The speed of change in multi-channel retail is exceptionally fluid and dynamic today. Few IT leaders have the in-house talent to build the bleeding-edge technologies that many digital initiatives require. To fill this gap, CIOs are increasingly looking to startups to help fuel innovation.
Legacy systems in organisation can breed 'legacy thinking' or the often heard view 'if it's not already in our systems, how do we bolt it on'. This isn't a criticism its more of a personal realistic observation based on many years of being called in to help understand 'transformation' delivery from a brand and people perspective.
My team and myself once built the UK's 5th largest e-mail marketing company, how we did it is for another blog, but it's highly relateable to the article in the link below.
The motivation came from utter frustration, around not being able to deliver a cost effective e-mail marketing platform in time to assist with migrating circa 2m customers from the offline space, onto our new eCommerce platforms for one of the UK's most successful 'Direct Home Shopping Company'.
Following numerous in-house long winded meetings with the IT team who were already busy keeping the IT lights on, then holding a beauty parade of existing ESP's (e-mail service providers) we worked out it was never going to be cost effective or feasible to deliver on the first phase of our 'transformation' strategy.
This is where we partnered with an innovative start-up software company who built what we wanted in exchange for a 3 year fixed price contract to use the system - a true win/win scenario.
The world of digital can be a veritable minefield, especially when your company is trying to keep up with all those trendy start-ups who seem to be nibbling away at your company with those bright ideas and agile innovative thinking.
Legacy systems are not just about technology, people have in-built legacy mindsets, and these mindsets always take an inside out approach which inevitably becomes the blocker to any real transformation or change.
This isn't business enablement, this isn't consumer centric, this really isn't transformation - it's being opportunity averse.
What do I mean by 'legacy thinking', well in simple terms I often see internal barriers created by an internalised thought process around incrementally layering things on top of legacy systems and legacy processes all in the hope it can make you more agile, reduce your cost, and possibly make you seem innovative in your customers mind.
Every company I have worked with have what's known as 'change makers', even in IT.....so my view is to enable them to work cross functionally to solve the problem, and if it can't be solved in a commercial and timely manner in-house then maybe you should ask them to to look at a few start-ups.
Sometimes working with a start-up can get you where you want to go a lot quicker, they're not constrained by your 'legacy mindset' they are not looking to take an incremental step to 'innovate' they might already have some great ideas, and in exchange for a mutually beneficial commercial relationship can get you where you want to be.
Ninety-five percent of large organizations with a structural innovation program invest in tech incubators, while 90 percent work with startups or niche vendors directly, according to Gartner research. And 84 percent of organizations acquire startups to bolster innovation.