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Sunday, January 12, 2014

How Effective are Your Systems?

Many companies today are using systems that were built 20, 30, or even 40 or 50 years ago and modified constantly over time as the business has changed.

It is time to stand back and take an objective look at the functionality and cost effectiveness of these systems.  In all too many companies, both corporate and IT management avoid the thought of making major changes to their computer systems and adopt the infamous adage:


Well, guess what?  If your systems have been around for many years they are very likely broke and very likely costing you a fortune for systems that do not meet today's business requirements.  Have you heard young people say why can't we have this, or why doesn't the system do that?  The answer seems to be it just does...

In today's world of constant change, you cannot leave your systems alone, but must at a minimum modify them to meet current regulatory requirements or other pressing and mandatory changes demanded by your business operations.  How long does a change take to make?  What does it cost you?  What risk do you incur when modifying old systems.  In this and the following series of blog posts, I will attempt to address some of these issues.  My new book "Managing Computer Systems in the 21st Century" ( give you a step by step approach to assessing your systems.

In my book I describe the following methodology for assessing your systems and formulating a strategic plan to insure your systems meet your needs.  It includes the following elements:

IT Governance

Make sure that you have a strong set of IT governance processes and procedures in place that insure that your board of directors (or owners) and your senior business executives are not only involved but in direct control of all system initiatives and expenditures.  Your IT organization should be providing services, not dictating what should be done...  The business must control all IT expenditures and initiatives...

Validate Your System Requirements

Meet with key functional area (i.e. the head of sales, marketing, operations, accounting, etc.) executives and determine what their expectations of computer systems support for their area of the company are and should be.  Additionally obtain their opinion of how well existing systems are meeting these objectives.  Identify additional people within the executives organization and in the operational areas of the company to interview to drill deeper into the system requirements.  The objective of this process is to collect requirements from the users as to what the systems should be doing, how well they are doing it, and what could be better or is missing.

Assess the Systems

Look at the programming languages the systems were written in, the quality of the code, the number of defects reported, the severity of the defects, the frequency defects are reported, and the time and cost to resolve defects.  Also look at the number of enhancement requests implemented over the previous year and how many are in a queue waiting to be implemented.  If the queue is significant determine the reasons for the delay.

Look at the computer hardware and the cost of the hardware required to support each system.  In addition to the actual system and hardware, look at the cost of middleware such as database management systems application servers, etc. required to support the system.  Look at the people required to support the physical environment and keep the systems running.

Also determine if there any features in the systems that make them unique or provide a specific competitive advantage over other companies of the same type.

Assess Your IT Department

Collect a skills inventory from the people who work in IT and evaluate the workload of each person and any objective metrics of quality and productivity.  How many projects they have worked on, duration, defects, etc.

Evaluate your Assessment Data

Based on the data you have collected determine how well each system meets the business requirements you have identified and how reliable each system is as well as the cost of the system.  Look at the cost and value based on modern alternatives.

The result of this assessment is to determine whether systems are cost effective and meet business requirements or need to be replaced or perhaps modernized.  Additional work may be required if modernization is an option to determine the cost of modernization.

All of this should result in a business centric strategic plan to modernize your IT organization and computer systems.  It may involve outsourcing and replacing employees with external contractors.  It may involve purchasing new systems or using open source software.  It may also involve looking at cloud computing and moving from company owned hardware to reputable cloud provider systems.

A key issue is who helps you do the assessment.  You need someone who is objective and has no preconceived notions of the outcome...

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