Legacy IT: Like a Horse on the Autobahn
I remember once seeing an old, black-and-white photo of a horse pulling an automobile.
The owner of the car gripped the horse’s reins, seemingly oblivious to the fact that he could have used the steering wheel. People stood along the sides of the road, watching him lurch past. The driver seemed to think everyone was admiring his shiny new car — but most of the onlookers appeared puzzled, likely wondering why the driver was plodding along using single horsepower instead of the dozens in his engine.
Here in 2017, many companies attempting digital transformation strategies are unwittingly re-enacting this scene. The driver in that photo relied on a horse even though he was literally sitting on superior technology — and likewise, too many of today’s enterprises cling to long-in-tooth business models instead of fully embracing what comes next.
These companies have often attempted to hire their way out of challenges — but increasing headcount won’t solve anything when what you actually need is a fundamental organizational overhaul. It’s like if the driver in the photo had added a second horse — or even a third, fourth, or fifth — instead of finally learning to drive.
Banking on the Wrong Horse: Organizational Silos and Monolithic IT
A couple years ago, I encountered a prime manifestation of this “car vs. horse” dilemma while visiting the CIO of a bank in Australia.
During our meeting, I listened as the bank’s technology teams explained that they didn’t need any help navigating the switch to the digital economy. The CIO then proudly showed me their new iPhone app. It was pretty decent for a first app — I’d seen much worse.
I complimented the CIO and his team on the nifty app and said I had just one little question.
“The iPhone has been out for seven years,” I said. “And you are just getting your first app out the door now? How can you tell me with a straight face that you are okay? This sounds very, very broken.”
Maybe I spoke a little harshly, but it was all in the spirit of helping them realize that even if they felt like they were speeding along in a shiny new automobile, they were really just plodding along behind a horse. Their organization contained abundant horsepower — most organizations do — but it was locked into silos that mirrored corporate budget codes. Each group tried to hire their way into agility and innovation, potentially adding a few horses to the stable but never transforming the business from “horse-pulled” to “engine-driven.”
“Out of your huge IT staff, how many are iOS programmers?” I asked.
The CIO shrugged. Not many. I didn’t need to ask about video game consoles, smart watches or any other modern form factor. The answer was obvious. The bank had an engine full of enterprise horsepower across its data and services — but it had never turned that engine on.
APIs: Shifting from Horse-Drawn Carriage to High-Speed Supercar
As I continued talking with the bank’s leaders, they began to recognize the scope of their challenges. Luckily, the conversations also helped them recognize possible solutions — namely, that to turn the engine on, they needed to put interfaces between all of the budget code-driven silos around the organization.
By interfaces, I’m talking about APIs. APIs are important because the goal of digital and connected business strategies isn’t merely to release an iPhone app. Rather, the goal is to deliver products and services wherever the end user is — when the user wants it, on the device the user prefers, and through whatever interaction model the user chooses. APIs facilitate this goal because they break complex enterprise systems into discrete services, enabling developers to create new digital products and services much more quickly.
Those complex legacy systems have typically led to slow development cycles because so many process were baked together. This limited developers’ ability to pull data across different silos, and meant that when developers tried to update one part of the system, they stood a good chance of unintentionally breaking a process somewhere else. By adopting an API-centric approach, in contrast, enterprises liberate developers from that old world complexity. Instead, developers become free to mix and match different services, using APIs like building blocks to quickly assemble new apps and services.
For the Australian bank execs, this awakening to APIs was a big shift. Fundamentally, they had been fooled into thinking that the old stuff was new stuff. They’d developed smartphone apps in the same way they’d developed internal enterprise apps, saddling shiny new technologies with antiquated techniques in the same way the driver from the photo sacrificed his vehicle’s speed by hitching the car to a horse.
By using APIs to create easily consumable layers of abstraction between parts of its organization, the bank was able to leave behind these old obstacles, and to start moving faster. Crucially, this transformation wasn’t just about internal productivity but also about extending the bank’s business to new partners.
By employing APIs to simplify on-boarding, for example, the bank gained all of the accumulated skills and experience of people outside of its organization — some of whom leveraged the bank’s APIs to build exquisite smart phone apps and game console apps and wearable device apps and…. You get the idea: The old horse-drawn IT model could never have accommodated this barrage of external contributors and was a thus a barrier between the bank and the network and platform strategies it hoped to achieve.
In short, by shifting from a legacy approach to an API-centric one, the Australian bank unleashed the horsepower of its organization plus the horsepower of experts from outside the organization. The bank’s leaders stopped confusing the old with the new and started moving like a sleek sports car into their digital future. Enterprises from all industries have much to learn from this example — chiefly that successful digital businesses don’t just release new apps and websites, and they don’t just port existing business models to new places. Rather, they embrace agility as a core strategic and operational principle.
[Looking for more insights about digital transformation? Check out Apigee’s resource hub here.]