Economic Downturn - Rip & Replace!
October 30th, 2008
We are seeing a lot of chatter right now in the blogosphere about the impact of the economic downturn on IT spending and strategy. Lots of stats as to how the spending is going to change, how to invest during the downturn, and what posture will be most effective. Some of us who have been through this before, and were in need of any significant reduction in spend have a clear answer - rip & replace!
Nothing is as compelling as economic necessity to advance change to the status quo. In a prior post here I cover the clear advantages of moving to SaaS and open source solutions within the IT portfolio. For those who have not taken these steps, now is still a good time. What I have found in the past is that when you do the math, you can in fact lower cost by taking on a new implementation project to replace a legacy system that is expensive to maintain, even during period of tight spending.
An easy example of this was at my last company when we ripped out our project accounting solution, replacing it with a SaaS based solution, and at the same time moved the remaining financials to an on demand offering. The cost of the implmentation project plus the first year subscription was less than the maintenance fees on the licenses and the associated DBA costs during the first year alone. There was a one time write off of the now unused portion of the legacy asset, and we were done. Best yet, the consumers of the new solution preferred it to the legacy model, and we gained all the benefits of a focused SaaS vendor solution vs. the old platform. Say ‘Yes’ to R&R!
