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Now Is the Time to Pull the Plug on Your Legacy Apps

Now Is the Time to Pull the Plug on Your Legacy Apps

Right now, IT spending is sluggish. Right now, everything seems uncertain. Right now, the CFO is glowering, the CEO is cowering, and shareholders are rebelling.Despite all that, right now is the perfect time to tear down your legacy applications and start over

You Are Your Legacy System

Before beginning any kind of modernisation or migration project, business and IT executives must understand exactly what their legacy systems do and whether the way the systems work actually reflects the business strategy, McDaniel says.

"It's a huge mistake to jump into migration on a per-project basis just to see where it leads," he says. "Develop a vision of where you want your architecture and infrastructure to be in two, four, six and eight years. Assess what skills are available and know what your investments are right now in development versus maintaining legacy applications. Does the existing system map the key business processes that are critical to success? That's where you must start."

David Guzman, senior vice president and CIO of Virginia-based maker of medical and surgical supplies Owens & Minor, did just that. His legacy systems were configured to assume that Owens & Minor, with $US3.5 billion in revenues, owned all the supplies it shipped to customers, but the company was evolving toward a third-party logistics distribution model. What Guzman needed was a system that allowed the company flexibility in distribution methods. This provided the business rationale for migrating to a Web-based platform.

For Roberts, CIO of the $US763 million San Francisco-based PMI Group, his legacy system's ability to support customer demands was "questionable". The back-office systems, which included claims payment, billing and policy maintenance, were 12 to 15 years old. According to a 1996 study commissioned by PMI (one year before Roberts arrived), the cost of modernising the company's legacy systems, estimated to be about $US20 million, was less than the estimated cost of the potential service-related failures that could result if the systems were left in place.

At that time, PMI staff in both the IT department and the policy servicing department were spending hours cross-referencing customer data between the legacy systems and the separate policy systems. As the two systems didn't talk to each other, there knew this was a long-term problem and that our business was getting more, not less, complex."

After careful analysis, Roberts determined that the database underlying his systems wasn't inherently flawed. He stuck with the AS/400 platform and is rebuilding his back-office applications in Java and RPG, an AS/400-specific programming language. He's looking at several legacy migration tools that could handle translating the data analytics processes hidden within his legacy transaction processing system, but he has not decided yet on a particular tool.

PMI's executive board members knew the legacy system was a problem, but they delayed the migration project in order to focus on getting the company's e-commerce strategy in place. Once that was complete in late 1999, Roberts and Kathy Schroeder, vice president of policy management systems and the project's business sponsor, got to work convincing the board that the time was right to tackle the migration. And one of the reasons the time was right, they said, was that the cost of the project, estimated at $US20 million in 1996, had come down in 1999 to an estimated $US12 million.

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