Technology Modernisation: Why Do So Many Companies Fail?
Over the last five years, I’ve participated in twelve enterprise-level modernisation projects; Each has had its own unique challenges.
Technology modernisation involves replacing, updating, or extending an existing technology solution with a more performant system. The scope here can vary from a system re-architecture to creating a simpler process with modern solutions; there is no silver bullet approach.
Unsurprisingly, technology modernisation is a huge investment that virtually every industry makes every five years. In truth, technology modernisation within a business never ends. Still, organisations have more noticeable milestones, such as moving from a conventional HTML, CSS, or J-Query website to a modern front-end framework like React/NextJS.
Technology modernisation is an often overlooked necessity to stay on top of the latest technology advantages and competition; however, it is costly. So it’s always important to remember the ROI, but remember that it doesn’t always equate to fiscal value; time-saving and quality-of-life updates have an untold value that can’t always be factored into a financial report.
What are the challenges?
You’ve identified a bottleneck, process, or system that needs modernisation. You’ve done all your research and developed a sound proposal. Now it’s time to approach your CTO, right? Not so fast.
Before you do anything, you need to make sure you’ve covered your bases:
- What is the ripple effect of this technology choice?
- Who(s) job, if any, will this decision impact?
- What is the commercial opportunity or impact of this choice?
Ultimately, it boils down to the following: What is the benefit? What are the consequences?
Everyone knows stakeholder buy-in is essential, but the above is seldom considered. You have a better chance of landing your modernisation proposal if you think of the above so you can concisely outline the advantages, risks and consequences. This is because your CTO will need to speak to the CEO/CFO and other board members to convince them, so having this information outlined ahead of time will go a long way to progressing discussions and instilling in others that this isn’t a half-baked idea (which is the main thing you want to convey).
You must accept that your decision may have ramifications and lead to hard choices. While you should always do what is right, you must also accept the consequences of that choice, which is what being a technology leader is all about. Let’s look at an example from a previous company I worked at.
In a previous role, we modernised the way customer applications worked. Previously, when people applied to the business, their details were extracted onto large Excel sheets and various paper trails, which meant people had to be employed to verify and check the data.
This created a lot of time between application and acceptance, which was costly in addition to the resource allocation for customer onboarding. The solution was simple: automate and verify details on sign-up.
Implementing a new architecture and cloud infrastructure would allow us to achieve this within four months. However, this advancement meant eliminating twenty data input positions. This was the right decision for the long-term benefit of the business—the reduction of twenty jobs more than financed the new technology and enhanced the customer experience. Nonetheless, we needed to support those affected throughout the transition, acknowledging the personal impact of this change.
What leads to failure?
Aside from mismanagement of the modernisation project (a definite issue in which companies fail and result in failure modernisation efforts), other factors may impact the project and failure.
I previously spoke about stakeholder management and the investment of the idea; this issue can lead to failure, but outside of the C-suite, do you have your team brought into the idea? I’ve seen projects fail where the technology team can’t align with the solution; the product team does not agree with the priorities, engineers want to use a different architecture/technology etc. When I tell you to get stakeholder buy-in, I mean everyone.
Aligning on how to solve the issue is crucial. You can solve a problem with various technology solutions, but what makes the most sense? This can open a bag of worms people never consider because engineers are engineers. I’ve been on projects where you’re 50% of the way through a solution, and engineers want to flip the script, change the approach or re-do the entire idea. Everyone has an opinion, and I suggest you avoid being side-tracked.
Understanding your team's ability is also a consideration that often leads to failure; just because something can be done doesn’t mean it can be with your team. Does your team have the skillset or previous experience to do what you’re planning? For example, if you’re creating an AI language learning model for your company's data, does anyone on your team know how?
One of the biggest failures I’ve ever worked on here was a complete re-platform of an existing brand into a multi-tenant platformed brand. The business wanted to launch a new white-label service to competitors and utilise modern technology. The problem was that the teams and leadership had no idea of how to build what was itself a startup, as the white label was new to them.
Thus, teams worked in a waterfall way, and the modernisation effort failed.
What leads to success?
I’ve spoken to you about where it can go wrong, but what can you do to ensure your efforts succeed?
It comes down to planning, execution and reevaluation.
You must fully understand the problem, the business objectives, and the outcome. Many businesses built a substandard system several years ago because they rushed the process or did not fully understand the requirements. Therefore, it is critical to deep-dive into what needs to be changed and why.
Continuous communication and effective collaboration between all stakeholders, from the C-suite to the development team, are essential. Everyone involved needs to be on the same page regarding goals, timelines, and expectations. Regular updates and feedback loops help keep the project aligned with its objectives and adapt to any new challenges or insights.
Understanding potential risks and preparing mitigation strategies beforehand is vital. This includes technical risks, such as integration challenges and data migration issues, and operational risks, like resistance to change among staff or shifts in market conditions. Having contingency plans can help manage these risks without derailing the project.
Utilising the right technology and expertise is crucial. This might mean hiring external consultants specialising in modernisation or investing in training for your current team to upskill them. Choosing the right technological tools that align with your business needs and future growth can dramatically increase the chances of success.
Rather than a complete overhaul at once, breaking the project into manageable, incremental stages can allow for easier management and adjustment. This approach also allows for iterative testing and feedback, making it possible to refine and improve the process continuously.
Modernisation efforts should ultimately enhance user experience for internal staff or external customers. Regularly revisiting how the changes impact the end-user and ensuring the modernisation provides tangible improvements in their interaction with your company will contribute significantly to the project’s success.
Focusing on these areas can increase the likelihood that your technology modernisation efforts will be successful and sustainably deliver value to your organisation and its stakeholders.
