Organizations that successfully embrace agility at the core of their operating model can accelerate innovation and raise the bar for performance. Yet when it comes to implementing an intelligent operating model, companies often fail miserably. To make the leap to enterprise agility, companies need to tackle one of the elephants in the room – legacy IT. It’s an issue so big that 77% of executives report that their technology architecture is becoming “very critical” or “critical” to the overall success of their organization. 

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Without the right investment in digital transformation, many may struggle no matter how skilled their people are or how flexible their organizational structure. It’s a bit like assembling a group of the most skilled, motivated and experienced sailors for the America’s Cup. One team competes on a ship built on antiquated specifications. While another sails a craft made with cutting-edge materials and the latest technology-enabled equipment to monitor performance and guide them through their journey. It’s easy to predict which team will finish first. 

The older model ship is an organization weighed down by its inability to exploit the latest technology to achieve better performance. This is often because they are utilizing legacy IT designed for old school rules of engagement, which is exacerbated by a proliferation of unintegrated systems and data. Instead of nimbly deploying the expertly honed skills of your teams, old tech sandbags them, putting a major drag on competitive mojo.   

Overcoming this requires modernizing by making investments in intelligent technologies such as cloud, artificial intelligence, blockchain and robotics, and at the same time evaluating the potential of existing systems (the new and the old). Existing technology can have a role to play. Leading companies take this approach on an ongoing basis, transforming and incrementally evolving their capabilities to help them realize the full value of technology innovation. 

Let’s make this real. Take agile product teams that have end-to-end accountability and all the skills required to deliver on their customers’ requirements. But when they go to build their solution, they get bogged down in queues: To access data, for developers’ time on monolithic applications, to test and release new products or features, or to use core infrastructure owned by other teams. This is as much an issue for physical products as information service companies. They’re held back from rapidly getting new products to their customers and responding to changing demands.  

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Instead of migrating the old technologies to the new world, intelligent organizations rearchitect their IT to increase speed-to-market, agility and efficiency.

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Wired for agility 

Success requires revisiting the full data and technology architecture. Instead of migrating the old technologies to the new world, intelligent organizations rearchitect their IT to increase speed-to-market, agility and efficiency.  

Amazon has demonstrated the power of modern data and technology architectures in underpinning speed, responsiveness, and growth. Jeff Bezos issued a now famous API (application programming interfaces) mandate in 2002 that enabled a common backbone connecting AWS, Zappos, Audible, Kindle and Prime, giving Amazon the agility to launch relentless attacks into new business domains. 

Manufacturers are using automation and flexible technologies to increase product customization and reduce time-to-market. Canadian American start-up Wiivv, uses 3-D printing to create shoes tailored exactly to individual customers feet measurements based on scans uploaded to the manufacturer’s app from customers’ smartphones. Nike i-D is another example of how technology is enabling manufacturers to extend product lines through customization.

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Here’s my take on how to address legacy IT:

  1. Democratize data: Policies should be biased towards collaboration, allowing everyone access to all data and technology. Data should not be treated as a source of one person’s or function’s power but as an enterprise-wide asset. Carefully establishing the right data governance and infrastructure, and utilizing the latest technology to ingest, connect, organize and drive insights that are available to all enhances decision-making and can generate new revenue streams.
  2. Build modular platforms: Organizations should architect software in smaller modular units of functionality with clearly defined interfaces taking full advantage of cloud. Manufacturers should continue to extend the use of modular platforms (like the car industry has) that can accommodate multiple products and models and help them to build new products faster.
  3. Empower creatives and engineers: Help agile teams to build their own products by providing development tools, standard interfaces and collaboration tools. In a physical product environment, organizations should provide both virtual and physical prototyping tools, and establish more flexible manufacturing facilities.
  4. Infuse intelligent technology: Apply the latest technologies to the product design, development and delivery process. Remove monotonous work that can be done faster and more accurately by machine. Use artificial intelligence and machine modelling to scenario test, predict and prepare for potential issues and optimize production.

Sailing ahead 

Cracking the technology paradox requires unlocking human ingenuity to deliver on the promise of technology. Bringing all this together is challenging. I believe that those that can master the right combination of business and technology skills can sail ahead of the competition. If you’re ready to tackle your legacy IT, we’re here to help.  

 See more Enterprise Strategy insights. 

Kent McMillan

Managing Director – Talent & Organization, Operating Model & Organizational Design

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