Governments worldwide dedicate a significant portion of their IT budget to maintaining legacy technology systems. This can pose security and operational continuity challenges and governments seek to address this challenge.
For example, the cost to the UK government of maintaining legacy IT is estimated to be around 50 percent (or £2.3 billion) of its current IT spending. The UK government’s Roadmap for digital and data 2022-2025 acknowledges the challenge that legacy IT poses.
Amazon Web Services (AWS) public sector government transformation specialists researched what technology leaders in government and in the highly regulated private sector believe their main IT challenges are. There were interviews with senior executives from nine UK government departments as well as 16 CIOs or CTOs of Fortune 500 companies in heavily regulated industries like finance. This qualitative research was further validated through quantitative studies across Germany, Spain, and Poland, drawing on a sample size of 512 participants to ensure cross-market relevance and applicability. This post summarizes the insights and suggests four approaches to consider.
Factors that shape legacy IT
Whether in the private or public sector, legacy modernisation is challenging for organisations that have a long operating history reliant on in-house systems and applications. In the 1980s and 1990s, a lack of appropriate IT solutions meant they developed bespoke software and systems on mainframe platforms to manage their core business. These systems also became integral to managing aspects such as business processes, security protocols, and legislative changes, often without comprehensive documentation. This made it challenging for these organisations to modernise because of the implied threat to business continuity.
Government and private sector organisations have recently recognised the shift of IT from a support role to a driver and facilitator for secure, efficient, data-driven, and innovative operations. However, in the private sector the CEO typically owns the technology vision whereas in government organisations, CIOs and CTOs must secure buy-in and funding from various departments to drive the technology strategy forward. This impacts the priority status of legacy IT remediation efforts.
Four blockers to legacy IT exit
- Moving targets – Government agencies and private sector companies operating in highly regulated industries face regular legislative changes. They must prioritise compliance requirements, even during the process of modernisation. Implementing these changes can impact their systems and lead to the accumulation of technical debt. As a result, plans require continuous adjustments. As one private sector leader stated: “Timing matters greatly … if a regulatory change hits your unmodernized system when you’re modernizing it, you can’t complete on time. That sets your modernization back because you’re now modernizing something different.”
- Diverse business practices and needs – In government departments, technology solution development driven by ad-hoc requests from business partners to align with their specific processes and legislative requirements can lead to multiple versions that address the same outcome. This leads to inefficient use of resource and makes it challenging to scale remediation efforts. As one government leader stated: “We try to build shared products that can support multiple services… I am not convinced that we do that very well. …we can invest in common elements and try to reuse them…. we do try to reuse as much as possible, but it’s really hard because it requires careful architecture.” On the other hand, in heavily regulated private sectors, organisations enforce the adoption of standardised business processes, solutions, and documentation, and so can achieve scale in their modernisation efforts.
- Potential risks of system gaps – Legacy systems can be opaque and the business rules ingrained within them are largely undocumented. There is uncertainty about whether these systems will function in the same way on the new platform and this poses a significant risk to business continuity. These factors act as blockers to modernisation. As one government leader stated: “Ensuring a smooth transition is a major challenge because legacy systems are very complicated and have complex dependencies and they are not documented.”
- Attracting and retaining technology talent – Government organizations face difficulties in attracting and retaining technology talent. This challenges their ability to resource work on legacy remediation efforts. In addition, mainframe system modernisation requires talent with specialised skillsets that are scarce. As one government leader stated: “The people with the skills or even with the desire to learn the skills involved in either supporting or building these legacy platforms, or even delving into the codes and analysing how they work, are dwindling… these are the things that are not easy to find skills in the market for. … … some of the experts we have are in their 70s.”
Four approaches to tackle legacy IT
While there are no simple solutions, the research points to four overarching approaches that can help governments tackle legacy modernisation more effectively.
- Reframe legacy IT – As an organisational challenge, rather than a technology problem, senior leadership is responsible for the vision and can help secure resources, talent, and ongoing commitment.
- Implement standardisation – Standardised business processes, solutions, and documentation can enhance resource management and modernisation efforts, reduce risks, and improve scalability.
- Establish accountability mechanisms – Mechanisms designed to monitor modernisation progress and associated expenditure can hold the organisation accountable, even when leadership or policy changes are frequent.
- Leverage experts and AI solutions – Experts can help organisations make trade-offs based on their priorities to develop the best strategy. Additionally, they can advise on AI solutions that can augment modernization efforts, thereby accelerating and scaling the efforts.
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