Core Software: Superhero or problem child for your business?
It's a different story when it comes to core process software, meaning processes that are critical for one’s business. These need to work reliable at all times. If, for instance, a retail chain can no longer sell its items because the merchandise management system behind them no longer delivers the correct prices to the cash register system, the company is facing massive losses.
Regardless of the industry, advancing digitalisation of products and the provision of digital services for customers, companies face worrisome challenges in the context of the associated, necessary end-to-end digitalisation of processes along the product creation / service provision chain if core software systems are no longer up to date. At some time, they will reach the point where they are required to make a larger step to modernise or update a core system to turn a problem child into a superhero for their business.
Core Software Revival: Modernising your core systems
What do we mean when we talk about core software? Core software are software systems that support a company's critical core processes. In practice, however, the term can include more than that. Depending on the company and its size, the term core software can be defined differently. Even though human resources is not a classic core process, a crash of the central HR Department software would be fatal for a corporation employing thousands of staff, while software support downtimes would usually not be a big deal for smaller companies with 100 employees. Therefore, core software can also be software that is of central importance for processing in individual technical departments.
Core software systems are the backbone of every company. Outdated ones hamper your business’s competitiveness and innovative strength, harbouring high entrepreneurial risk. That's why they need to be updated and the process is known as Core Software Revival.
Is your company affected? Find out!
Of course you, dear reader, would like to know if your own company is affected by the topic of Core Software Revival and if it is worth reading the rest of this blog. Now I will ask you a few questions that will help you find a an answer to this question.
Let's start with questions for your technical department:
Do your legacy systems support the growth and scalability of your business?
Especially when it comes to older software, quickly adapting to new business cases can turn into a challenge. Whenever adaptation requires very long lead and development times, this can be a good indication that the application has been implemented on a software basis that is difficult to maintain and has grown over the years. If your core applications are slowing down the digital transformation of your company, thus hindering the growth of your business, for example by preventing the introduction of innovative, digital products and services and the associated new revenue streams and digital business models, action needs to be taken.
Do your legacy systems allow for fully digital customer services?
Digital services for customers are more and more important in today's business world. Customers expect increasingly quicker, more innovative services that offer additional value and the option of digitally accessing and using information and services at any time and anywhere. This requires fast services to be launched quickly. Difficulties in launching digital services or being able to bring information previously only used by employees into modern web interfaces or apps in a way that is suitable for customers can also be an indicator that the software is based on a technology stack that is no longer up to date and needs to be partially updated.
Do your systems support an efficient work style?
Systems that become a burden to your staff (especially if the reasons are the need to enter data several times and a lack of automation) instead of supporting employees with their daily work are most often an indication for outdated software. In IT systems along the core processes, loads of data is created across department borders, data that companies would like to use for business decisions in a partially automated or AI-supported way. If your systems don't allow for simple use of this data in the technical departments, this also points to outdated software. Training new employees on existing software system taking a long time can become a challenge for companies on today's swiftly changing labour market. Old core systems can be identified quickly if the user interface is counter-intuitive and less than quick to use. This is why it pays off to invest in modernisation in this field. However, it needs to be analysed in advance whether partial renewal in form of a façade in front of the existing system or a larger renewal process is required in order to not end up with a rusty, broken old car that was only beautified with a few decals.
Other questions for the IT department quickly show whether the company is struggling with software systems that have become long in the tooth:
Are your systems causing disproportionately high costs compared to their value for the business?
The answer to this question particularly quickly shows whether the cost/value ratio is still right. Many older software and hardware systems eat up lots of money in licence fees and maintenance or require specially trained employees or specific technical knowledge that is also worth considerable amounts of money. This quickly leads us to the next question:
Do your core systems still match your current IT strategy?
Forming a link between your corporate strategy and operative IT management, your IT strategy makes sure that IT systems and infrastructure optimally support your current and future business processes. Outdated software systems often no longer meet these requirements and rather hinder than support your business. If you are using such legacy software that doesn’t match your current IT strategy and orientation (be it a cloud strategy or cloud-first approach, or even a streamlining of your systems or company-wide use of data exchange platforms) this is a clear indicator that action is required. Especially if we're talking about software that supports processes that are critical to your business. Not to mention software systems that open up IT security gaps and endangering the company in the process.
Are your systems capable of keeping up with increasing security requirements?
This question, in turn, results in additional questions: Is your software difficult to maintain? Is there only a small number of employees that can support the application? Will it be difficult to adapt the software if worse comes to worst? - If you have answered only one of these questions with ‘yes’, urgent action is required. And we haven’t even asked the most important question: Are you using technologies or software libraries that have not been maintained by their manufacturers in years?
If you have answered ‘yes’ to this question, it's worth reading our next Blog entry which specifically deals with the challenges and risks of Core Software Revivals but also the correct procedure to implement them professionally.
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