The Economics of Migration

Why automated migrations of Anubex make good business sense: The costs and savings of automated migration of software on legacy platforms to open systems.

Summary: Migration allows organisations to regain and implement full functionality quickly and at a low cost. Other alternatives are not only more expensive in terms of direct costs, but also bring the organisation a number of important indirect costs whereas the probability they will deliver only partial functionality is a near certitude.

I. The Life-cycle of an Information System

Every organisation is unique, and legacy systems that have a mission-critical function within them will always play an important role in supporting and enabling this uniqueness. As the world changes and organisations evolve, so too will the way in which organisations will seek to (re)define their uniqueness, and so too will the requirements placed on the organisations' mission-critical systems.

Information systems adapt to constantly evolving requirements through the process of maintenance. Through maintenance, or systems evolution, functionality is added to a system while at the same time the core of the system is kept.

Maintenance is a gradual, regular, controlled, and non-disruptive process. End-users of the maintained information system will always recognise the changes while at the same time recognising the core system.

Through maintenance, the life cycle of an information system is phased into releases. The retraining of users, as a rule, will be minimal, as the changes that are integrated into a release will normally be designed with the help of the users themselves.

II. The Redevelopment Trap

When the complex, mission-critical systems of an organisation run on platforms that become obsolete, a mistake that is often made is to revert to the replacement of these systems through the process of manual redevelopment. This is a costly, lengthy, and high-risk process, and is a trap that many organisations fall prey to.

Manual redevelopment can come in a number of guises, but each option carries the same high costs and the high risks of getting delivered behind schedule or with a reduced set of features. These guises include reprogramming, offshore development, or even extensive manual configuration of the standard functionality found in applications such as modern ERP, HR, or CRM products.

The graph above depicts the normal evolution of a redevelopment project (or a project of information systems revolution). For the duration of the redevelopment project, what often happens is that the rate at which functionality is added to the live system will decelerate, allowing the functionality of the new system to catch up. In effect, the aim of these projects will be to replace the functionality of a system on old or unsupported technology by reconstructing the same functionality on newer technology.

However, if a system has been maintained for many years with functionality being added at regular intervals, it becomes large and complex. Often, the resulting system will be too large and complex to redevelop completely in one project, and the new system will go live with functionality that is inferior to that of the old system.

The shaded area on the chart to the right represents a common evolution of the functionality gap between two systems during redevelopment:

III. The True Cost of Redevelopment

Organisations generally try to control the costs of projects by assigning budgets to them. While this is an effective method to keep a good check on direct costs, information systems redevelopment projects involve a number of important indirect costs that can be difficult to quantify. The two most important indirect costs the organisation will bear are the following:

Lost Investment
By the time the hardware or software platform on which mission-critical systems run become obsolete, it is normal that the environment has been completely written off. When this happens, it doesn't mean that the mission-critical system itself suddenly becomes worthless. If the system does the job and no issue can be found with the core functionality, the system will remain an asset for the organisation even if the hardware on which it runs doesn't.

As an asset, when mission-critical information systems evolve and adapt to changing organisational requirements over a period of many years, they not only reflect a changing culture within an organisation, but they become part of it. When these systems are replaced by new systems that do not leverage the investment put into the creation of the original system, the investment, simply, is lost. While it will be difficult for an organisation to measure the economic value of the system, the loss will often be considerable.

The Cost of Lost Functionality
If the experts can be believed, if a mission-critical system has over, say, one million lines of code, the chances of a redevelopment project being delivered on-time, with the all functionality present, varies somewhere between 5 - 10%.

With it being a near certitude that the new system will have features missing, it is important to calculate the indirect cost of how much money will be lost on finding out how the organisation can be efficiently managed without them. Once this has been calculated and determined, the next thing that needs to be calculated is the cost of retraining the users, first, to work with a completely new system, and second, to convince users to accept this system and to retrain them to perform their jobs with a reduced level of automation.

The graph above attempts to portray these costs in function of the evolution of the functionality gap, shown above.

IV. How Migration is Different

Systems migrations as made possible through the Anubex Migrations Toolkit are a cost-effective and low-risk alternative that reduces the direct costs and eliminates the two important indirect costs associated with systems redevelopment.

Reduced Direct Costs
First, the direct cost of migrations projects will be a fraction of those of redevelopment, as the use of automated conversion tools within the extensive Migrations Toolkit will eliminate much of the human factor that introduces uncertainty and error within the project. The use of tools in the project to automate data conversion, platform retargeting, language conversion of applications, and the management of the project itself, is the guarantee of speed, efficiency, consistency, and quality.

Eliminated Indirect Costs
Anubex Migrations eliminates indirect costs to the organisation, first, by eliminating the need to write-off the system as an asset. By re-using (or leveraging) the existing developments into the system on a new platform, the asset is retained and this unnecessary cost is eliminated. The second source of indirect costs, namely user retraining and business disruption once the new system goes live, is also removed. Because the new system, in its core, is the same system as it was previously, the users will accept what is in effect a completely "new" system the same way as they would accept a new release of their existing system, with minimal or no retraining being necessary. Business disruption is negligible as a result.

Beyond eliminating indirect costs, automated migrations done with a feature-rich migrations toolkit will provide an organisation with a host of indirect benefits. Here are two important examples:

  1. The Anubex Migrations Toolkit automatically generates a complete set of documentation for the system which is of great value to the organisation as future maintenance developments will happen more efficiently and with less risk of bugs;
  2. Through automated migrations with the Anubex Migrations Toolkit, the functionality of the system is actually enhanced in two ways. First, through desktop integration with Office applications, users gain the ability to exchange data from migrated programs with the desktop applications they are familiar with, such as word processing tools or spreadsheet applications. Secondly, all programs can run in a browser, meaning that the cost to rollout the system to new users or new workstations will be minimal. Since the entire migrated system can run securely over the Internet, the organisation will benefit further from the economies of the seamless integration of its supply chains and clients.

The graph above shows the evolution of a system in the context of a migrations project.

V. Conclusion

When assessing the bottom line of an information systems migration project done with the Anubex Migrations Toolkit as compared to that of systems redevelopment, a fundamental difference becomes obvious. When comparing direct costs of the project to the total cost to the organisation, it is clear that the direct costs and benefits of redevelopment have to be evaluated in function of the loss to the organisation. With migrations, lower direct costs must be considered in function of the preservation of the organisation's assets and the indirect and important benefits the organisation stands to gain.