require a deeper dive into the unfulfilled requirements and/or new processes required to achieve the strategic goals of the business, and add these potential new services to the catalog.
  4. Develop a Roadmap: develop a plan for transforming the IT services portfolio to align with the business and IT strategies. The roadmap will identify initiatives that must be executed to move to accomplish the transformation by
    • Minimizing the distractions of providing standard services. These systems are all necessary, but they add little value toward achieving the strategic goals of the organization. Those standard services can be migrated to Cloud-based services, handled with off-the shelf solutions, or outsourced to one or more service providers. Other cases might require a hybrid approach, outsourcing some functions and keeping others in-house. No matter the final solution, the resulting plan should free up critical IT resources to refocus on value-added services that advance the business.
    • Identify and implementing new technology services, or enhance existing ones, to support the business in achieving its strategic goals.

Once a value analysis has been completed and a roadmap has been put in place to manage standard services and replace legacy systems, the organization can focus time and attention on innovating new products and services that will truly enable strategic growth.