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Case Study on Unity Bank

By sguduru Nov 09, 2014 948 Words
In the context of computing, A Legacy system refers to any outdated computer systems, programming languages or application software which are preferred instead of currently available latest upgraded versions. Every organization would start with a system from the initial start to come into existence and with the change in technology in this modern age there are vast advancements which leave these systems in terms of performance and efficiency. And if the organization continue using these systems which they have started with, it indicates that they are running on legacy systems. Every application and software package or a computer system would definitely undergo a change in its life cycle which makes organizations come to a situation to decide on “Whether to replace the existing legacy system or just refurbish it?” Legacy systems share similar characteristics regardless of industry, business, or application focus. Usually, these systems are more than seven years old, may or may not be mission critical, use outmoded or different proprietary technologies, have poorly structured program code, have ineffective reporting systems, and use system and human resources inefficiently. To further complicate these systems, the original design and development team may have changed, leaving the current support team without a complete understanding of the detailed operation of the system. In other words, legacy systems are usually the systems that everyone fears and no one wants to support. An old Enterprise Resource Planning (ERP) or Customer Relationship Management (CRM) package that may even still run on a mainframe are some of the typical examples we can consider for legacy system which every IT organization would come across whenever a new software version of the same comes into existence. This has been an issue for all the organizations and based on their strategic decisions the organizations either adopt the option of replacing the legacy system or refurbishing the existing system. For example if we consider an organization running on Siebel CRM package for their services side of business, and their majority of business relies on this package. With Siebel CRM losing the support required and new options like Salesforce and also SAP-CRM coming into existence gives the organization an edge to choose the best based on their financial and business need and replace the system. Now considering another organization running on an application package which utilizes Java 32-bit and now with the major code upgrades due release they determine that this would need a total change with existing hardware and also the configuration. This triggers the organization to refurbish the existing system to meet their needs by making changes accordingly to match the current setup and also to meet the new requirement. This can be a tailor made approach in re-designing the application package. And I would consider for every organization any of the below options listed in the table below would apply to act on a legacy system:

The major activities for replacement of any legacy system would include:
• Define/clarify corporate strategy. Develop a long term year plan that clearly defines the future vision and market strategy (e.g., organic growth vs. acquisition). Determine the best way to deliver products and services to customers.

• Understand current IT capabilities. Assess the current IT capabilities and identify critical gaps. Assess the suitability of the current systems infrastructure. Define the optimal enterprise architecture and develop a long-term IT and systems strategy.

• Ensure regulatory compliance. Make sure current Management Information Systems and regulatory reporting practices are effective and accurate. Improve compliance and risk management practices so it can meet expected regulatory requirements for the foreseeable future.

• Define a target operating model. Establish a programme management structure and governance model, and assign a project champion at the executive level. Decide whether to build the core systems in-house or purchase a vendor solution. Define a Target Operating Model for core systems that includes technology, operational, and governance dimensions.

• Position for growth. Assess the operational effectiveness and identify opportunities for efficiency improvement.
The refurbishment process encompasses (encapsulates) an entire system, which may be of any size or complexity. The refurbishment process also provides IS with the ability to evaluate its functional and technical attributes and recondition the system to improve cost and maintainability. The process comprises five key phases: preliminary inventory analysis, encapsulation, application analysis, production standardization, and design recovery.

There is no question that the costs and risks associated with core system replacement are high; however, in light of increasing customer expectations and competitive pressures, many organizations find that the costs and risks of inaction are even higher. If Information Systems is to play an active role in the effort to better control cost, then system refurbishment should be included as part of an overall cost-reduction plan. Systems refurbishment presents IS management with an effective approach to maintenance because it reduces the operating cost of systems, improves system maintainability, and positions systems to support the IS strategy as well as activities associated with business process reengineering, outsourcing, and downsizing.

Refurbishment may also avoid the cost of replacing a system with a purchased package that is in a similar state of disrepair.
There are some wonderful articles which support me to stick to my decision for refurbishment than replacement are listed below in the references section.

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