I had 5 engagements in the recent past, where clients ran what one would call legacy systems. Legacy systems in this context are systems have emerged in the 70s and early 80s and sometimes before that, when there was no such thing as standard software. Standard software just started emerging, when SAP among others started developing its first suite for Payroll and Accounting functions on large computer systems in the early 70s. A lot of companies at the time saw tremendous opportunities to automate certain business tasks specific to their environment by developing solutions custom designed for the opportunities they had, while software companies emerged developing software for common functionality. COBOL, RPG and Assembler were common languages in the business world to develop such applications, and Hardware provided largely by IBM provided the hardware platforms to run these solutions.
Most companies turned the corner at some point, replacing their old homegrown system with standard ERP-Systems perhaps complemented with some add-ons that may be still home grown, but it is surprising how many of these legacy applications still exist. This does not come as too much of a surprise to me with really large organizations, but when I encounter a food processor with a couple of locations and perhaps a few hundred to a couple of thousand employees, you got to ask yourself – Why?
I admit, a custom tailored suit fits normally better, and a lot of these legacy applications have certain detailed features that make the move to another application especially hard. I guess the point though should be to rethink the overall solution to the problem and not trying to move the old habits to new software. “Now we got a new system, we can make the wrong things faster.”
Unfortunately a lot of companies do not turn the corner. They may go out of business (Bang!), get acquired by somebody else (Bang!) just because they did not move in time. The underlying reason is twofold:
- Companies look at software and hardware as capital expenditures and internal personnel as expense. While they like to reduce the latter, they keep justifying that they need these people, because they always had. Since they hardly ever invested in software and hardware, a significant shift in the expense structure is hard to comprehend and execute.
This situation is for a lot of companies like driving full speed towards a cliff. Existing management in IT will fight to keep the old stuff until they retire. Their legacy will be that the leave a company with a system that nobody that comes after them can still maintain. Their interest is not aligned with the goal of the organization to become lean and efficient or even long lasting. Their motives are largely selfish. Their strategy though will jeopardize the future of the organization they work for in a dramatic fashion unit the Big Bang occurs – whether that are expiring software licenses, hardware that is no longer supported or spare parts are sparely available or not finding successors that can and want to deal with this, because it jeopardizes their future. The Big Bang will occur at some point, so change or watch it to happen.
PS.: If you read this, and you are in management of a company that runs legacy software, this article probably does not apply to you. You must be a good and well-intended person.