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?
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.
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.
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].
The common theme in all my market conversations around digital disruption with enterprises, technology vendors, and system integrators is the word “legacy.” But, no one is clearly defining what a legacy technology is. Is it three years old, or three decades old? One that entails costly support, one with diminishing skills, one that is proprietary?
Technology can become legacy only when it has worked well, and still serves some purpose. Indeed, as true legacy technologies helped make businesses what they are today, they deserve some overdue respect. Of course, on the flip side, many technologies that should have been decommissioned lingered on not because they served well but because switching was costly and risky.
Legacy technologies continue to run the most mission critical workloads in enterprises. However, times are changing fast. Moore’s chasm is reversing, and enterprises are now chasing startups, or incubating internally, to lead technology-driven business transformation and disruption. With this, enterprises must address numerous critical questions. How should they go about selecting the legacy technology most suited for upgrade or replacement? How do they make a business case beyond cost savings? Do their CIOs and IT leaders have sufficient data points regarding this? What is the surety that they won’t regret their decision three or five years down the road?
One big challenge I see is that enterprises believe their legacy technologies are sacrosanct and should not be altered or experimented with. This has worked beautifully for technology vendors and systems integrators who have fed on these fears to sell their solutions. They promise to “integrate” legacy with newer technologies without disrupting ongoing operations. They are overzealous in committing that the investments in legacy will be protected.
While this sounds good in theory and has worked in the past, it has outlived its utility. For digital business to work, legacy technologies must be meaningfully altered and upgraded to incorporate the fundamental concepts of newer paradigms. These include an open architecture, service orientation, environment independence, dynamic resource allocation and consumption, and elasticity. Anyone promising to “protect” legacy without introducing the changes above is lying or creating a poor solution.
Though today’s technology is tomorrow’s legacy, the pace of legacy generation in the future will be exceptionally rapid. Enterprises will not be able to make their three-year, five-year, or ten-year plans, and will have to rely on extremely agile operations to ensure they can plug and play the most suitable technologies. Unfortunately, things are not getting any simpler. The myriad of technologies with their own protocols and lack of standards, multiple APIs with different performance characteristics, proprietary cloud technologies, and other similar disparities are again creating integration challenges.
What is the way forward? Enterprises cannot control the flow of technologies available in the industry. Their best bet is to invest in people who are going to use these technologies to create business outcomes. I believe the days of technology specialists are fast fading, and enterprises will require “multi specialists.” These are resources who understand technology beyond the monocular views of application developers or the operational view of the IT organization. They understand how and why different services should talk to each other, how to develop fluid, self-contained workloads, how to design systems that are open and allow technologies to be hot swapped, how to leverage external systems, and how to continuously monitor the impact of technology on the business.
However, new systems are becoming open yet more complex, vulnerable to attacks, costly to maintain, and difficult to architect. Enterprises are insufficiently investing in the people who drive the technology agenda. The silos of technology and business continue, while they ideally should have collapsed. And although the idea-to-cash cycle might have reduced, it has not been fundamentally altered.
Therefore, despite their best efforts and all the technologies available, enterprises may find themselves right back where they started – the dreaded legacy.
What do you think is the best way forward?