Legacy software challenges
Legacy: Why are legacy organisations' software challenged?
As things start slowing down over the summer, I am looking forward to a summer break, i find myself with more time to catch up on a backlog of reading, shorts, videos, podcasts all stored up.
The genesis of this article is credited to a short on youtube posted by @howtoactuallyinvest where the Ford CEO talks about the benefits that Tesla has over Ford through integration of their software.
Here is the link to the short - Ford CEO on software
The insights from the short applies to many a business organisation out there. A series of all rational decisions made by leaders in the business through the years leads to the current status of software is in the business.
Further, in trying to manage costs, or by having (over-)zealous procurement folks (who rightly as they are asked to do so...) focusing only on price (at the cost of flexibility that maybe needed in the future) the businesses may create strategic inflexibility.
Many legacy businesses have the same set of challenges:
Ok that is the situation and we understand the complicatedness that provides. So how do they find a way out of this labyrinthian challenge?
Before we consider that it is important to consider other challenges that one is likely to encounter in reducing the complicatedness. Typical organisations face a few other issues:
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All of these lead to progressive management after management fixing some of the basics, but delaying the complicated uncoupling and decoupling of legacy and leaving many businesses running on unmodernised software. These businesses therefore expose themselves to risk against competitors who is unencumbered and can therefore respond effectively to the challenge.
So are legacy organisations doomed with ancient software - what is the solution space?
I don't think so. I have met and supported many progressive business and technology leaders who have understood the necessity of progressive modernisation while navigating the complex constraints.
Here are some of the lessons I take away from these interactions:
In doing so, technology executives and techno-literate business leaders have a lot to contribute:
Many a legacy organisation has the "north star", "future state", "blueprint for the future" architecture map to improve legacy - the ones who are better off are the ones who focus on actions rather than theoretical plans which do not stand the first test of business readiness to change.
Strategy | Effectiveness | Efficiency | Change
1 年Yet Tesla had nothing when they started - they built from scratch. So why didn't Ford try to build an EV business from scratch? Trying to shoehorn old systems and value chains into new capabilities, rather than doing blank sheet design, is always going to run that risk. And then you get into some interesting cost of capital and risk arguments - because ground up new ventures may have different 'natural owners' to incumbents. The #EnergyTransition forces this choice on incumbents seeking to grow in new technologies. It's not just software, but supply chain, organisation, governance - Operating Model in fact. Perhaps incumbents need to design their blank sheet operating model, and then ask 'where do current assets/capabilities meet these needs exactly?' (ie where would our incumbent business, systems, assets be the best place to source this element of the Op Model?)