Legacy Application Support

With the move to large integrated software suites, some companies have chosen to outsource support of their legacy applications. Like data center operations, the rationale includes the fact that support of these "sunset systems" is not a core competency.

A company might choose to outsource legacy systems if any of the following are true:

1. It wants its internal IT staff to focus on other work, such as the implementation of a new packaged system or the development of Webenabled applications. Most IT managers will attest to the fact that it is difficult for staff to meet project deadlines when they are also responsible for maintaining production systems, because production problems are a higher priority than new work. Although it is possible to minimize permanent staff involvement by using staff augmentation, concerns about co-employment and the desire to eliminate the day-to-day management of these employees makes outsourcing a more appropriate choice.

2. The company wants to ensure that the old systems are shut down when the new ones are installed. Many companies have a poor history of retiring old systems, even after the new ones have been in operation for several months. To achieve the cost savings projected for the new system, it is often vital that duplicate systems be eliminated. When a company pays an outside company to support the systems, costs are more visible and easier to eliminate.

3. It fears the flight of key employees who are supporting the legacy systems. In a tight job market, employees who fear that their jobs may be eliminated when a system is retired, or who prefer system development to maintenance, will leave. By transferring responsibility to a service provider with expertise in system support and a large staff, the company has reduced its risk.

The primary concerns associated with outsourcing of legacy systems are:

1. The vendor may not have staff with the needed technical expertise. This is particularly true for very old systems, which may have been written in arcane languages on now obsolete equipment.

2. The learning curve for the vendor's staff may be steep, because many legacy systems were either developed in-house or are highly customized versions of packaged software. In these cases, the vendor would have to train staff, rather than having people with the needed expertise ready to deploy on the engagement.

3. Costs may be higher than the current internal costs. This is often true in short engagements, or when the company has been operating with a lean staff. Outsourcers typically achieve rapid cost savings on commodity functions, which legacy systems are not. Otherwise, they depend on engagements of three to five years for cost efficiencies.

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Outsourcing Blueprint

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