There are days when IT departments must feel like they’re getting nowhere. They work on new projects with enormous dedication and speed, develop one app after another and steadily enhance the customer experience in this digital age. But no sooner are they within sight of their goal than their IT architecture lets them down and they find themselves having to go back to square one. Integrating legacy systems into the new digital world requires a great deal of resourcefulness and the task seems almost insurmountable. No company can afford to deceive itself into believing that it can build a completely new IT architecture from scratch.
CIOs around the world are familiar with the agony of this process, as Bain discovered in a study among 150 IT decision makers at banks, retailers, consumer goods producers and insurance companies. One third of those interviewed declared that, in each case, despite all the work achieved in previous years, their IT systems were still not sufficiently equipped to fulfill the needs of their customers. One key reason for this was their present IT architecture. Retailers and insurers complained above all about deficiencies in achieving a consistent omnichannel experience. One in two consumer goods producers reported weaknesses in areas such as procurement and data analysis, while banks stated that they experienced most difficulties with their fully-automated transaction services as well as in human resources and risk management.
Yet in spite of the shortfalls identified, only 35 percent of all companies surveyed said that the investment needed for their IT modernization had been set aside, with only around 20 percent earmarked for optimizing outmoded systems and the remainder for enhancing current processes.
Legacy IT architecture – a mortgage on the future?
These evident weaknesses offer insight into why so many companies view their IT architecture as a mortgage on the future. In most cases they know where the problem lies. The study reveals that on average some 65 percent of those surveyed admitted that they were aware of their current technological deficits. Only in the consumer goods industry do 17 percent appear to have insufficient awareness of this.
Yet right now the possibilities for creating an up-to-date IT architecture do indeed exist. Concepts based on changing everything at once or on the idea that it all can be started from scratch are an illusion in today’s (micro) service-oriented architecture. Instead, local IT capability can be modernized piece by piece in accordance with the requirements that are the most pressing. This will inevitably incur considerable expense, and the achievement won't simply happen overnight. What's more, there will have to be a transitional period during which the investment of considerable funds into existing systems will be necessary. But by having a holistic view of this kind, the situation will improve from year to year. Over time, an IT architecture will evolve that will be able to function at high speed, all the way from the app to the entire core system.