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Technical Bankruptcy and Government Legacy Systems

 

July 14, 2017

Computer Economics, an IT research firm, published a paper, Avoiding Technical Bankruptcy in Legacy Systems, in March. The report, summarized here,  authored by Frank Scavo, argues that 1/5 of organizations are at risk of “technical bankruptcy” because of the use of legacy systems and older versions of current systems.

This should be a wake-up call to government IT departments whose use of legacy technology has been well documented. It’s bad news if the analysis of the United States Government Accountability Office is any indication of trends. Governments are faced with with increasing budgets to operate and maintain legacy systems, at the expense of innovation expenditures.

Computer Economics identifies five indicators that systems have met technical bankruptcy:

  1. Extensive modifications, extensions, and interfaces
  2. Poor understanding of the system by users and IT alike
  3. Direct involvement of IT personnel in business processes
  4. Legacy system atrophy as shadow IT emerges
  5. Upgrade or replacement hard to justify

The Cold Dark Truth of Government Technology

The problem with many government ERP implementations is that new systems often meet the first three criteria causing the rapid emergence of workarounds and shadow IT.

Government ERP systems tend to be highly customized from day one. As Scavo describes, “modifications to packaged software make upgrades more difficult because they will need to be evaluated and possibly be reapplied when the system is eventually upgraded. So, by meeting user requirements through modifications, the IT organization is making it even harder to get out of technical bankruptcy.”

IT often leads the acquisition and implementation. It’s no wonder that there are high failure rates.  Technical debt often makes systems financially unsustainable in the long run.

That’s why this report is important reading for government organizations attempting to consolidate legacy systems or implement shared services. It does little good to replace ancient systems with what the Gartner Group calls “legacy ERP“, that requires more customization than more modern enterprise applications. The report shines a light on the age of ERP systems in operation among many organizations.

Legacy is What Legacy Does

My sense is that technical debt is much more than about technology. It’s very much about legacy thinking.  Scavo describes the process of escaping technical bankruptcy. Legacy enterprise software thinking in government often leads to technical debt:

  • Tried and True Fallacy: the acquisition of technology from established vendors often increases implementation risk because of customization and training costs
  • Enterprise Fallacy: the push to run governments like business through an “enterprise lens” often fails to recognize what makes the public sector unique
  • Control Fallacy: the desire to host systems on-premises or to develop software internally to increase “control” over systems often does the opposite by opening up cybersecurity and staff turnover risks
  • Procurement Project Fallacy: the notion that risk can be mitigated through strict procurement and contract guidelines often results in overly-complex waterfall implementations

Government IT procurement often looks like Greek tragedies. Recent Government of Canada implementations of PeopleSoft ERP (called the “phoenix pay system”), standard shared services e-mail, and standard web content management using Adobe (for “Canada.ca”) are classic examples. These systems were meant to replace legacy systems. Let’s hope that the Government of Canada leverages the crisis opportunity for process changes – experimentation, agile implementation, cloud computing, and procurement innovation.

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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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