The reality: Sitting on legacy systems could be costing your enterprise in competitive advantage, and risking your security. Luckily there are simple SaaS solutions to get you back in the game.
There’s an old saying commonly linked to enterprise technology – ‘never touch a running system’. However, as competition gets tougher, markets evolve faster, and the potential for sector disruption grows, sitting on old software – even if it’s working – could be putting your organisation at a disadvantage.
“The world is changing,” says Michael Alf, Director, KPMG Enterprise. “Today, with the very volatile environment, companies need to behave more like an organism, and be more agile and flexible. And that shift obviously has an impact on IT, and completely changes the requirements you have.”
Alf says, rather than thinking, ‘If it’s not broken, don’t fix it,’ the question to ask is, ‘Am I getting the most out of our IT systems?’
“The answer to that might require you to change a running system.”
Many enterprises have long entrenched IT systems, which have been repeatedly ‘patched up’ to cater for advances and new demands. Brad Miller, Partner, KPMG Enterprise, says this can lead to a disjointed, and unsafe, system.
“One example is that it’s probably not secure,” he says. “Technology is blowing past what that running system is, and chances are there’s a piece of technology that can hack it. The lights might be on, and the emails might be being sent, but it’s not a relevant piece of technology anymore.”
Another issue of holding on to legacy systems is that customers are accustomed to using advanced technology in their personal lives, and are expecting it from every enterprise.
“Customers and employees are used to interacting with applications (Apps), so now they’re looking for the same kind of user experience. We’re finding that static systems just can’t cope, in the sense that people are looking for a different way to engage with the enterprise,” Miller says.
Alf adds that consumers are adept at frequently updating their own operating systems – a mindset that enterprises need to adopt too.
“The uptake rate of an iOS update by Apple, on the first day, is around 60 or 70 percent. Within only a couple of weeks it’s beyond 90 percent,” he says.
It can be overwhelming to think about transforming a whole technology system – a key reason why people avoid it. Alf has seen many enterprises try to tackle it all at once, leading to complexity.
“They put in even more scope, with the idea: the bigger the scope, the cheaper the project relatively gets. However, the complexity increases exponentially when you increase the budget. And we’ve seen that again and again; the failure rate in large projects is a lot higher than in smaller projects,” he says.
Cloud based solutions – known as Software as a Service (SaaS) are the way forward, Alf and Miller explain. Miller says to solve the issue of complexity, starting with a small transformation, rather than with a ‘big bang’, is advised.
“With mid-sized enterprises, we usually start with finance, then HR, then we might go into CRM (customer relationship management) as well. These core systems are effectively the foundation for any additional functionality that you’d want to implement in your businesses,” Miller says.
He explains that adopting SaaS works so well, as ‘best practice’ and easy-to-follow operational processes are already embedded. However, this means to get the maximum benefit from SaaS, enterprises may need to adjust their business model to fit the technology. Instead of being ‘unique’ with their processes, it can be more effective to adapt them to fit the software.
“What comes with a SaaS platform is a lot of benefit, and inherent integration, and it’s simplified as well,” Miller says.
Alf says many of the SaaS systems link seamlessly to each other, so there’s no need to stick with one vendor across every area of the business.
“And a lot of the integration can be free or low-cost. Mid-market businesses can suddenly tap into new resources, making them competitive and streamlined.”
If you’re still resisting the idea of an IT transformation, Alf says to think about your ‘differentiator’ – in other words, the thing that sets your business apart from competitors.
“There’s a shift away from enterprises saying, ‘We are unique in our processes’, to saying ‘We are unique because of our rate of innovation and time to market’. These answers automatically lead towards the capabilities of advanced cloud-based solutions – and therefore requires replacing systems that are not broken,” he says.
As technology keeps advancing, so must the way enterprises structure their investment approach. We bust the myth that IT investment is a ‘set and forget’ process in: The Myth: IT investment must be cyclical.
KPMG has launched a state of the art digital platform that enhances your experience and provides improved access to our content and our people, whatever device you are on.