The nation’s airline industry issues recently sent warning beacons to all businesses, including those in the trades.
The price for not staying current with technology is significant.
“If you want to matter and if you want to stay ahead of the competition, you have to use the tools that technology provides,” said Rachid Lamtabbet, who has worked in IT and software development in the public and private sector for almost 20 years. “Sometimes you just have to embrace new technologies. There is a lot of risk in staying behind.”
The evidence comes in data, not words.
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Entrepreneur.com reported that bad data from outdated technology can cost a business 30% or more in revenue, and the average cost of poor data across all industries is $3 trillion per year. And those numbers are from 2019, before the pandemic put further hurdles in the business pathway.
“Legacy systems are hard to maintain,” said Carly Taylor, CEO of Rebel Data Science and a machine learning security strategist. “Nobody wants to be in the position of realizing that the only person who understood how something worked just left. And hiring someone to replace that person is costly, due in large part to a smaller potential applicant pool who are interested in (and capable of) working on legacy tech.
“This is compounded by long onboarding processes to understanding outdated systems, which tend to be complex and poorly documented.”
Taylor also points out that it’s difficult to integrate legacy systems with modern solutions.
“That leads to more downtime and difficulties downstream when trying to integrate legacy systems into modern ones,” she said. “And they break, mostly because the aforementioned problems lead to band-aid solutions that have a tendency to fall apart as soon as everyone leaves on vacation.”
An old tech system is also more open to attacks and breaches. It can limit productivity, frustrate employees and affect the morale of everyone in the business. It runs slower and takes longer to assess and/or complete complex tasks. And it requires more patches, updates and help desk calls.
“It’s frustrating to people using the software and to the people who maintain it,” Lamtabbet said.
Witness the struggles of the aviation system in December ‘22 and January ‘23. Southwest Airlines had a nightmare experience over the holidays, with more than 15,000 cancellations leaving passengers stranded, sometimes for days. The head of its pilots association attributed problems to an outdated software system.
In January of ‘23, the FAA had to delay more than 10,000 flights and cancel 1,300 more due to a system safety issue it initially attributed to a corrupted file.
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Falling behind in tech costs time, too
Microsoft estimates that small and medium businesses who use old PCs (and old technology) could lose as many as seven workdays per year.
That means added costs and lower revenues. While some businesses balk at updating because of the upfront cost, the same businesses might find themselves losing money because they are not operating as efficiently because of their outdated tech.
“With tech moving so fast, often these legacy systems are locked in in a certain way that new developers and engineers are not familiar with or don’t have access to,” Lamtabbet said. “These legacy systems become a black box where even though they have the interface and can do things a certain way, they are not expandable and not scalable, and oftentimes they become the bottleneck.”
He admits that switching to a new system can involve scary initial costs, but stresses some of those businesses are spending as much or more to keep outdated systems operational.
Lamtabbet stressed that the long-term gain of updating technologies far outweighs the short-term pain. And while the discussion about whether to update or not goes on, the business suffers in terms of scale and revenue along with a cost in reputation and customer trust.
“That takes a long, long time to fix,” Lamtabbet said. “You have to move on and stay up to date with technology. That’s how you stay alive.”
Stop ‘wasting time and money'
Jennifer Roberts, Director of Marketing Strategy at ServiceTitan, the cloud-based software for the trades, put it more bluntly: Antiquated technology leads to “wasting time and money.”
“Outdated technology, especially systems not built with the trades in mind, lack the functionality needed to operate efficiently.,” she said. “Frequently it does not have the right integrations, workflows and support, so businesses pay the ‘switching cost’ of using fancy workarounds to make the system work for them.
“Using outdated tech means not getting the value-added of the platform working together, the value of having it all in one place. And for some, the value of a purpose built solution.”
One “hidden” benefit to updated technology is its value to the employees. Because the upcoming generation grew up with technology in their hands, they expect and work more efficiently with up-to-date technology on the job.
Technology also plays a role in the customer experience. Lacking the right technology can quickly spiral into a negative space, as Southwest and Ticketmaster have learned. Opportunity costs—missed chances for revenue and growth due to poor tech—pile up.
“(Ticketmaster’s) bad system design led to lawsuits and a DOJ (Department of Justice) investigation,” Taylor said. “Southwest is under similar scrutiny now, with the DOT and customer lawsuits piling up.”
Waiting means losing. Technology development happens so fast that 10 years may be a long time to go without updating. ServiceTitan relies on customer feedback so that the software is constantly updated to meet their needs. ServiceTitan also relies on industry experts to ensure its approach is current.
“It’s a really cool thing that (ServiceTitan is) not a finished product,” said Nick Chacos, Operations manager of All Comfort Services in Madison, Wis. “It’s constantly getting better.”
Another hidden value: Customer experience
Roberts points out that ServiceTitan provides an all-in-one platform for both commercial and residential businesses, and that the software helps make for an enjoyable customer experience while giving the business in-depth awareness of profit and loss via reports, the dashboard, the enterprise hub and Titan intelligence.
Seventy-three percent of people point to customer experience as an important factor in their purchasing decisions, but only 49% say companies provide a good customer experience, according to a survey by PWC.com, one of the leading professional service networks in the world. In the United States, 86% of buyers are willing to pay more for a great customer experience, something technology provides.
Though the incident will be investigated further, the Federal Aviation Administration (FAA) blamed its issues on a damaged database file in the airline safety system. That problem led to more than 10,500 delayed flights and 1,300 canceled ones over two days in January ‘22.
Southwest itself calculated that its holiday problems could cost the airline between $725 and $825 million, according to the New York Times.
“Everything comes down to how you compete as a business,” Roberts said. “Nowadays, the competition is heavier than ever. There are so many competing pressures from the market. But those pressures can be alleviated by having the right technology in place.
“It is a major piece of the puzzle to unlock efficiencies and unlock added value.”
ServiceTitan is a comprehensive software solution built specifically to help service companies streamline their operations, boost revenue, and substantially elevate the trajectory of their business. Our comprehensive, cloud-based platform is used by thousands of electrical, HVAC, plumbing, garage door, and chimney sweep shops across the country—and has increased their revenue by an average of 25% in just their first year with us.