This is the next article in this series of 5 IT Risks That Could Cripple Your Business: How to Mitigate Them. Please refer to last week’s article for risk #4. Today, most businesses use a number of different systems to cover functions like accounting, inventory control, customer management, supply chain, project management, and on and on. The number can be quite extensive. Some organizations choose comprehensive ERP systems SAP Hana, Oracle ERP Cloud or Microsoft Dynamics that have separate modules that satisfy a number of different business functions. With all those systems, managing upgrades and keeping up with new versions can be a challenge to most organizations. However, this brings on many issues from security vulnerabilities to user satisfaction. It is fairly common to see outdated IT systems playing a key role in a business IT portfolio.
There never seems to be a great time to replace an outdated system or even perform major system upgrades for that matter. However, most of us are familiar with the term Digital Transformation ? People have been talking about it for years, however, ask 10 people what it is and you get 10 completely different answers. My definition is simple, integrating technology into all areas of the business to reimagine business processes by leveraging technology to improve processes, increase efficiency, and improve the way they deliver value to customers. However, so many business processes are coupled with systems that are a major pain to make any changes because they are old. It is hard to take advantage of all the promises of digital transformation if your technology stack is littered with old outdated systems that do not scale well. Not only do they keep an organization behind but there are many risks that are caused by outdated systems.
Why Outdated Systems and Processes is a Risk:
I have seen organizations hold onto old, really outdated technology systems way past their prime over the years. There are a number of reasons why they do so. It is too difficult to replace. It will be very expensive to replace. A replacement project is on the roadmap and will be done someday in the future. They have not found the right system to replace it with. People in the organization are familiar with the current system and replacing it will really disrupt the organization. They are having trouble getting business stakeholders to buy into change being pushed by IT. The list goes on an on. However, business is littered with organizations that did not want to change and before they knew it, competitors had gone right past them and they quickly became obsolete. Walmart is known as a great Supercenter but it is also an organization that has used technology to get a leg up on some much larger and established competitors. Anyone remembers K-Mart or Montgomery Ward ? These days, the winners are those that disrupt the status quo. Adopting new technologies that enable organizations to scale and add more value to customers is paramount and therefore, replacing old, outdated systems is a must. Don’t believe me, here are a few risks that should be considered for those that continue to rely on older, outdated systems:
How can we mitigate the risk of Outdated Systems ?
The risks for continuing to use outdated systems can be great. Many organizations may think that we cannot afford to change the systems right now but what they should be saying is that we cannot afford not to change the systems right now. What if I asked you to build a list of companies that you are aware of that really took off and scaled by playing it safe and using older, outdated technology. Now think about the ones that were known to have used technology to the fullest and scaled. I would suspect that it would be much easier to build the latter list.
However, many things can be done to protect against the risk of using outdated systems.
In closing, outdated systems are definitely a risk to a company. The very nature of companies that are agile would suggest that those who whole-heartedly embrace digital transformation realize that change is necessary and will be less likely to keep Outdated systems in place long after their best usage dates have passed. Organizations should remain proactive and regularly evaluate their technology stack to be sure that it aligns with their business goals and have the staff on hand to properly support it.
Please look for next article on Risk #2 next week.