PwC: Approaching Legacy as more than just a technology challenge
Guest blog by Matt Hunt, PwC Director, Government and Health. As part of the Digital Transformation In the Public Sector Week. #techUKDigitalPS.
Significant strides have been made in recent years in the creation of new digital front-end services that improve both the citizen experience and efficiency in delivery of those services.
These new services, however, often sit on top of complex and inflexible legacy technology that cannot easily be replaced by departments. Addressing this legacy IT challenge is critical to providing future proof and cost-effective public facing Government Services that will unlock the full benefits of the next wave of digital transformation.
How have we got here?
To understand how to address legacy systems it is useful to frame how these systems evolved to where they are today. Many of the government's core systems were developed and implemented as part of large outsourcing contracts. The system of record backbone of the department was typically architected through a waterfall approach to be robust, reliable and have infrequent releases. They were generally large, complex, long term delivery projects with significant capital expenditure and typically required a minimum of a 5-year service charge commitment. The systems were costly to run and maintain as they relied on proprietary technologies, on-premise hosting and bespoke support; there was little cost baked into the service charge for change and continuous improvement. Once committed to the service, departments were investing in the suppliers as well as the systems.
As departments’ IT functions came under increasing pressure to reduce IT expenditure, many of these large outsourcing contracts were renegotiated to remove further costs and reduce the commitment term. The government insource and outsource cycles shortened and departments were challenged with disaggregating their IT contracts. Meanwhile the pace of technological change accelerated with the skills, knowledge, and technology to support these legacy systems diminishing. This has resulted in limited capabilities to support these systems whilst also requiring significant investment to modernise.
This said, the government is not the only sector to have been impacted by this. The financial services industry and its core banking systems are also largely based on legacy technologies. In many cases the power of their data and functionality has been unlocked through Open Banking. Through modernisation and exposing open APIs, third parties and FinTechs have been developing new applications and services that have invigorated the marketplace. A similar paradigm shift is needed in the public sector to build out platforms that are secure but also able to share data intelligently across Government departments.
Addressing Legacy Holistically
Addressing legacy IT should be viewed as more than just a standalone technology challenge; it should be objectively understood as part of the holistic business, financial and commercial imperatives of each department through several lenses. These include, amongst others, citizen expectations, how legacy remediation fits with the existing change portfolio, security and regulatory requirements, contractual considerations, and mastery of data across the organisation.
This holistic view will drive the understanding of the range of options and trade-offs available whilst also identifying opportunities for departments, suppliers, SMEs and third parties to innovate and unlock value held in these legacy IT systems in new ways. This is critical to identifying, securing, and managing investment to address legacy.
Ultimately there is no silver bullet. By understanding the problem through the right lenses though, the challenges to each department can be properly understood and the optimal resolution put in place.
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Matt Hunt, PwC Director, Government and Health holds an exceptional track record in shaping and leading work in large, complex business transformations. Matt has extensive experience across the complete end-to-end lifecycle from initial business case development through to strategic design, procurement, delivery and post-go-live support. He has also undertaken a number of key roles on both the supplier side and client side. Connect with Matt, to learn more.
To learn more about PwC, please visit their LinkedIn and Twitter.
On Tuesday 5 April, techUK was delighted to host the Cabinet Office and industry representatives for the launch event for the UK Government’s Digital, Data and Technology Sourcing Playbook which was published on 28 March 2022. The DDaT Sourcing Playbook sets out guidance – in one place – as to how digital projects and programmes are assessed, procured and delivered in central government departments, arms-length bodies and the wider public sector. Through the application of what is commercial best practice, the Playbook addresses 11 key policies and six cross-cutting priorities that will ensure government gets things right from the start when it comes to procurement.
You can watch the recording of the launch event in full here:
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