How best to deal with your legacy IT
In the last few years, we have seen major security breaches, stricter compliance requirements and higher expectations from consumers, which are forcing many companies to take action on obsolete IT systems and IT architecture which are creating growing technical debt.
An increasing number of companies are therefore investing aggressively in increasing their business agility so they can respond better to customers' constantly changing behaviour and act rapidly in a world of change and disruption.
What we often see, however, is that the efforts - no matter how determined they may be – do not deliver proportionate benefits. Instead of focusing on strengthening the foundations of the digital journey and business transformation through providing an increased mandate for IT architects and replacing legacy systems, the money is often spent on new digital initiatives. Yet the digital initiatives depend on the IT foundations, and therefore are difficult to scale up and get widespread use if there hasn’t been enough focus on improving the IT basics.
We see two types of initiatives in the large Danish companies that actually make a difference.
It has to be simple to work
The first initiative is to get rid of your technical debt through large simplification programmes, often in the billion-dollar range. The mission is to simplify the IT landscape by reducing the number of systems, consolidating processes, standardising services and focusing on fewer and smarter integrations.
Nordea tackled the consequences of their accumulated technical debt in 2014. They did so mainly through acquisitions and consolidation from the start of their major simplification journey. They had initially allocated €1 billion to the programme, and 6 years later it is still running, which says something about the complexity of this kind of exercise. Nordea's goal is to create a scalable, resilient and digital relationship-building bank, and Nordea is far from alone in wanting to simplify.
This type of programme has the advantage that it generally creates a faster "time-to-market" and reduces operational costs when developing new digital products for either customers or for internal use in the company.
Know why you are using the framework
The second type of initiative is about increasing the focus on avoiding new technical debt by defining and following IT architectural principles through increased investment and a mandate for creating the right IT architecture. The principles must facilitate and make the case for the optimal IT landscape. Those creating the architecture have to decide when they need to stick to the principles and not be influenced by the need to "fast-track" decisions, and when they have to compromise to avoid slowing the organisation down.
Many architects rely heavily on the very large frameworks, such as TOGAF, but in our experience there is an essential additional factor that many forget: the need to define a method and apply an architectural understanding of the individual organisation. It is important that you get that work done, so that you can highlight the important principles and get a common understanding of how the framework relates to and supports the overall IT strategy. Too few do "focused projects", where the framework is completely in place from the start and then is properly communicated across the organisation. A project where resources are not 100 percent dedicated to the task is not going to be a success. It ends up either not being completed or failing to become part of the life of the organisation.
To avoid ending up in the same situation facing many large organisations right now of significant technical debt, when new solutions are to be included in the IT landscape the majority have adopted frameworks and methods that focus on cutting all technical debt early in the delivery process.
The so-called "Architectural Runway" is one of the approaches delivery-focused projects and programmes are using. It is one of the key approaches in the agile framework SAFe, which creates an agile architectural strategy. This is a building block to prevent projects from accumulating technical debt both during the project's lifetime and throughout the organisation. This is done by preparing the necessary architectural foundation. An additional benefit of this type of initiative is that time-to-market is reduced by having laid the foundations in advance, in order to avoid major surprises, uncertainties and minimise risks.
We believe that these two initiatives are among the most important and have the largest impact if you want to increase your business agility and remove and prevent technical debt. We have seen time and time again that companies put off getting started, as in the short term it is expensive and complicated, but in the long term it is an absolute necessity if they are to remain competitive both in meeting customers' changing needs and managing operating costs.