As you can imagine, we frequently meet with companies that are looking to change systems.
Whilst the reasons vary greatly and outside of the nirvana of a “single customer view” (a topic in itself), one of the next most common reasons we hear is that the database marketing and analytical capabilities of the current system are limited relative to a company’s needs.
This is often the case with what are commonly termed legacy systems. These are systems implemented several or more years prior, for a specific purpose, quite often industry specific and they may even have some rudimentary marketing capability. However, the marketing functionality of these systems, if it exists, is often an adjunct to their primary purpose and was probably reasonable or even advanced when the system was first implemented. However, in this age of big data, data driven marketing, and mass personalisation, these systems fall short of modern management expectations and requirements.
The kind of systems I’m referring to typically include reservations systems, booking systems, or even sales orientated systems such as a CRM or loyalty management platforms. They often still do what they were designed to do reasonably well and, in many cases, have done so for a long period of time. They are however functionally stretched when it comes to leveraging the often-extensive and potentially profitable customer data they house. Given that the world of marketing evolves much faster than core business processes, this makes perfect sense.
Take the airline industry for example. It does essentially the same thing as it did back in the 1930s, and the automated systems deployed several decades ago still provide for that, but the marketing environment for airlines has changed beyond all recognition.
It’s not unrealistic to expect to get decades of use out of a core reservation or banking platform, whereas your direct mail tools might need changing every 5 years, and your social media tools need changing almost every year.
Investing in a platform that does “all of those things” potentially locks you into either massively over-investing in change management for the core business tasks, or massively under-investing in change management for the social tooling.
For instance, imagine if you built a reservation system around Facebook accounts… that's great, but now your target market has moved to Snapchat and TikTok (or whatever comes next), therefore you may need to go back and re-do everything.
So, it makes perfect sense to consider loosely coupled systems where the lifecycle of each one is based on how often it changes.
Enormous frustration from users and management is often based on what the legacy system can’t do well, often taking for granted the core functionality and level of operational entrenchment of the system within their organisation. This can often be the driver for replacing the entire system with a brand-new solution or “stack” via a major IT project. Is it worth it however and if so, over what time period will the company reap the riches and benefits of the new system?
A typical scenario from this point is to find a new “best of breed system that does it all”,“a one stop shop”, “single customer view”, “a single vendor stack” etc. and so ensues the often-costly hunt for a replacement. It’s not uncommon for the momentum to take on a such a project to be further fuelled by growing IT departments whose heads crave big projects, eager external consultants and aggressive vendors who are well versed in selling you your own dream.
But is it all really necessary and at what cost relative to the risks, business diversions and time involved? Whilst the price of replacing important production systems is often managed and analysed through lens of a competitive RFP process, and even if you manage the near impossible task of nailing the RFP quickly, the pre- and post-implementation business process re-engineering costs are almost always underestimated, if they are even calculated at all. Legacy systems are often far more entrenched in an organisation than companies expect hence replacing them is almost always under estimated in terms of business disruption and true cost. Legacy systems are often replaced by new systems that require some form of functionality or process compromise that also wasn’t anticipated.
It is this change management aspect as much as any technical aspect that can determine how successful a new system implementation will be and what the true ROI of the replacement is. Again, is it worth the risk? Did you need to completely abandon the legacy system to achieve what you needed to achieve?
Furthermore, whilst prior to receiving approval to implement a new system, many companies will prepare detailed budget proposals, far less time is spent analysing the actual post implementation ROI and opportunity cost of potential alternatives. What is the true ROI of the project versus the risk undertaken relative to the alternatives? Given the management team could have changed by the time the new system is implemented and, no one in the company remembers the rationale for the project in the first place, arguably the horse has bolted so there’s probably little point.
So, what’s the alternative? Well there are many of course. For example, sometimes simply spending more on sales and marketing may produce a better ROI than implementing a new ‘super system’ no matter how good it is. From a systems perspective however, if the main issue with your system is lack of digital marketing capability and related insights, then consider just replacing that component of your stack with a specialist digital or marketing automation platform (“marketing platform”). This is often a much faster solution to deploy with less risk, less cost and business disruption. Additionally, most specialty marketing platforms can be implemented as stand-alone options initially with integration to the legacy system able to be completed progressively over time rather than from day one, further minimising risk and business interruption, whilst maximising short term ROI.
If your legacy system still does what you need it to do and is still supported in the market, then possibly the most important consideration in being able to supplement its capability with an external marketing platform is the ability to access its data. Some legacy systems however were not designed to play well with other systems. They can be great at capturing, securing, storing and using data for the systems primary purpose but are limited in their ability to make that data accessible to external systems, they weren’t intended to, so they may not have standard API’s for instance. That however isn’t necessarily a significant limitation in being able to link to external platforms. There are many other options that allow you to make data externally accessible. Other options that can be used either individually or in combination with each other include integration methods such as database replication, database read only access, manual or automated batch file extracts, SFTP transfers and in some cases even intelligent forms of screen scraping can be used to access data externally. If you can get the data out in a consistent form, a good enterprise level digital marketing platform should be able to import, parse and action it relatively easily. Depending on ability of the legacy system to import data, you can then look at requirements around system synchronisation as enterprise level digital marketing platforms usually have no problem in passing data back.
Generally speaking, for marketing purposes, the more granular level of data you can extract from your legacy system the better. Modern digital marketing platforms are constantly improving and simplifying features around import logic, personalisation, conditional logic, segmentation and analytics and can therefore assume the heavy lifting in these areas, leaving your legacy system to concentrate on its core functionality.
Aside from efficient and secure sharing of customer data between systems, dispersed user credentials management can also be a potential operational issue for some companies when using different systems from specialist vendors. However, the rapid acceptance and proliferation of Single Sign On (SSO) technologies, has dramatically simplified this issue. SSO enables the centralising of system credentials authorisation and access. With SSO in place, IT and Compliance departments are able to maintain central user management governance and control whilst enabling marketers to get the appropriate system they need to execute their strategies.
What we commonly see when this is all done well, is that post implementation and system integration, the reliance on the IT departments by Marketing departments is far less than when a “one stop shop” (which it rarely is) solution is implemented. That’s because increasingly, Digital marketing platforms are designed to be operated by marketers, or at least they should be, which means marketing automation programs, campaigns and initiatives aren’t limited by the availability and access to IT or other technical resources.
Whilst there’s no doubt that many once state of the art systems come to the end of the life cycle and need to be replaced, this is not always necessary. Many are replaced whilst still being underutilised. The retention of the legacy system supplemented by complimentary technologies should always be considered as an option in any genuine system upgrade or digital transformation proposal. Needless to say, the ROI of all options has to stack up and whilst that sounds self-evident, you’d be surprised how often it isn’t. The replacement project process itself can often simply take over, becoming a means to its own end.