Hidden Insights in Legacy Systems: How Data Leaders Can Unleash CX Innovation

Many established companies have amassed a wealth of historical data over the years, often tucked away in outdated legacy systems. This data represents a largely untapped resource, ripe with opportunities for innovation and business growth. While the data was originally collected to address specific business needs at the time, companies frequently fail to recognize the full potential value it could offer – particularly in the age of AI.

That’s according to Michael Olaye, EVP and Managing Director of Hero Digital. As a digital marketing leader, Olaye recently sat down with Alation's CMO, David Chao, to explore the role of data in improving customer experience (CX) with help from AI. Olaye has spent decades helping leading brands, such as BMW, Credit Suisse, and Unilever, transform data into impactful marketing campaigns and CX offerings. “Some clients do not know they are sitting on gold,” Olaye reveals. The trick? Finding and transforming that data “gold” into ROI. 

Legacy systems act as vast repositories, housing years' worth of customer interactions, transaction records, product usage patterns, and more. This trove of institutional knowledge and insights remains largely underutilized, as businesses prioritize immediate operational demands over exploring new frontiers. However, the innovation possibilities within these dormant data stores are immense, waiting to be uncovered and leveraged by forward-thinking organizations.

How can such organizations mine these hidden seams of gold? Read on to learn the answer (or access the full conversation, also posted below).

Strategies for unlocking the value in legacy data

Olaye offered several tips for finding and mining data gold:

Listen closely to identify clues about unknown data assets. Careful listening during conversations with clients can reveal the existence of untapped data sources that may not be immediately obvious. Pay attention to offhand comments or phrases that hint at data being collected but not fully utilized. “I think there’s an art to listening,” Olaye shares. “There’s an active way of listening and picking up on cues and picking up on conversations or phrases that the client might use.”

Involve diverse experts to uncover blind spots. Bringing together personnel with different areas of expertise, such as IT, data science, and business operations, can help surface overlooked data assets and potential use cases. Each perspective can fill in gaps that others may have missed.

Experiment with combining data sets in new ways. Don't be constrained by how data has been traditionally used within an organization. Explore innovative combinations of data from disparate sources to fuel new products, services, or business models. An unexpected mashup of data could unlock game-changing insights.

Turning legacy data into customer-focused innovation

With the right strategies, legacy data can be a launchpad for customer-centric innovation. The key is using legacy data as a driver for understanding “next-best” customers better and creating offerings that align with their lifestyles and preferences.

Olaye shared one example of an insurance provider who sought to target students with a plan that fit their lifestyle. After analyzing the data on their behavior and needs, the firm crafted an innovative new "elastic insurance" model for students. They discovered that students never need to insure everything at one time, but only certain possessions at certain times. 

By tapping into this underutilized data insight, they created a more tailored insurance experience that allows students to insure just a few selected items like a laptop, keys, and bike while living in student housing. When returning home, they can easily switch the coverage to insure different items through an app. This "elastic insurance" model aligns perfectly with the lifestyle and needs of students while providing a delightful customer experience.

The example highlights how legacy data can fuel game-changing innovation when leveraged to deeply understand customers. With the right expertise and willingness to experiment by combining data in new ways, the long-forgotten data treasure trove in legacy systems can lead to offerings that resonate with customers' actual lives.

Fostering a mindset of curiosity and experimentation with data

To unlock the full potential of legacy data systems, organizations must adopt a mindset of curiosity and experimentation, a principle Olaye passionately emphasized. “I think experimentation is very undervalued in companies that make a lot of money or companies that are comfortable where they are,” he observed. Olaye explained how technology offers opportunities to "take data that otherwise wouldn't really be used for anything and create new magic out of it."

Olaye also touched on how innovation often emerges unexpectedly. “I wanna say a lot of companies stumble on innovation by mistake,” he said. In his view, many organizations operate in an "exploit manner," focusing on maximizing returns from existing products and services. While these approaches provide stability, they can stifle the willingness to take risks or explore uncharted territory. He elaborated, “Everybody plays safe. And then you might have an R&D division, or you might have a group of people who go off and do a moonshot project... That tech might then gain traction and somebody might try it on the business, and then it goes good, and then it's called innovation.”

Olaye contrasted this with more forward-thinking companies that continuously evolve, not just out of necessity, but as a deliberate strategy to maintain leadership. “The more mature companies... are forever evolving, not because they have to, but 'cause it's a necessity to stay as a market leader,” he shared.

To foster this culture, companies need leadership that actively supports experimentation and normalizes trial and error. By creating environments where innovation can flourish, and combining it with robust data literacy initiatives, organizations can empower their workforce to discover new value hidden within their legacy data systems.

Harnessing AI and machine learning for legacy data innovation

The vast troves of data residing in legacy systems present a rich opportunity for companies to drive innovation through artificial intelligence (AI) and machine learning techniques. By applying advanced analytics to these historical datasets, businesses can uncover hidden insights and patterns that fuel the development of innovative products, services, and customer experiences.

To unlock the potential of legacy data, companies must first address the challenges of data preparation and cleansing. Legacy systems often store data in disparate formats, with inconsistencies and quality issues that can impede effective analysis. Leveraging data integration and cleansing tools, along with human expertise, is crucial for transforming raw legacy data into a usable state for AI and machine learning models.

Once the data is prepared, businesses can employ predictive analytics techniques to identify innovative use cases and opportunities. Machine learning algorithms can detect intricate patterns and correlations within the data that may not be apparent to human analysts. These insights can inform the development of new products tailored to customer needs, optimized pricing strategies, or personalized marketing campaigns that resonate with specific customer segments.

Moreover, AI-powered natural language processing can extract valuable information from unstructured data sources, such as customer feedback, social media interactions, and support logs. By analyzing this qualitative data, companies can gain a deeper understanding of customer sentiments, preferences, and pain points, enabling them to design more user-centric innovations that address real-world challenges.

Through the strategic application of AI and machine learning techniques, companies can breathe new life into their legacy data systems, transforming them from static repositories into engines of innovation and competitive advantage.

Conclusion

Legacy data systems hold immense untapped potential to revolutionize customer experience and drive innovation. As Olaye noted, companies often don't realize they are "sitting on gold" until they take proactive steps to uncover its value. By fostering a culture of curiosity, investing in AI-powered solutions, and experimenting with data in new and creative ways, organizations can transform dormant datasets into powerful tools for growth. Businesses that embrace this opportunity will not only delight customers with tailored experiences but also stay ahead in a competitive, data-driven world.

Ready to learn how a data catalog can help you transform your legacy data into gold? Book a demo with us today.