Today’s IT departments face a profound challenge: the delicate and precarious balance between stability and innovation. “Keeping the lights on” has never been more important. Business quite literally runs on technology and any downtime or blips in the user experience can cause major negative consequences, from brand equity and sales to internal productivity and morale. But innovation is equally imperative. The pace of technological change demands that businesses evolve or go extinct. You can’t afford to stand still – but you cannot compromise your core operations, either.
In response, most organizations split the difference. IT assumes that legacy systems are stable and continues to rely on them as foundational infrastructure. When new requirements arise, they invest in new technology with a greater emphasis on agility and responsiveness, often in the cloud.
This bi-modal approach is both common and understandable. It’s also deeply flawed.
Like most business decisions, IT’s strategies around where and how to invest typically stem from a risk-benefit analysis. Legacy apps are perceived as safe. They are known entities in which tremendous amounts of time and money have been invested, from acquisition, installation and customization to integrations and upgrades. Payback periods are usually long, so you’re still waiting on ROI. These systems aren’t perfect, but they are the devil you know and your organization is built around supporting them. Migration would certainly be a huge headache, and quite possibly not worth the risk.
But here’s the rub: do you have a full appreciation of the risks of sticking with the status quo? Have you actually quantified that risk? When business and IT leaders evaluate new technology decisions, they apply a rigorous analysis of due diligence and what-if scenarios. “Staying the course” with existing systems is always on the table in these discussions, even if only tacitly, yet rarely receives the same treatment. Why?
This is the status quo bias at work. It makes all of us prefer for things to stay the same. We follow customs and policies that have been in place for years simply because “we’ve always done it that way.” We stay in the same jobs. We buy the same brands. We know this is true intuitively, but it has also been scientifically proven. Change feels riskier than sticking with what we know. The problem is, that’s not always the reality – especially in the current climate of disruptive technology.
Real risk comes from unfounded assumptions
A Harvard Business Review article put it well: “failing to assess the risk of the status quo does not mean the risks won’t materialize – it just means you won’t be adequately prepared when they do.” Instead of accepting as truth that updating your legacy infrastructure is too expensive, too time-consuming, too technically risky, put it to the test.
Use the same framework that you would to assess net-new investments. Look externally versus internally. Evaluate your current system against your customers’ and users’ needs, your competitive environment, and societal, economic, political, regulatory and technological trends. Break down the types and levels of risk inherent in each path, including your existing strategy. Ask questions that challenge conventional wisdom in order to reveal potential liabilities, such as:
- Can my legacy systems realistically keep up with the current pace of technological change? Are they already obsolete, and if not, how long until they are?
- What features and capabilities do my current system lack, and how does that impact our overall user experience, competitiveness and value proposition?
- Will my systems continue to be supported by vendors, the talent pool, integrations with other technologies, etc. moving forward?
Don’t forget opportunity cost
While your legacy systems may work “just fine” for now, what could you do with more flexible, agile, scalable, user-friendly technology? What if your prospects could convert more easily, your customers receive better service, your employees do more with less, and your IT team dial services up and down as required? You may still “owe” on your old systems – that’s okay. Be willing to NOT recuperate the full cost if new investments could generate greater value for the business.
IT needs to maintain a reliable, high-performing infrastructure while innovating its systems and processes. These two goals are not mutually exclusive, nor should they be subject to different strategies or criteria. A bi-modal approach – let the legacy systems keep the lights on while new needs are met with next-gen tech – will eventually catch up to you. You don’t necessarily have to throw out everything that’s old, but don’t let it off the hook either. Acknowledge the status quo bias, then counteract it with a meticulous examination of each of your applications’ abilities to deliver the agility and flexibility required in the market today.
Yes, innovation can be risky. But right now, doing nothing is the biggest risk of all.