Knowing When to Retire Old IT Systems

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Are your legacy IT systems making your business vulnerable?

One of my client companies recently paid $50,000 for a 20-year-old Data General computer because they have a homegrown business critical software application that runs exclusively on the DG hardware. When the old hardware died, they were forced to replace it at great expense. The person who built and managed the system recently retired compounding their exposure to bigger problems with their legacy system. The company is not sure what they will do next. Whatever it is, they know it will be expensive.

Another client asked me to review a proposed new point-of-sale (POS) system for a small retail video chain. The company had been using a homegrown system that one of the founding partners, who had a background in computer science, wrote 16 years ago. I was appalled to discover the new system was actually no better than their old system. It also ran a database written on top of an emulation of RT-11 (an antique OS from the dawn of the computer age) on 486-based hardware. The company kept a roomful of old 486 PCs for spare parts. The new system’s one advantage — the business owner could go on vacation, and not worry that he would be called back to fix it.

Are you running unsupportable software and hardware systems that cost more to maintain than replace? If your system broke tomorrow, would you be able to replace it without major disruption? Do you have a system that only one person developed, understands and maintains?

If you answered “yes” to any of these questions, then maybe it is time to consider retiring the legacy system and upgrading before you are caught short. This month we will discuss how to tell if your IT systems have outworn their usefulness and are actually costing you more to maintain than replace them.

Support Costs vs. Replacement Costs
Okay, fess up. How many of you are still running an old 386 machine somewhere in your operation that is running an application critical to your business?

You are not alone if you have such a system. You might think that just because you fully depreciated the hardware long ago, your system is “free.” Think again, there are real and hidden support costs to maintaining legacy hardware and software systems. So many businesses fall into this trap that there is an entire cottage industry devoted to supporting antique hardware and software. That does not mean that you should keep yours, unless you have a very compelling reason.

Just because a system is still running and fully depreciated, it does not mean that it is in your best interest to keep it. A few years ago, I convinced my extremely parsimonious manager that it was cheaper to buy replacement hardware and stop paying $12,000 a year in support. Replacing the system cost $8,000 and they also tripled the available processing power.

If you are running a standard operating system on your hardware, it can be relatively easy to upgrade without major disruption. Systems with various flavors of UNIX are particularly transparent to upgrade. Your upgrade options with a Microsoft-based system will be dependent on your application mix. Some DOS applications work well in emulation mode, but more hardware dependent applications might cause trouble.

Do not think that you are safe if the hardware has been updated? Not only are there hardware support costs to consider — if you can even find replacement parts — a more critical and costly problem is supporting legacy software and applications. If the application was written in-house, is the author still available to support it? If not, do you have enough documentation to support it now or in the future?

One of my clients was actually held hostage by a former employee who extorted the company every time they needed to run reports for their accounting system he had written. They finally replaced the entire system, but for several years, if they needed archive data, they were still stuck with his exorbitant rates.

Maybe you think you are okay because you purchased the software from a vendor. Is the company still in business? Even if it has not merged or disappeared into oblivion, does the vendor still support your version of the software? As more software companies are streamlining their operations, they are minimizing the number of costly legacy software versions they are willing to support.

Microsoft no longer supports relatively recent applications like NT and older versions of Office, which forces companies to upgrade. It can be nearly impossible to hire or contract for staff that knows your specific legacy application. How many people are willing to commit career suicide by being PS/2 or CP/M experts?

Parting Thoughts
Is it time for you to look at the sustainability of your IT systems? Keeping old systems running can be very costly in terms of potential business risk and maintenance expense. Here’s a checklist of things to consider when reviewing your business’s legacy IT solutions:

Is annual support less than the system replacement costs for both hardware and software?
If the current system support person were hit by a bus tomorrow, would you still be in business?
Can you easily find people with the skills to maintain either your hardware or software applications?
Does the original manufacturer still have replacement parts for your hardware or are you using hard-to-find third-party resources for parts?
Is the original vendor still in business and actively supporting your version of the system?

If you answered “no” to some of these questions, then you probably should be on the lookout for upgrading or replacing your legacy systems before they cause serious harm to your business. If you answered “yes,” to these questions, then your systems are probably fine for now, but stay alert for obsolescence by staying current on industry trends for your systems.

Beth Cohen is president of Luth Computer Specialists, a consulting practice specializing in IT infrastructure for smaller companies. She has been in the trenches supporting company IT infrastructure for over 20 years in a number of different fields including architecture, construction, engineering, software, telecommunications, and research. She is currently consulting, teaching college IT courses, and writing a book about IT for the small enterprise.

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