Projekt Digital

We are involved in a huge amount of legacy software modernization projects in the past, and in many of those the opportunity of getting rid of the legacy software with migrating to a off-the-shelf software is existing. The more the modernization of the legacy software will cost, the more likely an evaluation of a switch to an existing standard solution will be. From the psychological perspective it is absolutely evident, because with kicking out my legacy application, I could get rid of all my sorrows at once.

But – you’ll also lose all your business implementation, your rules, you in readable code written understanding of the uniqueness of your company. Especially if the legacy application covers your main business.

Already in December 2010 the center of European Economic Research (ZEW) headline in a discussion paper that “the use of customized enterprise software is
related to service innovation in a positive and significant way.” “The positive impact of individual enterprise software on service innovation stays robust among different specifications.” Download of paper

There are a lot of websites out there that explain the pros and cons of Individual Software vs. off-the-shelf software, and we will cover them in a second. But none of them takes care about this decision in a situation, where an existing legacy application already covers their business. This will change the rules.

The question is, to invest into a huge modernisation of the existing software and stay in the way of running an individual Solution or redirect the investment into an existing solution.

As an important baseline for the following chain of arguments it’s necessary to know how we see and enable Modernization projects: If you stay in individual development we follow and advise the staged approach described by Gartner. That is, in a couple of iterations replacing the existing legacy application with the new solution. Integration technologies allow us to run both applications in parallel and ensure a stable and smooth move to the new application.

So let’s pick up the arguments from the perspective of the individual solution.

Due to the staged approach there is no wait time. In an agile approach sprint by sprint the legacy application will be replaced by the new application. With this you could start earlier with the most important improvements as with an off-the-shelf solution, where you have to run a lot of interviews for all departments, creating a GAP analyse and implement the customizations before you could schedule the Go-life. On the other hand you finish later with the most unimportant parts of the application.

Going life with a big off-the-shelf system, like an ERP, is a fragile timespan for an organisation. In most cases, it’s a big bang, because business is not able to run two different systems sync in their daily business. All processes have to describe, analyse, and train – the system has to set up with all master data, perhaps some customization has to implement. This will bound the business and perhaps ends up in a way, that business has to make some compromises and sacrifice functionalities.
Modernising the legacy application removes this stress from business.

Off-the-shelf solutions need an integration into the existing infrastructure. Interfaces, data exchange, system integration has to be adjusted and reimplemented.
This is not necessary for the legacy application. All those interactions stay more or less the same. Perhaps some refactoring, if the data model change.

Business is used to run the legacy application and you define it with them, in which way “translate” the existing application into a new one. So they will be familiar with the new application very fast and very easy. Due to the stage approach, there is no need to learn a big application from scratch – it’s learning by transformation.

Your system administrator is used to host the application with hardware, performance, user accounts, backups, etc. There is no uncertainty about the right infrastructure. The new application will extend step by step the legacy application. With this the administrator has time to get familiar with scalability and hosting.

If you decide to replace the existing legacy application with an off-the-shelf solution, you could benefit from following advantages.

Off the shelf solution fits well for standardised processes, e.g. CRM, accounting, HR.

Rather than bind internal resources for maintenance and support you could transform this into regular external costs, which may be easier for your cost structure. This depends on the personal and financial structure of your company.

With regular updates and patches you could benefit from markets best practise without investing into your own headcount or running your own business development.

One major task, which is very often overlooked in the replacement of a legacy application with an off-the-shelf software is the fact of running a GAP analysis. The legacy application is more or less covering the actual business, but the requirements are documented out of interviews and outdated documentation. Sometimes very time consuming code reading is used to understand the actual implementation of business rules. All this could end up in a GAP analysis, which cost intensive and failure affected.
Unfortunately we saw a couple of customers, who were getting aware of missing functionality after the Go-life, due to the fact of rare or obvious functionalities which are missed in the interviews.

Independent from the existence of a legacy application, the following points describe the pros of an individual application. The chapter covers the results from the center of European Economic Research.

With an individual solution it’s easier to follow the uniqueness of your Business Processes and differentiate your company from the competitors.

With the individual approach you could specify your business in a way, which is not yet covered by any off-the-shelf solution.

The software is able to follow your business – not the other way around. If you run your business a little bit different, due to whatever reason, an individual solution will fit to your needs.

You do not have to wait for the next update, release, or training session. If Business rules change, you could directly adjust this in your individual solution.

You are not bound to the rules of the vendor in case of pricing models, verified hard/software, maintenance, enhancement.

The main question, you should answer is:

Should the off-the-shelf software guide your processes, or should the individual software support your processes?

Our advice is:
If the software treats your main business processes, those, which gave you the small advantages on the market, the reason for your company to exist, use individual software to stay agile, fast and innovative. If you like to support the second or third level processes use off-the-shelf software.

Don’t throw away all the knowledge in your legacy application!