Why Legacy Systems Are Killing Customer Loyalty

20 June 2018
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Reading time: 4 minutes

Application Modernisation – companies cannot ignore Legacy anymore

Firms are under increasing pressure over the failure of IT systems.

Last year, British Airways’ passengers around the globe faced cancellations and delays as the airline struggled to regain control after an IT systems failure caused chaos during one of the busiest times of the year.

Two years earlier, the Royal Bank of Scotland came under regulatory scrutiny for a similar technology failure that caused thousands of customer payments to simply ‘disappear’. The bank’s obsolete IT systems were blamed for this trust-crippling debacle.

The most worrying aspect of these horror stories is that they are not isolated. It seems enterprises have not learnt their lessons. So, let’s look at some of the main reasons why systems fail.

Short term fixes; not long-term solutions

After decades of M&A growth, many global giants – especially in the banking and insurance sectors – now find themselves seriously challenged. Their IT architectures have become steadily bigger, less efficient and significantly harder to maintain. At the same time, they are having to manage multiple, disparate systems: customer-relationship… procurement… supply chain… finance and accounting. It’s a disconnected and rather dysfunctional recipe for chaos – especially since integration and optimisation appear not to be high on management’s agenda. This resulted in lack of interoperability between systems.

Fearing risk and complexity, some CIOs have become increasingly change-averse. Their priority is often to do more for less investment in legacy systems. As a consequence, they devise patches and workarounds whenever they encounter system limitations.

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However, these are short-term fixes; not long-term solutions. Ultimately, they create inconsistencies not only within layers of technology but also in the applications within these layers. Inevitably, there can only be one consequence… operating costs start to spiral out of control as maintenance and support chew budgets.

Unfortunately, this preoccupation with ‘patch & mend’ expediency also means that business opportunities are missed. Companies look only for economies and fail to see the bigger picture – the innovation advantages of digitisation.

Modernisation is the Recipe for Business Growth not Cost Cutting

Let me give you another scenario: In any given organisation, specially during tough economic climate, CFO wastes no time to cut IT budget by say 12% and CIO then advises service level cuts to support the budget cuts. Hence, the IT team stops supporting email on weekends, the finance system that is on 30 minutes standby for disaster recovery is on 2 days standby and some of the cut is funded by not doing the upgrade on the database system. This means that the IT operations are funding the budget cut by debt from the future. Then the CFO and the business are not able to understand why IT is unable to maintain the high service levels. This is a class case in organisations that demonstrate the inability of leadership and business to understand consequences or inability of technology leadership to explain technology issues in the language of business.

Obviously, pressure from business functions and the need for speed leads to short cuts on CX design that cuts corners and create liabilities also does not help the business to grow. Further, any change or enhancement on the application without fixing earlier issues adds to inefficiencies, complexities and costs. Additionally, no one wants to work on an unresponsive system which impacts the ability to attract and retain talent. Nowadays, it is difficult to hire COBOL programmers in the UK.

  • With the advent of digital, companies cannot ignore legacy applications anymore. The only way an organisation can deal with bugs, lack of interoperability, managing inconsistencies, customer care, manual processes, awkwardness, etc is planning through decommissioning and modernisation of business applications. Application Modernisation can help businesses to collaborate with IT not only through rationalising and modularising legacy systems but also to integrate them with new digital layers which supplement business functionality and support growth. Businesses are then able to move to market faster.

In the next part of my blog, I will discuss possible solutions that can help in modernising business applications and help you to differentiate your business applications in your industry.

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