Is it time to upgrade your legacy systems?

The answer isn't a clear-cut "yes."

It's not "no," either.

It's "maybe," with an addendum: Whatever you decide, make sure you've carefully considered all of your options. There are more than you may think.

That sounds obvious. But, as I wrote about in a prior post, there's fierce debate and often a surprising amount of emotional involvement amongst the IT professionals you depend upon to advise you. Understanding your options and their relative value to your business can get very tricky.


Look at the rationales presented in two recent articles: Legacy Core Systems Often More Bang Than Whiz, by Robert Bessel at Credit Union Times, and Legacy Software: Who Smells a Rat? by Richard Clark in computing.co.uk.

In those pieces, the authors listed several reasons that banks and credit unions give for not upgrading aging core systems. Among them:

• It's too painful to upgrade to new technology, as it carries a huge cost in time and resources.
• They can decentralize their current system instead -- taking some processes out of the core and running them separately.
• Their technology looks new, with a loan origination system running on an iPad, for instance. Never mind the fact that its back end, as Bessel writes, "depends on ancient technology staggering around the basement."
• Many CEOs view technology as a cost center, not a potential profit generator. So if the current system runs fine (and relatively inexpensively) today, why change it?

Of course, your institution is unique. All of these arguments may exist, but how do you know what's right for you? The financial and operational demands around large-scale upgrades are real; leveraging existing systems often is a good choice. Many modern features can be added to your system or more smoothly integrated with well-designed new software running on top of your older core. Yet, as these articles also point out, the costs of not doing an upgrade or overhaul could be just as damaging:

• Not upgrading now could put you at a serious disadvantage as competitors upgrade and gain new capabilities.
• Decentralizing systems means more failure points over time. Doing this well often requires custom integration and development.
• Older core systems limit capabilities – even if your front end runs on the latest tablet.
• IT may seem like a cost center, but some businesses treat it as a revenue-generating initiative.

There are many ways to upgrade. "Rip and replace" is advocated by some (usually vendors for newer core systems), while incremental upgrade programs may be a better fit, especially for organizations on a tight budget or with little room for downtime.

Before you make a decision, ensure that a business case has been made and thoroughly reviewed, including the assessment of your IT department (or vendor) as to the impact any approach will have, both positive and negative, on daily operations, customer service, future growth, etc. And make sure that every design element for the resulting new system serves a well-defined business goal.

And whatever you do, take steps to remove emotional attachments and ulterior motives from your analysis. This decision is far too important to take lightly.