How much is your legacy tech really costing you?

The demands on your digital estate can come at you fast and furious.

You want to keep pace with customer needs, but it seems almost impossible to meet when entrenched and splintered technology looms large over your organisation.

If this sounds familiar, you’ve likely faced the monster known as “legacy tech.” It’s big and brutal – but it is beatable.

The good news is – you’re not alone. Sooner or later, most organisations come to wrestle with the tangled web that is legacy tech.

But...how have I ended up here? 

It happens organically enough: a series of products and services make their way into an organisation, often to meet the immediate needs of urgent activities, siloed stakeholder groups or customer demands. Multiple decisions across the organisation lead to a proliferation of technology acquisitions, subscriptions, and customised builds. Sometimes through shadow technology or senior stakeholder intervention and often implemented without a clear technology vision, strategy or process. 

Then one day, the organisation reaches a critical inflection point. A raft of customised features makes specific tech difficult for one department to lose and difficult for others to adopt; big license fees and even bigger development costs roll on and on; and pathways for future upgrades become challenging , while shiny new projects with big budgets and unknown returns continue to make an appearance.

This dilemma is all too familiar. You want to create a seamless digital customer experience, but your organisation’s system, architecture, design, and technology stacks aren’t up to scratch. And the level of investment needed to resolve the biggest issues just isn’t there, or so it seems.

So, how do we make the business case for investing in a simplified technology system?

Step 1: Build your business case

Getting to grips with how your organisation plans their finances, makes financial decisions (and when), knowing who the key stakeholders are and how they sign-off budgets will be paramount to a successful business case submission.

Typically, finances are divided between CapEx—longer-term investments—and OpEx—ongoing, recurring costs associated with day-to-day business operations. Technology infrastructure and product teams normally fall under OpEx. The challenge you may face is that addressing technical debt often requires investment beyond an organisation’s typical operations budget. Aligning technical debt investment to CapEx is usually the best approach if increasing OpEx is not an option.

Additionally, you will want to align your technical legacy debt business case with customer and organisational needs, as well as the longer-term vision and strategy. Piggybacking on a new initiative with a senior sponsor can sometimes provide the best opportunities for investment. However, to make your business case robust, it must demonstrate the ability to address organisational pain points.

Step 2: Identify the pain points of legacy tech

If you’ve found yourself at this juncture, chances are the pain points have now become detrimental to business intelligence, operational efficiencies and business progress and momentum.

And while it may seem like an insurmountable challenge, figuring out where legacy systems are creating the biggest obstacles is the crucial next step. Making the business case to upgrade your legacy technology is often a matter of prioritising value, agility and innovation – or a combination of the three.

Value

This is one of the most common themes we observe, and wasted costs can be traced to several sources. Legacy systems are often bloated by nature due to disparate procurement, ineffective technology direction-setting, and ‘new’ sponsored initiatives taking precedence over longer-term business needs.

However, finding a pathway to remove tech legacy debt can unlock a wealth of value for the organisation, through operational cost savings, revenue growth, risk avoidance and productivity improvements.

Agility

The time required to navigate and untangle legacy systems often forces businesses to compromise on pace and scale. This creates a knock-on effect, with cross-functional teams spending time problem-solving and compensating for incompatible technology. Aligning a business case to improve agility to drive operational effectiveness, meet customer demands, and enable business change can deliver reliable returns on investment and enhance business-as-usual processes.

Innovation

Lastly, legacy debt has an impact on innovation and delivering progressive change for the business. With resources stretched thin, you may find that you’re left with little opportunity to respond to what your customers want or expect.

However, aligning your business case with innovation can unlock new business intelligence, processes, and practices that drive forward leaps in understanding, business transformation, and value creation. Placing innovation at the heart of the business case can provide competitive advantages, operational efficiencies, and growth.

Step 3: Breaking the back of tech legacy debt

We help organisations with this all the time.

While there is no one-click solution to defeating legacy systems, there are methodical and measured approaches we can take. Experience has shown us that keeping objectives simple, and focused on the areas that matter most, go a long way in solving typical challenges like these.

The first step is often the hardest: seeking investment to untangle the web of legacy tech. However, aligning your business case with your business and customer needs, your organisation’s long-term vision and goals, piggybacking on new initiatives, and demonstrating impact can help you unlock long-term value.If you’ve found yourself in an uphill battle with complicated tech systems or believe your organisation is road-blocked by old tech, Great State works with you to explore the best solutions for your technology challenges, legacy systems, and beyond.

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harry.birch@greatstate.co