As technology evolves, modernising legacy systems in procurement becomes essential.
Change management is never straightforward or linear. Indeed, legacy systems are familiar to an organisation and the workforce might be reluctant to embrace a new way of working, or at least at the very beginning.
But how much damage is clinging to outdated processes doing to an organisation?
Replacing legacy systems
“For many organisations, legacy systems are seen as holding back the business initiatives and business processes that rely on them,” according to Stefan Van Der Zijden, VP Analyst at Gartner. “When a tipping point is reached, application leaders must look to application modernisation to help remove the obstacles.”
People often like their routines and a preferred methodology of how something is completed. This can lead to pushback from the workforce about the purpose of ‘fixing something if it isn’t broken.’ And the point of change for the sake of change is a valid one, up until an alternative which is going to demonstrate tangible benefits. The truth is that most legacy systems don’t allow for growth with older technology often not able to interact with newer systems and processes. In ‘7 options to modernise legacy systems’, Gartner pointed out six main drivers of application modernisation with three from a business sense and three from an IT perspective.
These are business fit, value and agility as well as cost, complexity and risk. If a legacy application isn’t meeting new requirements needed by a digital business, it needs to be modernised to fit properly and should be enhanced to offer greater value to the business. Without agility, a digital business will struggle to keep pace with the latest trends or craze and put the organisation at risk of falling behind competitors. Whereas from an IT side, if the total cost of ownership is too high or if the technology is too difficult to use, then modernising could be vital.
Overcoming resistance to change
Ultimately, change management is an essential component of any Chief Procurement Officer’s role. It can range from a small swap, such as a change of supplier, to wide-scale amendments such as altering the way goods and services are acquired or implementing a procurement or software transformation. According to data from group purchasing firm Una, 70% of change management efforts fail. In order to combat this, there are three key steps to overcoming resistance to change. These are engagement, managing resistance and not neglecting training.
Market disruptions, evolving customer demands and the necessity for a digital landscape has forced businesses’ hands. They are now faced with the task of completing legacy modernisation as a matter of urgency to deliver innovative products and services quickly and efficiently. Failure to do so could lead to being reactive instead of proactive – a risk that in today’s fast paced and ever-changing world that should be taken with caution.
