Three themes are dominating IT service providers’ go-to-market messaging in 2015: digital, Cloud, and automation, but their trump card, legacy, is absent.
As fast as Cloud is maturing, digitisation is reaching the peak of expectation, and both are in demand from customers who need help deploying the same technological solutions that younger, leaner competitors are using to attract new customers.
“Automation is intrinsic to Cloud platforms, but the challenge for outsourcers is how to automate legacy systems and processes,” claims Ian Brown, research analyst, Ovum.
“The last remaining dollars are being squeezed out of labor arbitrage, so the race is on to automate and maintain offshore’s cost advantages.
“ITO and BPO providers cannot sustain the growth levels of the past, unless they adapt to the new normal, but their greatest value to most large enterprises will be helping them to tame the legacy challenge.”
Disappointingly, however, Brown believes that few SIs have so far managed to offer a joined-up story about how they bridge the chasm between the digital front-office, legacy systems, and back-office processes.
“There is an over-emphasis on the digital and not enough emphasis on how digital fits into and interacts with legacy IT and processes,” Brown adds.
“Too often, digital projects risk failure because back-office systems and processes cannot cope, and can compromise the digital “customer experience”, and the money isn’t there to invest in the back office.”
Consequently, Brown believes businesses need to take a strategic approach to digital and bring all the business stakeholders (including IT) together to understand their dependencies.
“This is where SIs can and should help with planning,” Brown adds. “Full-scale heterogeneous legacy systems automation is still some years away for most enterprises.
“Pockets of automation may exist around individual platforms and applications, but business processes span the IT landscape and it is the challenge of integrating and automating the underlying operations from the digital front end to the legacy back office that currently exercises the SIs.”
However, whether focusing on digital, Cloud, or process automation, Brown believes the SIs’ real value lies in integrating and managing new-generation third-party services and platforms with legacy and “modernised legacy” systems to support end-to-end business processes.
“Few service providers seem to want to talk about legacy, but maintaining and modernising legacy systems will be a necessary accompaniment to service integration and management in the delivery of digital services to large enterprises,” Brown adds.
“You can’t separate the old from the new.”