Should You Replace Your Aging Technology?
Part 2 of 2
Consideration #4: The Secluded Silo Syndrome
Many companies have purchased various software products over the years to meet some type of business or operational need. These purchases inevitably resulted in creating silos in different parts of the organization where it is hard to keep information (some/much of it duplicated) synchronized. Old software and old technology also means that newly hired employees have no experience in that technology and require extensive training just to use the technology to carry out their duties. Also, reporting is simply so much work that the business doesn’t get the information they want when they need it.
Some businesses have considered whether to spend money to develop something like a business intelligence layer over the top of the existing systems, or whether to spend their dollars to upgrade to a modern software system where all the data is stored in one place. Past Chairman and CEO of General Electric, Jack Welch, once said that “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.”
A key consideration that is faced by companies who find themselves in this position, is whether their existing software systems can effectively scale up to accommodate the planned growth of the business, or will the limitations of these old systems hinder their growth? Given the rate of change in business today, there will come a point at which the existing collection of systems just can’t accommodate the organization’s needs.
For example, can those applications support new governmental regulations, or any necessary certification/accreditation requirements? With natural attrition, there is a growing gap between new and existing employees. Does a viable business really want to invest in training new employees on obsolete applications? Usually, this is a negative…therefore, the question becomes not “Should we change?”, but “When should we change?”
Everyone understands that there is a cost of replacing outdated systems and software tools, and this is usually the main reason that management gives to delay any upgrades. But, remember this; you’re also paying a daily price by continuing to rely on those clunkers, and possibly putting the business at undue risk.
Consideration #5: Acknowledge the Objections
Because old software or hardware is still in use, senior management personnel often see no need to replace it. They think, "If it ain't broke, don't fix it." There are many phrases that management teams have used over the years when defending the continuing use of old software and continuing to delay what they know in their heart really needs to be done, based on the feedback (and sometimes complaints) they are getting from their ‘down in the trenches folks’. Some of these include:
- ●The old system works fine.
- ●We’ve always done it that way.
- ●New technology costs lots of money.
- ●New software will require a big investment in training time as well as money.
- ●New software may require some customizations.
- ●We’re busy; we don’t have time for this.
- ●We’re slow; we don’t have the money for this (please ignore the new Escalade in the parking lot).
- ●etc.
Everyone understands that management is simply trying to limit spending in any way it can. However, think about this; if you never swapped out your old equipment, and upgraded to better, faster, more efficient, cost cutting machines, think about the problems you’d still be trying to solve! The use of software is a very critical component of your business; so, it's really not a question of if you should switch to better, faster, more efficient software, but when.
Consideration #6: Dangers of the Do-nothing Approach
For the sake of argument, let's say that your company decides to change nothing, and continues to use the old software or hardware forever. Take a moment to think about what would happen…
At some point in time, your software will not work on newer machines and modern operating systems and browsers, because they are constantly changing. Here’s something on a more personal note for you to consider; if you oversee your company’s technology investment you need to understand that when the old computer equipment and/or old software systems fail, and the business is ‘dead in the water’ without it, management is going to blame you. So, why wait for it to fail when you can be proactive, rather than reactive; start planning now and mitigate the risk. Assistance is available to help you develop a strategy for reporting on the risk of the situation, and help senior management begin to study the possibility of replacing old technology based on effective risk management techniques.
At some point — and you never know when — some sort of system update or service pack may cause your old software to simply stop working. Also, we have heard from other companies that their customers started complaining because they couldn’t get them the right data that they needed in a timely fashion in order to continue to do business with them. Why risk losing a good customer? Even if time stands still at your company, it’s still moving right along for your customers (and your competitors).
Summing Up
The challenge now falls upon us, as business owners, to estimate the financial risk that each of our companies are taking when we choose to work with outdated computers, peripherals, operating systems, and the software we use to collect the day-to-day data that we need to run the business and stay competitive. By explaining the cost of doing nothing to the rest of your management team, you may be able to persuade them to start doing something instead.