Legacy data management vendors: You’re fired!

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trump-youre-fired Insurgent software vendors are using both new technology and fresh thinking to disrupt legacy data management vendors. The 2008 crisis was more than a just a big credit squeeze that led to a horrible recession – it was a watershed.

In the 1990s and 2000s it was the norm. Eye-popping costs for inflexible software licences, implementation projects that chewed through hundreds or even thousands of man days. Customers either swallowed the cost or were forced to build out their own data management infrastructure. Nobody seriously considered managed service options because options were limited. Toolkits ruled the day.  Salespeople touted “extreme” customisation potential, after all, no two financial services firms are the same, right? Really? Is that true? Or are many actually substantially similar? Exactly how many man days were spent on getting a base install up and running or derivative features that are only marginally different from those implemented by the same vendor elsewhere? How much re-inventing the wheel was being paid for and by comparison how much expensive effort was delivering genuine competitive advantage?

If we approach data management as an exercise in data transit, rather than as about crafting a custom-made data warehouse, the solution can achieve competitive advantage via custom features on top of a common engine. The heavy lifting gets done by an engine that moves data from A to B that is exactly the same in all implementations. En-route between A and B, custom functions can be applied to the data that your competitors may not be doing, but the core is the same and optimised. The data model can be shipped ready to go and then an implementation consultant can spend a minimum amount of time tweaking it to custom requirements instead of either starting with a blank sheet every time, or worse, trying to shoe everything into a one-size-fits-all container.

Post-crisis, two things changed. Firstly, IT budgets were initially frozen, projects deferred and then when the dust settled, they were re-sorted with regulatory demands at the top and completely re-rated for available spend. Budgets shrank.  Very suddenly, IT had to do more with less. Competitive advantage by innovation took a back seat and operational efficiencies and regulatory readiness took pole position. Of those projects given the green light, 40% were addressing regulation rather than business as usual or new products. Secondly, as if this re-rating was not bad enough for the increasingly irrelevant and inflexible legacy vendors (you know who you are!) customers started to ask about managed services. How were legacy vendors supposed to take their toolkits and repurpose them as in-cloud platforms on which to run services? The answer is, for most, they failed. The real question is, were customers asking about moving their data operations to a managed service because they really wanted their operational data moved offshore to another country, run by others, or placed in the cloud? Or, much more likely, were they screaming out for a less heavyweight and more flexible option with their on-premises software?

Rather than explore outsourcing and risk that ending in tears, we suggest a better way. One that puts operational efficiencies first and comes out of the box with lots of pre-configured functionality.

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