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Legacy System Modernisation: peeling the onion

Retail IT is like an onion, growing more layers over time. New innovations and business changes have been adding layers for years, making it increasingly complex and “interesting.”

For many retailers, the reality is that legacy IT often doesn’t work as well as needed, particularly in a demanding and fast-moving marketplace. So, what’s the answer?

The layers..

Retail is often oversimplified into the Plan, Buy, Move, Sell model. While retail, like any other business, requires the fundamentals of finance, ledgers, HR, and reporting, changes in each of these areas—especially Sell (e-commerce, platforms, social media, loyalty, CRM, etc.)—have spawned new layers within the average retail business’s technology model, making life even more “interesting” than before.

Resistance and cost

Two of the biggest factors standing in the way of modernisation are resistance to change, and the cost of change.

It’s often easier to stick with 20- or 30-year-old assets. Change can seem too expensive, so projects get dropped in favour of workarounds, effective or not.

Inertia and cost aversion can come just as easily from IT or business. It might be rooted in the existing architecture, company politics, embedded skill sets, or just the sheer complexity of the multilayered global retail IT onion that grew over time.

We tried it, and it doesn’t work

Perhaps the business tried to introduce some modern concepts such as composable commerce or flexible integration.

They looked good on paper, and the board was convinced with buzzwords like agile, composable, and flexible APIs. However, the integration tools turned out to be surprisingly expensive, and the changes delivered less value than expected, without yielding immediate results.

Sound familiar? However the idea of addressing one layer of the onion at a time really helps.

Where’s the speed and agility?

One huge driver behind legacy system modernisation is the fundamental mindset change that’s happened around agility. Retail industry processes have shifted from snail-slow paper to lightning-fast digital, leaving many legacy systems straining.

You can spin a website up on a web platform in 10 hours. Answer your emails from the beach, abroad. Buy anywhere, anytime from any connected platform.

This expectation to be agile is making retailers frustrated with legacy; and determined to be different.

A composable micro-services architecture helps of course but it’s a sound principle to ring fence business critical systems.

Peeling the onion

However, the big challenge they have is you can’t switch legacy into agility overnight. There’s no silver bullet – certainly not big bang, big ticket transformation.

A better option is to use legacy while starting to peel away at the onion one layer at a time.

The secret is to evolve non-critical workloads that will yield positive outcomes or rapid ROI first, then slowly move up the chain.

Meanwhile, evolve your people’s mindsets to embrace change, assist ops and tech to collaborate well and walk in step, and help everyone weather the storms of change together.

Good leadership and failing well

Success also lies in having good business and IT leadership at the top; helping the board to navigate its fears; and encouraging the organisation to have a positive view of continual change. If there is one constant these days it’s change.

It’s important to get a business-led understanding of agile thinking: that everything gets delivered in the end, only step-by-step, and over time.

When things go wrong, which they will, it’s paramount that teams work together, and ensure the business-critical elements aren’t the parts that go wrong.

An ongoing roadmap

Finally, it’s essential to have a logical, three- to five-year roadmap to ensure continual change happens – and is controlled. The roadmap gets reviewed and amended every year as necessary.

We use a ‘manage to retire’ consulting model that aligns the operating models of your old and new technologies, including skill sets and ways of working, to ensure successful change.

We break down legacy modernisation into thousands of blocks that deliver results fast. And we recommend running legacy and modern systems side-by-side to de-risk and allow you to fail harder and faster.

Retail success story

By way of illustration, we helped one large global retailer to put all of this into action and innovate alongside legacy.

A global company in its own right, our customer is part of a much bigger group, which makes its architecture even more challenging as it encompasses its own plus group legacy systems.

Its long-term plan is to modernise the entire environment. We are approaching this from two angles: introduce technology that innovates for day-to-day challenges; and keep the core IT as it is. Consequently, our support layer covers both legacy and modern systems.

Among other things, we have helped the company modernise payments globally, while still operating its legacy systems, and staying fiscally compliant.

Our customer has been through a high level of change, including a major merger and acquisition of another business group. However, with the right roadmap, right skills, a collaborative agile approach, support and technologies now in place, we are confident of a successful legacy system modernisation.