Is your IT ready for retirement?

In the next few years we will experience the largest retirement wave ever, and it will include a lot of IT employees. Many companies are still using outdated technologies and it is a daunting task to find enthusiastic IT-experts who are able and willing to work with the old stack. Not replacing the legacy will damage these companies sooner rather than later.

Keeping up with technological developments can be a serious challenge. Not doing so is creating a technical debt that inevitably has to be paid off. The greater the debt, the greater the risk that the company will fall behind and lose its competitive power. Many business leaders find out by shock that technical debt was accumulated almost unnoticeably. A recent client of mine was one of them.

With IT department, where developers had been working for 20-30 years, the company has built a great proprietary system covering lots of areas from CRM and ERP to HRM and many stand-alone applications. Tools and infrastructure were still based on the older technologies, but everything ran smoothly and nobody complained.

Then the CTO retired and his successor joined the organization. The first thing he did was a thorough assessment of the situation. The CEO was quite shocked to hear that there might be a serious contingency for the business because several of the key IT-staff were about to retire and lots of knowledge would leave with them. Moreover, it might be difficult to find a new generation that would be willing to work with the old technology stack. This would seriously hamper the company's ability to maintain the vast code base, let alone cater for future business needs.

And on top of everything, because the focus was always on sustaining the old systems, the company had not taken sufficient notice of the benefits that new technologies could bring to its business. They completely missed out on the advantages of things like data engineering, machine/deep-learning algorithms, cloud technologies and many more. Was the organization's productivity going to take a nose dive?

This situation is not unique. According to FCA, more than 90% of financial services companies rely on legacy technology and subsequently have vulnerabilities to their business. Old technology has become a serious barrier to business growth. Nevertheless, many business leaders are reluctant to touch it – “don’t fix it if it ain’t broke” – because the risks and returns are uncharted. Meanwhile the clock keeps ticking ...

As software engineering gets easier, release cycles get shorter. This brings the benefits of new features, improved performance and enhanced capabilities to your business faster. But in the time span of a few years entire architectures and software landscapes change. Those who fail to keep on par with the evolutionary developments will some day find out that leaping from the outdated technology to current standards is a formidable and costly endeavor. New technologies often require different skills and knowledge to deploy. The problem is exacerbated when IT staff is leaving the company, taking the knowledge of the legacy systems with them.

To mitigate contingencies I recommend a 5 step plan:

1. Assessment - make an accurate assessment of the current state of your IT and map dependencies and potential risks.
2. Externalize risks - externalize trivial responsibilities and tasks to cloud, SaaS and other service providers.
3. Software lifecycle management - draft and implement a software lifecycle management strategy with planned upgrade cycles, designed for change.
4. Modernization or replacement - initiate a project to modernize or replace legacy systems.
5. Drive change - motivate internal staff to investigate and adopt new technologies and reward for progress on personal development.

Most of all, don't hesitate to rethink your business model and product/service portfolio.

The digital revolution is making big steps and it is well imaginable that your business will profit from an upgrade too. Think big. Make every investment to overhaul your IT (or parts of it) count for the future needs of your business.

As for my client, we conceived a migration plan to refactor and migrate their infrastructure and business applications to a dedicated cloud of managed services. Functionality of business applications was reevaluated and modernized to make optimal use of the latest data analyses techniques to improve marketing and sales. Some customer services were digitalized to increase efficiency and improve quality. There were few awkward moments when old datasets were the cause of disruptions and confusion, but all the inconsistencies were cleaned up and we were saved by containerized infrastructure that allowed modular testing. Now the guys are ready to transition into their well-deserved retirement.