Digital Transformation 5: Sailing around Sinking Ships

image by Pok Rie

Welcome to the next installment of my Digital Transformation series! In Parts 1 through 4, we covered the foundational elements of digital transformation, from understanding the digital landscape and setting clear goals, to building a strategic roadmap and learning how to effectively prioritise projects. With these essentials in place, your organisation is well-positioned to embark on the journey toward a successful digital transformation.

In this fifth part, we turn our attention to a critical and often underestimated aspect of the transformation journey: Addressing Legacy Systems and Technical Debt. As organisations evolve, many find themselves grappling with outdated technologies and processes that were once effective but now hinder growth. This is usually the very reason any business embarks on a digital transformation in the first place. 

These legacy systems, while valuable in the past, can become significant barriers to innovation, agility, and operational efficiency as your company strives to meet modern demands.

I realise I've been a bit unkind here in refering to legacy systems as sinking ships, but the metaphore is at least somewhat apt. At some point the solution, like a ship, was designed and built, possibly even custom to a given need. It probably sailed wonderfully for a while, but due to changing tides and lack of maintenance it's started taking on water. 

So, what kind of water are we talking about, what are the issues that can be faced:

• Compatibility Issues: Times change and tech moves fast. Older systems were not always built with future technology in mind, which makes integration with modern tools difficult and costly. These systems often require complex workarounds, leading to increased resource allocation and the risk of critical failures.

• Limited Support: Outdated systems typically have little or no support available, both internally and externally. The original developers or vendors may no longer offer updates, patches, or fixes, and internal knowledge of these systems may have dwindled over time. This leaves your organisation vulnerable to prolonged downtime and significant operational risks.

• Operational Inefficiencies: Legacy systems are usually tied to outdated business processes, resulting in manual workflows, bottlenecks, and inefficiencies. Additionally, the data stored in these systems is often siloed, limiting your ability to perform comprehensive company-wide data analysis and strategic decision-making.

• Security Risks: Outdated software is an easy target for security breaches. Without regular updates and security patches, legacy systems can expose your organisation to cyber-attacks, data loss, and compliance violations, endangering your reputation and financial standing.

image by Lukas Hartmann

So now we are clear on the risks, and we've got clear business direction for the change that needs to happen, we need to dig into the specifics of what needs doing. This isn't a linear step, but part of evaluating the work I described in part 2 and the roadmapping activity in part 4.

• Identify Key Issues: Begin by assessing your current technology ecosystem. Identify where your legacy systems and technical debt are causing the most friction—whether in operational inefficiencies, security vulnerabilities, or difficulty integrating new technologies. Understanding where the biggest pain points lie will help you prioritise efforts and avoid wasting resources on less critical areas.

• Plan Incrementally: Tackle technical debt and outdated systems in phases. Attempting to overhaul your entire infrastructure at once can overwhelm your organisation and disrupt business continuity. Instead, take a phased approach—address the most pressing issues first while planning for long-term improvements. Incremental updates allow you to gradually modernise your systems while maintaining stability.

• Evaluate Improvement Options: Not every legacy system needs to be replaced. In some cases, upgrading or improving a system in situ may offer the best balance of cost, effort, and benefit. Evaluate whether it makes sense to retire, upgrade, or integrate legacy systems based on their current and future role in your business operations. Reducing complexity and risk is still progress, and sometimes simplifying your infrastructure without wholesale replacement is the most practical solution.

Case in Point:

Take IBM as a prime example of how to approach legacy system modernisation. Over the years, IBM had built up a labyrinth of legacy systems and technical debt that began to stifle its ability to innovate and respond to market changes. Rather than opting for an all-at-once overhaul, they embarked on a multi-year, incremental transformation. This included migrating to the cloud, adopting Agile methodologies, and making innovation a core business priority. By strategically addressing technical debt piece by piece, IBM was able to modernise its IT infrastructure without sacrificing business continuity.

Technical debt doesn't have to be daunting. By aligning your digital transformation strategy with thoughtful, phased improvements, you can gradually bring your systems up to speed, minimise risk, and set your organisation on the path to sustained innovation.

Finally, the final part. 

Next, we’ll explore the importance of Monitoring and Continuous Improvement in digital transformation. After modernising your systems and processes, how do you ensure that your transformation remains agile, adaptive, and able to respond to new challenges and opportunities? Find out in the final installment!