The Hidden People Costs of Legacy Systems
A move from a legacy software system to new technology can be an expensive proposition. The seduction of the new and shiny is inevitable … you think about how much better your operations will work, what kinds of reports you’ll get, and what experiences your accountholders will have that can make your community bank or credit union stand out.
Then sticker shock sets in, and you start thinking about the outlay of money. But are you really thinking about all the costs?
Intangible Costs You Haven’t Considered
Unlike personal purchases where we tend to take our own 360-degree view of tangible and intangible benefits and costs, financial institutions many times stop short in understanding all the costs associated with outdated technology. For example, much has been written about compliance, security and maintenance costs, but have you considered the people costs? Hidden costs that are not listed on the balance sheet can have a significant impact on your business.
Legacy Technology Isn’t Just in Banking
Recently, I was in a national big box home improvement store buying an entire appliance suite for my new home. I was in shock and disbelief as I watched the associate put my order into their system for purchase, delivery, and installation. This $70B company – that’s billion, with a B - had disparate systems that looked like early 1990s DOS-based technology: CRT screens, blinking cursor, terminal font, tab-tab-tab to the next field, and so on. I was so surprised that I asked the associate about it. As he was retyping my information into yet another system, he said, “Can you believe this is what we have to work on?”
How to Attract Major (and Minor) League Players
We all live in an app world, but the younger generations have never known a world without apps. They’ve grown up with the world at their fingertips on their personal device. Many have never walked into a bank, gone through a drive-through teller window, used cash for much of anything. Some have never endured the joys of haggling for a new car or hailing a taxi from the sidewalk. Theirs is a world of online shopping, coffee on the go, and a constant influx of stimulation from social media.
So it’s no wonder that during the interviewing and hiring process, they are accessing your technology as much as the salary you’re offering. Top talent is not attracted to a place with old technology. The major league players want the best of the best; the minor leaguers will settle for what’s available.
New, younger hires may not have the skills for working on systems developed in the 1990s or earlier, and they may not want to be trained on them. They know that learning the skills needed for old software won’t further their career outside of the organization. They are looking ahead.
Savvy workers want easy-to-use, intuitive and practical tools. If you want to attract and keep top-notch talent, you need top-notch IT solutions.
An Employees View of the Cost of Legacy Systems
According to a study by Microsoft, the average human being now has an attention span of eight seconds! And it is getting shorter. In 2000, our attention span averaged 12 seconds - a 33% decrease in 20 years.
Those that have been raised in the app world and are used to constant visual stimuli and distractions don’t have the patience to wait for answers that old technology provides. Legacy software can directly impede the younger generation’s:
- Job satisfaction
- Ability or desire to be trained (especially if on multiple, disparate systems)
- Error/entry rates
- Customer satisfaction/retention
- Brand awareness and advocacy
Your Technology Brand
Good employees need more than summer picnics and Christmas parties. They need the ability to work in an environment which is familiar, friendly, and speaks to their own way of living and learning. What is your technology brand … is it old and clunky, or sleek and seamless?