IT Modernization: 5 Criteria for Reviewing Further Legacy System Investments

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IT Modernization: 5 Criteria for Reviewing Further Legacy System Investments

Decision making criteria for legacy investments

If your agency or company is planning to modernize one or more systems, the entire process could take two to five years. During this period, human and financial resources will be in greater demand than ever, as there will be a need for two spending streams – one to plan and execute the modernization initiative and one to maintain the legacy system. Now, you have a dilemma: How do you manage your investments during this period, and under what conditions should you continue to make investments in the legacy system?

A Sharp, Bright Line or a Fuzzy One?

Because investment decision-making is a team sport, different players will have different ideas on how to proceed. Some will advocate for a sharp, bright line between the two ecosystems, suspending all investments into the legacy system so that all possible resources can be reallocated to the modernization initiative. They will argue that continuing to invest in the legacy system will only drain resources away from the initiative, extending the timeline and the need for dual spending streams.

Other team members will argue for a fuzzy line so that your mission and business can still be supported and enhanced during the modernization period. They will assert that you can’t leave your users twisting in the wind for years with a dormant system that can’t be enhanced. Besides – that shiny new system may or may not deliver as promised or as scheduled.

Five Criteria to Serve as an Investment Filter

To strike a balance between starving the legacy system and over-investing in it, you can apply a filter on all proposed investments into the system. This filter should consist of a set of mutually agreed-upon criteria that articulate what is a mission-critical or business-critical investment.

From my experience, I have found that there are five criteria that can collectively serve as a screening filter for legacy-system investment. One criterion must be met to further consider a potential investment. Together, the five criteria serve as an excellent starting point for team review and discussion.

Will the investment:

  1. Keep the system from becoming non-compliant?
  2. Reduce the risk of a major system failure?
  3. Decrease the risk of a major system investment (e.g., repair expense)?
  4. Serve as a strategic building block on the modernization roadmap?
  5. Provide a critical and urgent capability (i.e., a throw-away capability necessary for the mid-term)?

Some Important Process Considerations

These criteria should serve as a filter to be applied to an investment request before any effort is expended on it. This will help to ensure that precious resources are not spent reviewing, estimating, and planning enhancements to the legacy system that will later be deemed to be non-mission-critical or business-critical. In short, those investments that do not meet one the above criteria would be placed “on-hold” and consume no additional resources.

For those investment requests that do meet one of the above criteria, they should then proceed to the next step in the process. That next step could be to either plan and implement it, or to further evaluate it. That evaluation could include using portfolio management techniques to determine the degree to which the investment contributes to the overall strategy in relationship to its cost, and the analysis of other dependencies and considerations. These techniques were discussed in my October 2016 blog, “Group Decision Support for Agency Budget Formulation”.

In closing, to make effective use of the five criteria for reviewing further legacy system investments, it’s critically important to have a good sense of the timeline associated with the modernization initiative. Knowing how long the modernization initiative will take will provide the necessary context to help you assess the impact of deferring a given investment, and better manage your legacy system investments during this period.

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John Sammarco has thirty-five years of experience leading, managing, and consulting to top public and private sector organizations, and has over twenty years of experience in facilitating complex group decisions. John founded Definitive Business Solutions in 2003, which provides world-class group decision-making solutions to increase efficiency, boost ROI, and reduce risk associated with business and technology investments. In 2016, John developed Definitive Pro™, which helps groups build consensus and make multi-criteria decisions.