DX for Legacy Enterprises: First Steps Toward Sustainable Growth

Image credit: iStockphoto/Ivanko_Brnjakovic

It’s widely understood that every enterprise needs to make the leap into the tech future through digital transformation. The only alternative is to fall behind competitors and lose business to more efficient, data-led companies exploiting the power of performance-based marketing.   

Technologies like cloud computing, AI personalization, and automation are the foundation of the world’s most successful companies. But these technologies are now essential to survival for any business because it will be impossible to compete sustainably without them.

A well-thought-out digital transformation strategy is a framework for decision-makers to think about the future of a business. Businesses should consider, what is at the core of the business right now, what the future looks like, and what roadblocks stand in the way of getting there. Then, how do we make change while managing risk?   

Almost every business facing the prospect of digital transformation has to deal with the implications of its legacy infrastructure; otherwise, it wouldn’t be a “transformation.” So, how does an established company with massive momentum and legacy infrastructure start doing things differently without breaking the business?    

Bring your enterprise with you

Digital transformation starts at the top, but it’s a cultural and technological change and needs to flow through the entire business. Leadership has to communicate clearly the goals of the digital transformation process to every part of the team.

The change efforts made in response to digital transformation are too often focused on digital, technology, and product teams when it’s the groups furthest from technology that can massively drive efficiency, automation, and cost reduction efforts off the back of transformation. Rarely, though, are they engaged upfront in transformation programs, and hence, they’re not brought on the journey and not culturally aligned to the value drivers of the program.

Take stock

We’ve all seen the statistics that claim most digital transformations fail, but these failures often come down to just two core factors: an inability to execute true, enterprise-wide change; and/or the failure to take the encumbrances of legacy seriously. 

Take a hard look at the way your company works now. Transforming a complex legacy computer system isn’t as simple as just transferring from one environment to another. There are also efficiencies to be gained if there are redundant or wasteful processes in the system.

Many transformation programs also assume that modern infrastructure and capabilities can neatly co-exist with legacy systems, meaning a green fields tech stack is often stood up alongside the existing one. The result is either a bloated IT operational cost base or, more critically, a suite of new technologies heavily burdened by their need to talk to legacy systems to drive value. Importantly, this “conversation” can only take place properly if a robust effort has been made to API-enable the legacy and abstract the new systems from the old constraints.    

Measure the challenge

Once you’ve audited the status quo and you have a clear idea of where you want your transformation journey to take you, it’s time to do a challenge analysis:

  • What are the areas of resistance that might hamper the process?   
  • What supplementary skillsets will it take to execute the transformation?   
  • What sort of timeframe is involved?   
  • How much impact will the digital transformation work have on the daily operations of the company?   
  • What will happen if things get bogged down or derailed?    
  • What are the potential risks involved in the transformation?   
  • What’s the risk mitigation plan?   

Find the right partner

The reality is that few enterprises undertake a digital transformation alone. The expertise and experience just aren’t there in most companies, and the shortage of skills required makes hiring difficult, so most businesses engage a specialist partner.

Digital transformation partnerships need to encompass technological, operational, commercial, and marketing-focused aspects. Working with a partner who understands the strategic importance of the process and just the tech nuts and bolts will give your company a competitive edge. Ideal digital transformation partners will begin by working with you to establish your strategic goals, so the entire process promotes business growth.   

Aim high

There’s an opportunity to catapult the business to a new productivity and creativity level in every digital transformation. Digital transformation bestows better data analysis that improves planning and removes the time it takes to measure the success of initiatives and pivot to better products. Investing in a new approach with an experienced team to guide you brings massive cost efficiencies, not just in terms of tech resources but also because it gives your team members access to better workflows and communication tools.   

In practice

Recently for a wealth management client, Versent focused on addressing the issues of legacy abstraction by starting with a detailed analysis of how we’d efficiently make the two worlds exist and what the resultant TCO would be. We didn’t just propose a new technology stack to deliver incremental value (and cost); we created a holistic plan that determined how we would leverage legacy data and systems, how we would stabilize them and ensure they remained performant, and how they’d actively support the new role of the technologies. It meant a delay in mobilizing the transformation program but reduced the risk of delivery and increased confidence that we had considered the whole program landscape. 

For a logistics business looking to implement a suite of new ERP and marketing technologies, we devised a raft of proofs-of-concept to validate the feasibility of the latest technologies to exist with the old. These POCs served to test a set of architectural hypotheses functionally and were run alongside a product design stream to define the target customer experience to confirm that the technology strategy could support it.

For digital transformation to be successful, legacy enterprises need to think top to bottom and side to side; consider the people furthest from the technology today as they’re often the ones who’ll be most impacted by it tomorrow. And, to think holistically about how new systems will co-exist with old ones: even if you abstract your new tech from legacy, it doesn’t mean the legacy goes away.

Stu French, director of digital and customer experience at Versent, wrote this article.

The views and opinions expressed in this article are those of the author and do not necessarily reflect those of CDOTrends. Image credit: iStockphoto/Ivanko_Brnjakovic