Although banks and insurance firms have considerable resources, financial industry infrastructure strategy and technology transformation projects often achieve mixed results.
The problem may relate to the divide between business and IT functions, the struggle to place priority on the long-term benefits of legacy system replacement, and limited appetite for high risk, large-scale technology projects.
To address cumbersome, business-critical legacy systems, many financial institutions have embarked on technology transformation projects, which unfortunately often produce lackluster results or fail outright.
Meanwhile, other financial institutions have yet to decide how to confront their legacy system vulnerabilities and have engineered around the edges of their legacy platforms to provide customer-facing capabilities.
Still other successful, respected institutions have still not taken action due to the high stakes of making multi-year, multi-million dollar infrastructure change that is unproven and will provide no obvious, near-term Return on Investment.
Decision-making deadlock can come from the wide array of apparent legacy system solutions. Senior management may be overwhelmed by the options, trade-offs and unknowns. In many cases, interim, less-costly solutions to patch the problem or outsource legacy system maintenance are preferable. Or, financial institutions have determined that deferring legacy system renewal is the best decision.
The age-old divide between business and IT groups may mean that technology leaders’ often have limited access to the leadership table. Also, technologists may not have clearly communicated the gravity of the legacy challenge, nor articulated the alternatives or the benefits from a business vs. technology viewpoint. They must also communicate precisely the potentially greater risk of inaction, with both business and technology considerations.
The technology community can garner senior support by selling both the sizzle and substance of a technology transformation project:
Those organizations that face their legacy challenges in this spirit, coupled with meaningful culture change, can reclaim control of the technology labyrinth and be well positioned for the future.
To read the full article, download the PDF.