I have long been a proponent of valuing the legacy environment, and I am still a great believer in legacy technologies. But despite the huge investments enterprises have made in their legacy environment, even though they’re desperately trying to use bolt-ons and lift and shift to avoid going the last mile, and regardless of their belief that their core business functions shouldn’t be disrupted, time is running out for piecemeal digital transformation where old systems are dressed up to support new initiatives. It simply won’t work any more. Why?
Digital enterprises need different operating models
Enterprises are finally realizing that there’s dissonance between the execution rhythm of a digital business and its legacy technology. Although they can spend millions to make the legacy technology run the treadmill to keep up with digital transformation, the enabling processes and people skills will never catch up. For this, enterprises will have to invest in fundamentally different operating models in the way technology is created and consumed, the way in which people are hired and reskilled, and the way in which organizational culture is evolving towards speed and agility.
Legacy technology is breeding legacy people
Our research suggests that 80 percent of modernization initiatives are simply lift and shift to newer infrastructure. In those that impact applications, less than 30 percent of the code is upgraded. Therefore, most technology shops within enterprises take comfort in the fact that their business can never move out of specific legacy technologies. They believe the applications and processes are so intertwined and complex that the business will never have the courage, or the budget, to transform it. This makes them lethargic, resulting in a large mass of people without incentive to innovate. Such established blind rules need to be challenged. Enterprises need to set examples that everything is on the table and a candidate for transformation. The transformation may be phased, but it will be done for sure. This will keep people on their toes, and incentivize them to upskill themselves and drive better outcomes for the business.
Legacy technology is simply not up to the challenge
Enterprises are realizing that there is a limit to which they can patch their technologies to beautify them for the digital world. Our research suggests that every one to two years enterprises realize their mistakes as the refurbished legacy technology becomes legacy again. They are now believing they will either have to take the hard route of going the last mile in transforming, or shut out their legacy technology and start from a blank slate. This is a difficult conundrum, as 60 percent of enterprises lack a strong digital vision and, therefore, are confused about their legacy technology future.
Organizations that continue to believe they can put band-aids on their legacy technology and call it digital have lessons to learn from Digital Pinnacle Enterprises. Our research suggests that these businesses, which are deriving meaningful benefits of their digital initiatives, are 36 percent more mature in adopting digital technologies than their peers. These enterprises understand the limitation legacy technologies put on their business. Though they realize they cannot get rid of the legacy technology overnight, they also understand they have to move fast or get outdone in the market.
The courageous enterprises that understand that legacy technology is hard to change, is built on monolithic architectures, requires humongous investment to run, and doesn’t allow the business the flexibility to adapt to market demand, and are willing to “Dig-It-All” for digital, will succeed in the long run.
What has your experience been with legacy technologies in digital transformation initiatives? It would be great to hear your views, whether good, bad, or ugly. Please do share with me at [email protected].