Social Business Innovation & Legacy Systems

LEGACY SYSTEMS DEFINED

A legacy system is an is an old process, tool or behaviour that continues to be adopted even though more efficient methods of performing a task are now available

Legacy systems are often irrelevant in their current context

Legacy systems are a key cause of value erosion and business failure - largely because they slow you down

NASA's Space Shuttle program still uses a large amount of 1970s-era technology. Replacement is cost-prohibitive because of the expensive requirement for flight certification; the legacy hardware currently being used has completed the expensive integration and certification requirement for flight, but any new equipment would have to go through that entire process – requiring extensive tests of the new components in their new configurations – before a single unit could be used in the Space Shuttle program. This would make any new system that started the certification process a de facto legacy system by the time of completion.

Additionally, because the entire Space Shuttle system, including ground and launch vehicle assets, was designed to work together as a closed system, and the specifications have not changed, all of the certified systems and components still serve well in the roles for which they were designed.

YOU ARE NOT NASANew technologies & new understanding of human behaviour present an opportunity to replace legacy systems more easily, cheaply & quickly than ever before

Your business is not a closed system, it is an open system - the more open you make it, the more agility & innovation

THE IMPACT OF LEGACY SYSTEMS

THEY MAKE YOU SLOW

THEY DESTROY PRODUCTIVITYmissed market opportunities

hampered innovation

falling behind the competition

distraction fro

m value-generating activities

people hate working in overly complex systems

talent is prevented from rising

your best people grow frustrated & leave

AT NO POINT IN HISTORY HAVE COMMUNICATIONS & CULTURE MOVED FASTER THAN TODAY

The accelerating pace of change in business, characterised by global competition, means connecting the right people with the right information to drive business decisions means the difference between success and failure

IT’S NOT THE BIG THAT EAT THE SMALL, IT’S THE FAST THAT EAT THE SLOW

Avg life expectancy of companies in the S&P has dropped from75 years (in 1937) to 15 years - collapsing under their own weight

Big business is suffering from long-running performance declines

Return on asset rates are declining, even as labour productivity rises

The 3/2 law of employee productivity states that trippling your number of employees causes productivity to drop by half

Companies are no longer places that exist to drive down costs by getting increasingly bigger. They’re places that support and organise talented individuals to get better faster by working with others

THE NEW WORLD ORDER DEMANDS SPEED & AGILITY

This is the age of the collaborative, knowledge-based, hyper-productive organisation – where teams are connected across departments and geographies

WITH NEW CAPABILITIES COME

GREAT EXPECTATIONS

EXTERNAL24-7 REAL TIMEPRODUCT RESEARCH & COMPARISON3RD PARTY RECOMMENDATIONMISTRUST

INTERNALAUTONOMYTRANSIENCE & SELF EMPLOYMENTBORDERLESSNESSLEADERSHIP vs MANAGEMENT

EVERYONE CAN SHAREWHAT THEY CARE ABOUT

POSITIVEREFERRALS & RECOMMENDATIONS

NEGATIVEBAD EXPERIENCES

SO YOU ACTUALLY NEED TO BE A BETTER COMPANY

WITH A BETTER OFFERING

THIS IS THE ESSENCE OF BRAND BUILDING IN THE 21st CENTURY

LOOKING BEYOND CAMPAIGNS

SOME BRANDS & AGENCIES ARE ONLY FOCUSING ON THE FAÇADE

WHILE THE INNOVATORS OVERTAKE BY FIXING WHAT LIES BENEATH

PEOPLE

TECHNOLOGYPROCESS

COSTS YOU ARE LIKELY TO BE INCURRING NEEDLESSLY DUE TO LEGACY SYSTEMS INCLUDE...

THE COST OF SEARCHING

A typical information worker now spends a quarter of their day searching for the right

information to complete a given task

10% of a company’s salary costs is frittered away as employees scramble to find adequate and accurate information to do their jobs

So

urce: B

utler G

rou

p

THE COST OF COMPLEXITY

On average, the 200 biggest companies are losing an estimated 10.2% of profit as a result of unnecessary complexity

Removing this complexity would save each firm $1.2 billion of lost profits on average -

or a total of $237 billion across all 200 firms

THE COST OF LEGACY SERVICE MODELS

Call deflection savings from P2P support communities are typically 15-30%= £millions cost savings + increased employee efficiency

Support communities increase conversions, average transaction value, reach, engagement and SEO - often becoming #1 traffic driver to your site

Product issues are typically reported 3-4 weeks faster through community vs traditional channels

Customer satisfaction results are typically 15–30% higher amongst those who participate in user communities

Some companies are eliminating phone and email support altogether

THE COST OF LEGACY DEVELOPMENT MODELSBRINGING THE WALLS DOWN AROUND YOUR DATA DRASTICALLYREDUCES DEVELOPMENT COSTS & ACCELERATES GROWTH

Amazon were already achieving $19bn sales through their API by 2008

60% of eBay listings go through their API, with $500m in mobile-based application revenue

THE COST OF EMAIL ADDICTION

Email costs organisations of 3000 people £15 million per annum – just over £5k per employee

For a larger organisation of 6000 people, the cost escalates to £64 million – well over £10k per employee

Problems include ambiguous and unclear messages, email ‘overload’, security and privacy issues and destructive interruptions

THE COST OF LEGACY BUSINESS MODELS

ADAPT & OUTPERFORMA better business model often beats a better idea or technology

Businesses compete through their business models - therefore the business model itself is a source of competitive advantage

A disruptively innovative business model can become your company’s key asset and USP

THE COST OF ENDLESS MEETINGS

Professionals attend on average 61.8 meetings per month; and over 50% of this time is wasted

Assuming each meeting is 1 hour long, this means professionals are wasting 31 hours per month

On an average salary is £40k, this equates to £7,400 wasted per employee each year

THE HIDDEN COST OF

FEAR

lack of accountability

inability to make decisions

failure to innovate

analysis paralysis

THE HIDDEN COST OF UNOPTIMISED COMMS

New knowledge in neuroscience and behavioural economics can enable us to influence decision-making – yet these learnings are rarely applied in organisations, leaving money on the table

For example a recent pilot study, applying behavioural economicsprinciples, claimed the NHS could save £250 million in missed

appointments simply by having patients write their ownappointment cards

THE HIDDEN COST OF WHEEL REINVENTION

repeated mistakes - failure to learn

strategy duplication

duplication of roles & effort

millions of hours wasted

loss of momentum & inability

to keep up

THE HIDDEN COST OF

PRESENTEEISMTIME SPENT PHYSICALLY PRESENT BUT NOT REALLY DOING YOUR JOB

increased absenteeism

low employee retention

failure to innovate

lack of creativity

I’m distributing this presentation under a Creative Commons license, so feel free to share and change it according to these terms:

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Jane Young

• Technology entrepreneur and founder of boutique digital agency Kanbee, agile project collaboration tool Scramblr and enterprise tool for innovation acceleration Daander.

• Social business consultant to leading brands, helping them create and capture value from emerging trends in technology, society and the workplace.

• Writing on social business and the new world order at www.resonanceblog.com

• [email protected] @resonanceblog http://uk.linkedin.com/in/janesyoung