Why Legacy Modernization Projects Fail

So, why do legacy modernization projects fail? It’s a complicated question with a surprising answer. And here’s the bottom line…. it’s rarely about the new system, the vendor, the contract or even the methodology.

M Corp focuses on legacy, analytics and readiness. We’ve studied what leads to success and what leads to problems. With over 100 successful projects completed, we have the experience to identify the critical issues that can determine whether a multimillion-dollar project is a chest-thumping, fist-raising success or another head-bowing, kick-the-wall failure.

Like any major project, whether it’s building a house or tackling a modernization project, a first-rate game plan and solid foundation are necessary.

Our goal is to improve the probability that your new technology will deliver as needed. We want all projects to be successful, so it’s helpful to discuss what has gone wrong in the past.

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Like any major project, whether it’s building a house or tackling a modernization project, a first-rate game plan and solid foundation are necessary.

With most of these projects, the client seeks to replace old technology with new. The reasons vary, but generally focus on increased functionality, reduced maintenance costs, improved availability of required skills in the market, or a desire for improved business efficiency. Often, the new technology will eliminate a 30-year-old – or even older – system (yep, a system installed when Ghostbusters topped the movies and music charts). For the most part, these decades-old systems worked — but are not well documented, not very user-friendly and occasionally made obsolete from regulatory requirements.

You can’t do things the old way

You often can’t do things the old way with a new system (just think how much personal computers have changed during the past 30 years, before Microsoft Windows), but that’s not the biggest challenge that you face. While there are certainly processes that you want and need to change when you adopt new technology, some things simply can’t change because of regulatory mandates or organizational constraints.

the-old-way
Often times, the old way of doing things just won’t work.

For example, program eligibility, benefits and payments are driven by business rules, not processes, and it is important that these be accurately reflected in your new system. Accurately capturing, configuring and programming the new system to implement these business rules – which number in the thousands for large programs – is no small feat.

There is the issue of data and how the business rules process that data – rarely understood and often complicated.

Then there is the issue of data and how the business rules process that data – rarely understood and often complicated. Numerous other issues also add to the challenges of major projects, including data stored in non-readable databases, last-minute changes, so-called work-arounds, system testing and even the need to find employees who have experience with the system.

But understanding the scope and complexity of your project, which allows you to properly plan and execute the work, is critically dependent upon doing so.

Project failure statistics suggest that scope leakage – the work that isn’t understood up front and doesn’t get done, for a variety of reasons, leads to projects don’t deliver the intended value. Worse, the underlying cause of scope leakage, a lack of understanding of the work to be performed, is insidious and affects the other pillars of a successfully project – schedule and budget adherence. Here’s how:

All too often, the first thing you are asked to do is develop a Master Project Schedule. You have to define activities, dependencies, dates – all without having a complete understanding of the most important driver, scope. It’s like agreeing to a cross-country drive without knowing where you will start the trip, the roads you should take, or the equipment you will need.

It’s no wonder that somewhere along the way you discover you took a wrong turn and have to work your way back to the correct path, which affects schedule, cost and sometimes means you have to reduce the scope of your effort to address the other constraints. Your cross-country trip just turned into nothing but a meandering journey to the Midwest.

Not failing is not success

Surprisingly, we often try to rationalize the failure. We made a trip! But not failing is NOT success, even if you do enjoy the view along the way.

These are all just symptoms. The cause? A lack of focus on the “as is” environment – an overzealous commitment to a big bang solution that focuses on the “to be” environment without fully understanding the starting point and the work to be performed.

As you can see, the question of why legacy modernization projects fail is a rather complicated and tricky one.

There are lots of ways to address the knowledge gap. Breaking projects into smaller pieces, with each informing the next, is one way. Starting with business rules extraction; taking incremental steps to modernize data and code; incorporating Proofs of Concept that use real data and real rules to determine solution fit is another – these are all effective at improving planning through gaining a better understanding of the project and avoiding scope leakage.

This is M Corp’s focus. We refer to this as Readiness, a proactive, aggressive and all-encompassing look at a project to determine what is needed – and even its chance of success. It’s admittedly a challenge and sometimes exposes difficult issues that need to be addressed, but better prepared projects will lead to more successful projects.

As you can see, the question of why legacy modernization projects fail is a rather complicated and tricky one. It’s a combination of factors, some that can be better controlled than others.

Our goal is to achieve success with each and every project, and we believe that taking some of the steps outlined above will greatly improve the outcome of these multimillion-dollar projects.

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