The Bigger They Are, The Harder They Upgrade

I read a news story a while ago about the woefully outdated technology underpinning the US military's nuclear arsenal. The system that coordinates the US nuclear forces, including missiles and bombers, runs on a IBM Series/1 computer and 8-inch floppy disks: both relics of the 1970's, according to the Government Accountability Office.
As shocking as this is, the US government is not alone. Many of the largest businesses are similarly running on outdated technology with skyrocketing maintenance costs, and unlike the US military they don't have any good excuse to not upgrade.

The US military makes several good points on why they don't upgrade their systems.

• One, the current system fulfills all the needs of the organization: indeed the state of nuclear warfare hasn't seen much change since the end of the Cold War.
• Second, the military's systems are air-gapped from the Internet, so patching vulnerabilities is less of a worry.
• Third, the military isn't at a competitive disadvantage because of its IT, simply b/c the US military doesn't have much competition.

Now lets look at private companies. Some of them run their backend processes with applications written in languages like COBOL, running on top of mainframe machines. Email is still a locally hosted database requiring Intranet access and a heavy desktop client.

• As their businesses have been transformed in the past 40 years their IT is barely keeping up. The frustration with legacy technology is a common meme with office workers, and therefore it can hardly be argued that such technology meets the needs of its users.
• Unlike the nuclear launch systems of our military, virtually no company has an "air-gapped" network: internal systems can often be accessed by employees around the world via VPN. Third parties and suppliers are given access to certain systems to better perform their jobs. This allows companies to increase productivity at the cost of increased security risk.
• Every private corporation is struggling to survive in a competitive market where the latest in IT give firms a competitive advantage in product development, operations, sales, and recruiting. Having legacy technology can have a detrimental effect on business performance, particularly with a younger generation that has grown up with technology that "just works" such as GMail, Dropbox, Mac OSX, and iPhones.

So where won't you see legacy technology? In my experience, startups tend to be the most successful in leveraging the latest innovations in IT due to their smaller size, less compliance red-tape, and off-the-shelf strategy.

Smaller Size

Its much easier to implement new technology with a small number of employees. Larger organizations, however, can mimic the power of smaller organizations by allowing more IT autonomy within its divisions. Technology could be implemented faster if it is implemented among fewer people, and by allowing each division to make its own IT decisions, they can better adapt to their own needs. Of course, their is a risk cros-division communication will suffer because of IT incompatibilities. It will be the role of the main IT department to ensure the authorities given to divisions do not result in incompatibility.

Red-Tape

The fact that IT in smaller organizations are less restricted by internal compliance is not necessarily a good thing, as a lack of IT compliance can lead to serious legal consequences. Forever 21 was sued in 2015 for pirating Adobe Photoshop, an allegation that, if true, would almost certainly have involved the company's IT department.
However not all compliance measures are good and some need to be re-considered in light of the effects on productivity. Again the solution may be to give a company's internal divisions more IT autonomy to make upgrading faster. Also, companies should beta-test new technology to expedite the process.

Off-the-shelf strategy

Larger corporations tend to use IT solutions that are customized to that company's needs. A custom solution, while it may fit all the needs of the organization now, will be expensive to upgrade and often becomes a bottleneck in the future as the organization's needs change. A small company doesn't have the resources to custom order a solution that fits all the company's needs, so they make do with a product that may fullfill 80% of the requirements and change their processes to work around limitations. In the long term however, this gives the same organization the savings and flexibility to implement up-to-date solutions as they mature and become commonplace. Companies that never had email suddenly moved to web-based email, while corporations who had email long ago are struggling to migrate their legacy on-premise email services to the cloud. Large corporations should consider a conservative IT strategy that focuses on deploying wide-usage, affordable, off-the-shelf solutions whenever possible and save the IT budget for custom solutions only when absolutely necessary.

By learning from smaller organizations, large company IT departments can move more nimbly to keep up with the latest in IT trends, as well improve employee satisfaction and productivity.