Managing Complexity – Living with Legacy Systems

by Mercator Advisory Group 0

For as long as anyone can remember, the financial technology world has had to get to grips with the problems caused by the plethora of legacy systems in use in most organisations.

Banks have always been heavy users of technology, but they are also strong believers in the old maxim, “if it ain’t broke, don’t fix it”. The result is that most organisations have a raft of systems held together by sealing wax and string.

In the recent Banking Technology Awards, the trophy for Best Use of IT in Retail Banking was picked up by Metro Bank, the new kids on the block in the UK. While one member of the judging panel declared that he was impressed by the “simplicity and rigour” of Metro’s approach, others were less sure: they’ve just gone out and bought a load of off-the-shelf software, said another judge.

Exactly – Metro has pretty much gone down the packaged software route 100%, and why wouldn’t it? Anyone setting up a similar organisation would surely do the same.

While many words have been written about the trials and problems of living with legacy systems, the tide seems to be turning, with a number of new approaches and technologies bringing hope that the ancient thickets can at last be cleared out.

The first is cloud computing. This is making it possible for developers to quickly prototype new systems in the cloud without having to decommission the existing systems. Such a sand-box development approach removes one of the major risks in legacy replacement -there are so many complex dependencies in modern systems that taking out one part of a system will almost certainly have unexpected consequences somewhere down the road.

A second shift is that people no longer talk aggressively about Legacy Replacement – over the last year or so, white papers from large IT vendors like IBM, HP and Oracle have started to talk instead about Application Modernisation. It may just be a change of words, but somehow it sounds more achievable.

As financial institutions look for ways to improve processes and wreak efficiencies out of their organizations, they tend to overlook the elephant in the room – legacy systems replacements. This is because such replacements are resource-intensive, and can take years to fully implement. With the advent of more hosted solutions and cloud-based systems, however, it may be possible to evaluate a modular approach, and review solutions that can be implemented in phases (in a self-contained and discrete manner) as opposed to a rip-and-replace approach.

Read full article: http://www.bankingtech.com/bankingte…e9bde7e866d022