Almost all big firms continue to accumulate systems after systems over decades. Once the systems goes live, there is never a word of retiring and whether the user use the application or not, it continues to run with nobody paying attention to it. Retiring any legacy application is last in priority on any CIOs agenda. Why is it so hard to kill off old systems?
One word: Metrics. Older systems lack measurements and KPIs. Given that there is no quantifiable measure to review the data, it’s hard to kill. Often times it becomes and matter of opinion vs. matter of fact.
I once had made a suggestion to turn off 10 year old Powerbuilder reporting system after initial tech assessment. But several client stakeholders objected saying they use that systems to generate reports on regular basis. With no metrics to prove, I decided to test this. I asked the developer to include line of code to track who logged when. So, we watched for 2 weeks. Result: Zero logins. Then we turned off the reporting system completely without letting the user know. What was the result after 2 months? Zero logins again! Nobody ever knew it was turned off because they had not used it. So, when we reviewed the findings and results, CIO agreed to decommission the application. What we all learnt is this – users are notoriously inaccurate in deciding these things; perception and reality is different.
Most organizations spend 80% of their IT budgets on “keeping the lights on” (Source: Gartner)
Only 20% for new business and innovation (Source: Gartner)
Cycle needs to be reversed. Don’t you think?
Why is this important?
Three words: Free up $$ for investments in Digital, Innovation and New Business Development.
There are other reasons to move away from legacy – lack of available legacy skills, closed architecture hindering integration and experimentation, old infrastructure risks, high maintenance costs (hardware, software, storage costs +labor+vendor), not useful for customers, and so on.
Companies have to invest in digital to get ahead – and they need dollars for digital investments. So, instead of maintaining old legacy apps that may not provide any business value, CIOs must retire them and free up the budget for digital investments.
Planning and Rationalization should follow a continuous cycle… applications must be evaluated every quarter
Any investment that is approved needs to be planned through end of life cycle. In other words, any product/service that you put out has to provide immense value to customers relative to cost incurred, minimize risk for companies, and has to make financial and technical sense – all the time. When this criteria is not met, it’s time to pull the plug.
All applications should measure key KPIs and report these to line managers on regular basis for evaluation. For in-depth approach on how to run Application rationalization efforts for your organization, please see my earlier post.
In this customer-centric age where agility and fast-paced innovation rules coupled with moving to digital, it is very important for CIOs to pay attention on application rationalization strategies and focus investments on flexible, agile disruptive technologies which can advance organizations strategies. Today’s competitive marketplace requires that enterprises modernize their application portfolios – its a business imperative.
What other measures can CIOs take to gain advantage in this digital age? Share your thoughts down below.