By Fernando Menchini, Solutions Manager at Software AG
Many companies with which we interact today were born in the era of rapid technological innovation: their business is based on applications, efficient processes, low operating costs, they respond quickly and are able to understand the behavior of customers and, in addition, they adapt with great agility to their needs. The ventures – in some cases, called “start-ups” – focused on service are the ones that stand out the most and we don’t even realize how common it is to order food, taxi, book a hotel and even acquire a credit card with just a few clicks. .
But our day-to-day is not only made of news. We still keep in close contact with companies that, even trying to fit into this world, have a high operating cost and coexist with old technologies, which cannot simply be turned off or replaced.
An example is the companies in the financial market, which, although living with a legacy, have another outstanding characteristic: the ability to invest to innovate. Our banking system is one of the most developed in the world and, like few others, follows the behavior of the new generation of technology. There are numerous mobile applications, a wide range of services and differentiated forms of service that improve the experience and even build customer loyalty. Can this capability be easily identified, or have you not carried out any transactions today through your mobile app or internet banking?
How long will this be new? We know that innovating in an increasingly agile way is necessary, but also ensuring the security and stability of the services provided. For this reason, care for the old environment is essential. Banks have a large legacy system, robust software that supports their transactions; they are the true backbones of the business and any new application has a direct impact on its operation.
Even with the brutal growth of apps, we still haven't seen the full potential that these services can offer us. This can create threats for large institutions. What will their positioning be? Today, there are cases where – despite all the investment in technology – the decisions of these financial institutions are made on the basis of standardized policies, applied equally to all customers. This practice seems astonishing if we consider that technological advances make the opposite possible: that these banking institutions have access, through social networks or within their own databases, to the consumption behavior of customers, in order to offer products in a more efficient way. more personalized. This paradox occurs precisely because of the lack of capacity for rapid adaptation and the absence of mechanisms that give visibility to the impact of these innovations in the bank's technologies.
In order to avoid problems generated by this impact and service interruptions, it is necessary, first of all, to have full visibility of this universe. The new application needs to integrate seamlessly – and quickly – with existing ones. More than that, it needs to be developed with a view to the platform on which it will be implemented, which operations it will operate on, which customers it will reach and what differential it will give to the business. All these ends need to be tightly tied together for the investment in a new app or functionality to make sense.
Great applications can be developed very quickly, however they are not always properly introduced in a complex environment or designed considering innovative and creative processes. When any problem brings down a banking system, for example, it stops carrying out transactions and generates significant financial losses that are not always considered. Therefore, clarity and knowledge of the environment are essential for the CIO to achieve a perfect harmony between the current innovation, the one that is coming, the legacy that will continue to exist and even the potential to replace this legacy that results in significant cost and risk reductions. .
There are several risks inherent to innovation, but just as a building cannot resist without a good foundation, a legacy system needs a well-established architecture with transparency and preparedness to support the new. This is the starting point for the success of any technology that aims to modernize and bring competitive advantages to organizations.
But our day-to-day is not only made of news. We still keep in close contact with companies that, even trying to fit into this world, have a high operating cost and coexist with old technologies, which cannot simply be turned off or replaced.
An example is the companies in the financial market, which, although living with a legacy, have another outstanding characteristic: the ability to invest to innovate. Our banking system is one of the most developed in the world and, like few others, follows the behavior of the new generation of technology. There are numerous mobile applications, a wide range of services and differentiated forms of service that improve the experience and even build customer loyalty. Can this capability be easily identified, or have you not carried out any transactions today through your mobile app or internet banking?
How long will this be new? We know that innovating in an increasingly agile way is necessary, but also ensuring the security and stability of the services provided. For this reason, care for the old environment is essential. Banks have a large legacy system, robust software that supports their transactions; they are the true backbones of the business and any new application has a direct impact on its operation.
Even with the brutal growth of apps, we still haven't seen the full potential that these services can offer us. This can create threats for large institutions. What will their positioning be? Today, there are cases where – despite all the investment in technology – the decisions of these financial institutions are made on the basis of standardized policies, applied equally to all customers. This practice seems astonishing if we consider that technological advances make the opposite possible: that these banking institutions have access, through social networks or within their own databases, to the consumption behavior of customers, in order to offer products in a more efficient way. more personalized. This paradox occurs precisely because of the lack of capacity for rapid adaptation and the absence of mechanisms that give visibility to the impact of these innovations in the bank's technologies.
In order to avoid problems generated by this impact and service interruptions, it is necessary, first of all, to have full visibility of this universe. The new application needs to integrate seamlessly – and quickly – with existing ones. More than that, it needs to be developed with a view to the platform on which it will be implemented, which operations it will operate on, which customers it will reach and what differential it will give to the business. All these ends need to be tightly tied together for the investment in a new app or functionality to make sense.
Great applications can be developed very quickly, however they are not always properly introduced in a complex environment or designed considering innovative and creative processes. When any problem brings down a banking system, for example, it stops carrying out transactions and generates significant financial losses that are not always considered. Therefore, clarity and knowledge of the environment are essential for the CIO to achieve a perfect harmony between the current innovation, the one that is coming, the legacy that will continue to exist and even the potential to replace this legacy that results in significant cost and risk reductions. .
There are several risks inherent to innovation, but just as a building cannot resist without a good foundation, a legacy system needs a well-established architecture with transparency and preparedness to support the new. This is the starting point for the success of any technology that aims to modernize and bring competitive advantages to organizations.
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