The pace of new technology these days is frenetic, with little chance of ever slowing down. As a result, enterprises that invested heavily in new systems — even as recently as the last few years — now find their systems out-of-date even before they’re done paying them off. And worse, they can’t just scrap them and start over with a new system because of “technology lock-in.”
What’s technology lock-in?
Technology lock-in (aka, vendor lock-in, proprietary lock-in, or customer lock-in) is the condition of being dependent on a single vendor, product, system, or application because — having sunk a lot of time, effort and/or money into one of them — switching to a competitor would be incredibly difficult, expensive and/or painful.
Closed, proprietary software or systems purposely encourage technology lock-in, ensuring long-term customers and revenues while discouraging innovation — after all, why waste money on innovation when your customers can’t easily leave? (Insert evil laugh here.)
It’s an all too common problem in the corporate world today because the business model is so effective — many executives really don’t want the hassle of changing and maintain the status quo, grudgingly tolerating their legacy systems’ expenses to doing business. But there are additional costs they may not be taking into account.
The less obvious costs of lock-in.
Doing nothing about a company’s sub-par apps or systems can do very real damage to a company’s profitability in a number of insidious ways:
- Out-dated technology reduces employee productivity
- Out-dated technology decreases employee morale
- Out-dated technology increases employee turnover
Old technology decreases productivity (and increases frustration) by making employees have to work harder than they should in order to accomplish a given task.
And the knowledge that better ways to accomplish a task exist — but aren’t being implemented — decreases morale, making employees act passive-aggressively unproductive, further hurting your bottom line.
Plus, miserable employees tend to quit, taking knowledge (that they learned at your expense) with them, so companies have to keep hiring and training new people, costing them money over and over again.
Being tied to any one vendor is a recipe for regret. Conversely, companies that adopt and use new technology not only get increases in productivity, they get happier employees, fewer defections, and reduced training costs — all of which pays dividends over time.
If you’re looking at getting new technology, here are a few tips to consider first:
Tips to avoid legacy lock-in:
- Don’t commit to any one vendor — Choosing “Best Of Breed” software lets you spread your risks, but it can also create system, data, and communication silos.
- Avoid long-term contracts — Going month-to-month gives you more flexibility, but costs are usually higher, and changing vendors can still painful.
- Use Open Source software — The software is free, but installation, administration, and usability can be more difficult, extra features may require added development time, and support costs could erase any cost savings.
- Avoid pseudo-Integration — Vendors who don’t have a vested interest in the success of any one system won’t lock you in, but vendors that work with “many” or “most” applications might.
Obviously, the best way to overcome technology lock-in is to avoid it in the first place, but hindsight is always 20/20, and sadly, that’s not always an option. Many companies are forced to stick with a vendor and its outdated technology even though it lacks the scalability and functionality needed to support a modern mobile and global workforce.
If you’re already locked-in due to decisions made in the past, we’ve got a few tips for companies in that predicament, too:
Tips to overcome legacy lock-in:
- Use open, app-agnostic vendors — tibbr works with all your business apps, easily adding modern social features to legacy systems without needing to start over from scratch, wasting previously sunk costs.
Well, okay, that’s really only one tip. Fortunately, it’s a good one. And it’s an approach used by smart companies like KPMG, Thomson Reuters, Nielsen Company, Schneider Electric, and a whole lot of others to overcome technology lock-in.
If you’d like to learn how tibbr can add the modern social features your current system is lacking, get a free trial of the tibbr platform now.