Insights in your inbox

Why Larger Companies (Sometimes) Take Longer to Upgrade Their Tech

September 22, 2022

If you have ever logged into an online banking platform, you’ve probably noticed that they tend to have user interfaces that would fit perfectly into the early 2000s — or even the 20th century. Maybe you are a part of an organization that relies on systems so outdated they’re almost comical.

Why is it that the largest companies, far from being the most innovative and willing to invest money, tend to be the most resistant to upgrading their technology? It’s complicated.

The curse of the legacy system

The term “legacy system” refers to software programs that should have passed their expiration date by most standards (because superior technology now exists, and upgrades are available). This is common among older, larger companies — they may have developed software in the 90s or early 2000’s and have continued using them because they are a “beast” or the company is convinced there isn’t a solution available to do all the current system does.

While the mechanisms behind these programs would seem laughable to an outsider who knows anything about technology, they often do just fine at producing their function. So, why fix it if it ain’t broke? Um, it is broken, you’re just so close to it to see it is a burden.

Well, here’s why: A report focused on data and analytics found that 88% of companies are held back in their ambitions to be more data-driven by legacy technologies. As a result, billions of work hours are lost across the globe each year.

And although the concept of legacy systems generally refers to software, hardware equipment faces similar issues, with many businesses unwilling to veer from what they know already. So, what gives?

The larger the scale, the harder to change

At first glance, you might think it would be easier for a large conglomerate to undergo an expensive technology overhaul than a tiny startup. But despite the difference in budgets, the opposite is true.

Larger companies have a larger workforce, making it more daunting to implement organization-wide changes that would have to involve retraining everyone. On an individual level, people are often resistant to change — especially if they’ve been working with certain software or hardware for decades. This may also mean it takes them a long time to learn and feel comfortable with a new system; while this might not sound like the end of the world on a person-to-person basis, when the entire organization is reacting in this way, it results in huge losses of time and money.

Naturally, this kind of retraining can be expensive — not to mention the costs of buying or upgrading the software itself. Imagine choosing the wrong software? See our articles on Process mapping for more information.

Transformations take time

Plus, if people are working around the clock, finding the time for an upgrade is tough. There has to be a window of time when the systems are down as a transition is made (especially for a transition in hardware), and staff members must be trained in how to use something. During this time, a company may be unable to communicate with clients or partners.

In some cases, it could take many months to fully write a program if it contains a lot of data, making it practically possible to switch over due to the impossibility of pausing all operations for that long.

Besides, if a company developed a piece of software back in the 80s, there’s a good chance that just about every other process that company has created since the 80s has been linked to that software.

That’s why banks often struggle. They might have been using one program to record customers’ transactions and accounts and changing this could be catastrophic.

Fears of failure

Given the factors outlined above, it’s clear there’s a lot that can go wrong when you’re upgrading tech. And many companies have a “transition-gone-wrong” story or two — maybe they lost data while transitioning, couldn’t work properly for a week, or chose a program that didn’t even work.

Once an upgrade goes wrong once, it will generally make an organization even more resistant to change. However, all this failure really shows is how important it is to get things right by following proper processes, planning out everything in advance, and making sure you don’t cut any corners. That’s why it’s sometimes necessary to enlist help.

It’s never too late to change

While bigger and more established organizations might find it more difficult to upgrade their technology, it can still be done. Given the scale of the transformation, the best way to get results is by bringing a third party on board to help. Do it right the first time or you will regret it, process map your current state.

At Cornerstone Paradigm Consulting, we’re used to carrying out seamless changes in technology that look after your processes, people, and customer experiences along the way. To find out more, book a free consultation today.