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Letters to a Young Manager

Legacy Systems: Fish or Cut Bait, #55
LTYM > Strategy

Dear Adam,
I hear your concerns about the legacy systems you inherited. It is consuming --both time and budget-- to try to keep these aging programs afloat and responsive to new demands. At some point you have to bite the bullet and make the change to a new system.

I remember inheriting an old donor database written in RPG II that ran on IBM AS400 equipment. It had been patched and repaired so many times, we were worried that more changes would break it. And it was holding us back as an organization. At some point the costs of maintaining the status quo exceed the costs of making the change. And costs include opportunity costs.

We took a divide and conquer approach. Part of the system did customer relationship management (CRM) tasks. These were the ones where new needs were strongest. So we started with a new CRM system acquisition project and moved the CRM functions to it. The system integration part was a challenge, but we knew we would need this middle-ware in the new world as well. So we implemented this part with the future in mind.

When this was done, we began moving the financial functions. It was a multi-year project, but when it was done and the AS400 system shut down, we had a champagne toast to mark the closing of this chapter.

Tom Peter's once said that sometimes you need revolution rather than evolution.[1]

[1] Tom Peters Thriving on Chaos: Handbook for a Management Revolution, 1991. Chapter 1.1 is aptly titled, "Facing up to the need for Revolution."


Legacy systems mean falling behind

Discussion Questions:

1) Which of your organization's systems are holding you back?
2) What is your plan to replace them?
3) Have you calculated the cost of change versus the cost of status quo?

For Further Reading:

Ron Ashkenas, "Kill Your Business Model Before It Kills You," HBR, October 02, 2012.
"Years ago, during the dot-com boom, Jack Welch required each of his businesses to go through an exercise that he called “Destroy Your” in which he asked them how competitors could possibly put them out of business."

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