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Upgrading Your Legacy Systems

John Dickinson
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Assessing the Costs and Benefits

(Page 4 of 5) Step Three: Make the Business Case Standard cost-benefit analyses of upgrading legacy systems are not always easy and don't always address all the important business issues. The cost of hardware and packaged software upgrades and replacements is relatively easy to measure and, if the benefit is the difference between a system working and a system not working, so is the dollar value of the benefit. But costs can easily cascade beyond basic hardware and software upgrades. "If we upgrade our IBM AS/400 hardware," says Martinez, "all the software guys would be in here looking for more license fees." Estimating software development costs -- especially actual code development -- is inherently harder than calculating hardware or software purchases. The advent of enterprise resource planning (ERP) systems that come with prewritten code and service-oriented architecture (SOA) designs that include reusable module libraries have made estimating the costs of software development easier. Both developments shrink the amount of code to create and help define the scope of what such custom software can do. A significant but hard-to-measure cost is the loss of knowledge in the outgoing legacy system. "Ultimately the biggest cost is the migration," says 5.11's Martinez, who points out the difficulty of creating time lines that include user retraining as well as the planning and work that go into parallel operation while users are learning the new system. Sometimes you can get lucky, though: "We developed a one-hour training course for new Windows Vista users," says Keller, "but most people only needed about 10 minutes." Understanding Benefits Requires Faith, Guesswork If estimating costs is tough, figuring out the benefits may feel like pure guesswork. But even when the benefits may not be directly measurable, they may be still be convincing. The benefit of replacing a broken legacy system is pretty clear. It's harder to measure the negative impact of users spending time creating offsystem spreadsheets in order to do their work, but it does make a difference. Sometimes, a single issue can bring the benefits of upgrading into sharp focus. When Santa Cruz County upgraded, "we lost the requirement to support a handful of nonstandard machines, that included some Windows 95 equipment, and a computer running an older Linux version," says Doan. That was a big relief to the busy department. Security can also be a hard-to-measure issue. "Too often midsize business people focus entirely on cost," says HP's Michelson,

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"but if you don't upgrade hardware in time, for example, you open yourself up to the risk of virus attack and software obsolescence."

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Ultimately, "we have to study the problem carefully and plan for a specific number of users and a specific volume of business," says More >> Martinez, "and then make a cost-benefit analysis." The benefits have to be spelled out in a way that convinces management as well, he says. "When business is rolling along, they may not care very much how hard it is to track or manage."
Page 5: Finding Unexpected Upsides Previous Page | 1 | 2 | 3 | 4 | 5 | Next Page

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