Digital Disruption Legacy Businesses

Why Digital Disruption Doesn’t Spell Trouble for Legacy Businesses

IN-COMLegacy Systems

Digital disruption is not a one-off event or short-term challenge. Instead, it’s a fact of life that executives have to confront on an ongoing basis. According to an Accenture report, 93% of business leaders expect some form of disruption in their industry over the next five years. However, disruptive technology doesn’t necessarily spell doom for legacy businesses.

There are several ways to react to and overcome disruption in your industry. You could ignore the threat it poses to your current business model. Or, you may try to fight it.

However, the real leaders embrace new technology and the revenue growth opportunities it presents. Typical survivors strategize to adopt the transformation that emerging technology imposes on ways of doing business.

The good news is that modernizing legacy applications doesn’t necessarily mean adopting radical technological changes overnight.

Disruption is Predictable; Take Advantage of That.

New and advanced technology doesn’t just come up at once. Usually, its emergence and adoption across different industries follows a predictable pattern. It gives you time to assess possible ramifications for your industry, enabling you to craft a strategy to embrace it.

Take the example of blockchain networks, which have numerous practical applications, such as record keeping as well as secure and transparent data exchange and financial transactions. The tech provides a peer-to-peer network with decentralized digital ledgers for storing all transactional information. Banks, hospitals, real estate firms, and e-commerce platforms are some of the enterprises that can extract differentiation benefits from the technology.

However, blockchain is still a work in progress, and before it can become a business survival factor, you have time to strategize as you observe its growing adoption in your industry. You may want to follow the development of best practices, standards, and specifications for implementing the technology.

Will you need to overhaul your existing legacy infrastructure, or is it viable to integrate the tech with current systems? You’ll get answers to these questions as the adoption of blockchain broadens, with enough players leveraging the same blockchain infrastructure or inter-operable platforms.

Strategize to Harness New Tech Opportunities and Beneficial Features.

Most disruptive technologies outlive their legacy alternatives because they offer practical benefits to businesses. As such, it doesn’t make sense to fight disruption that addresses critical pain points that traditional systems have failed to fix time and again.

Consider big data or even artificial intelligence, for example. AI can help banks comply with regulations, such as anti-money laundering and know your customer (KYC) laws. With the technology, financial institutions can analyze customer data and behavior, helping detect and potentially stop fraudulent or illegal transactions. Violating regulations can result in hefty penalties, so it’s in the best interests of banks to utilize technology that can help with compliance.

Here’s how you may strategize to seize the perks and opportunities that disruptive solutions bring:

1. Evaluate the Potential Impact of the Proposed Solutions

Some level of change is necessary for you to embrace disruption. The big question is—how will the proposed technological transformation impact your organization? Identify processes, tasks, and functions that have to change. Be sure to measure the magnitude of each potential disruption.

A comprehensive impact analysis will provide in-depth insights into what lies ahead over the project lifecycle. It helps to understand what it’ll take or cost to implement the necessary technological transformation. In the end, you can foresee and avoid potential bottlenecks.

2. Adopt New Tech at a Measured Pace

At what speed is it viable to transform? You don’t have to go the whole hog right away. Incremental tech adoption provides a sustainable balance between legacy processes and what it’ll cost to embrace disruption successfully.

Modernizing legacy applications and systems at a measured pace helps you retain competitiveness as you innovate toward measuring up to industry standards and best practices. This way, you can keep offering the legacy services your customers already love as you work on improvements and the next generation products.

Similarly, it’s cheaper to implement technological advancements step by step. Keep in mind that leveraging a lot of new technology at once may require a substantial investment in technical skills and infrastructure.

3. Adopt a Forward-Looking Business and Marketing Model

Some technological disruptions make traditional business models obsolete or nonviable. For instance, big retailers have traditionally occupied the space between products manufacturers and consumers. However, powered by the cloud, the digital supply chain has enabled manufacturers to sell directly to end users.

Retailers, wholesalers, and manufacturers have to stop relying on legacy processes and systems that involve intermediaries to establish and manage close relationships with their customers. The most competitive enterprises have to keep leveraging technologies like the internet, mobile devices, big data, and AI analytics to study and understand customer behavior as well as preferences, directly.

4. Outsource to Cloud/IT Managed Service Providers

The burden of acquiring and implementing advanced technology can be too expensive for small and midsize companies to bear. Fortunately, most disruptive innovations and capabilities, including AI, Internet of Things, and machine learning, are available in the cloud. SMBs with small budgets can leverage the solutions without having to invest in costly on-premises IT infrastructure or personnel.

You don’t have to take everything to the cloud right away. Initially, you may outsource inventory and financial management, payroll, or hiring, as you manage network security or customer relations in-house. The good thing with the cloud is that it lets you scale based on business growth and dynamic market demands at no significant extra cost.

5. Innovate and Target Existing/Potential Customers

Disruptive technology may impact the nature of specific products and the way end-users access or apply them, especially in the digital economy. For example, a growing number of companies are now shifting from on-premises to cloud-based solutions. If you’re an ERP developer targeting the B2B market, you can survive the disruption by making your product available in the cloud.

Be sure to market the upgraded product to your current customers! You could also scale to new markets and continue to grow your business.


Digital disruption doesn’t have to threaten your company’s survival. You may embrace a step-wise transformation, or you can partner with a tech provider who has the enterprise solution you need to differentiate your business or product. A measured pace when it comes to applying new, disruptive technologies allows you to remain competitive and profitable. How have you reacted when faced with digital disruption?