Organisations face continuous pressure to improve efficiency, adaptability, and customer satisfaction. However, many companies still rely on deeply embedded legacy processes that haven’t evolved alongside changing demands. These outdated systems can hinder growth, reduce agility, and impact customer experience without Value Stream Mapping (VSM) or process simplification.
The importance of modernising core processes has never been more evident, especially since the arrival of AI. Industry examples demonstrate both the risks of inaction and the benefits of transformation.
Decreased operational efficiency
Legacy processes are often complex or bureaucratic, with multiple layers of approvals, paperwork, or outdated software. These inefficiencies slow operations, increase costs, and impact the bottom line. In 2019, Ford announced a major restructuring plan to address inefficiencies in its processes and supply chain, hampering its ability to respond quickly to market demands.
By not simplifying workflows and modernising processes, Ford lagged behind more agile competitors, especially in the electric vehicle (EV) market. VSM can help organisations identify waste in their operations and streamline workflows to improve productivity and cost-effectiveness.
Reduced agility and innovation
Legacy processes can limit an organisation’s ability to adapt quickly to market changes or introduce new products. Rigid processes hinder creativity and innovation. Kodak’s failure to adapt to digital photography is a notable example.
The company held onto traditional film production processes and missed the shift to digital, which led to a significant loss in market share and relevance.
By applying Value Stream Mapping, Kodak could have identified inefficient or obsolete practices, allowing it to pivot and innovate more effectively.
Poor customer experience
Today’s customers expect fast, seamless service, but legacy processes often result in delayed responses and inconsistent service quality. For example, British Airways faced issues due to its reliance on outdated systems, which led to multiple IT failures and service disruptions, affecting customer trust and satisfaction.
Streamlining customer-facing processes through VSM could have highlighted and addressed the bottlenecks in service delivery, improving reliability and enhancing the customer experience.
Best practices suggest that companies use VSM not only to improve internal processes but also to enhance customer interactions by minimising points of friction.
High compliance and security risks
Legacy processes often rely on outdated technology and data management practices, increasing the risk of non-compliance and security vulnerabilities.
The 2017 Equifax data breach affected millions of customers and was partly attributed to legacy systems that had not been updated or optimised. Organisations are exposed to compliance gaps, cybersecurity risks, and potential reputational damage without regular process simplification.
A systematic review and mapping of processes enable companies to stay updated with regulatory changes, ensuring compliance and data security.
Increased operational costs
Legacy processes require significant resources for maintenance, training, and support. By not optimising these workflows, companies bear higher operational costs, which affect profitability.
For instance, IBM, which has successfully evolved its business model, undertook a process simplification initiative to eliminate redundant procedures and streamline operations, which contributed to its transformation from a traditional tech hardware company to a leader in cloud computing and AI.
VSM can reveal redundancies and highlight cost-saving opportunities, allowing organisations to reallocate resources toward growth areas.
Modernising legacy processes
Organisations can mitigate these risks by applying VSM and process simplification best practices:
- Focus on core processes directly impacting efficiency, customer satisfaction, and compliance.
- Involve various departments to understand the end-to-end process and capture improvement opportunities from multiple perspectives.
- As the market evolves, continuously assess and update processes to remain agile and responsive.
Retaining legacy processes without a structured approach to simplification and Value Stream Mapping can hinder an organisation’s ability to grow, adapt, and deliver excellent customer experiences. By modernising core processes, companies can reduce costs, increase agility, and enhance customer satisfaction. Through Value Stream Mapping and simplification, organisations can build a resilient foundation and position themselves for sustained success.