You are here

What Are Legacy IT Systems Costing You?

States face tough decisions on whether to modernize, consolidate or hunt for COBOL programmers to manage aging systems.

Migrating to the cloud can be easier said than done for states grappling with the dilemma of having countless legacy systems, but dwindling budgets to fund modernization projects.

Finding the money is only half the battle. These legacy systems can’t be ripped out and replaced overnight. Recruiting and compensating staff to support aging applications is challenging and costly, especially as seasoned programmers retire.

“They’re seeing the potential for a mass exodus of those seasoned COBOL 74 programmers that are basically keeping all of those legacy environments running and humming,” said Doug Robinson, executive director of the National Association of State Chief Information Officers.

Many state governments are feeling the pinch as older workers retire and years’ worth of COBOL knowledge walks out the door with them. The federal government is facing a similar challenge.

Nationwide, roughly 30 percent of state IT workers are eligible to retire, and that number will likely reach 50 percent by 2020, Robinson said during a Feb. 3 panel discussion at the Governing Outlook 2015: State and Local Market Forecast conference in Washington, D.C.

Missouri CIO Tim Robyn said his state’s IT workforce is proactively addressing the retirement wave. The state is reducing staffing requirements by consolidating more than a dozen IT units into a single agency and decreasing the number of data centers from 15 to one. “It takes a lot fewer people to operate one data center,” he said. As people retired or left Missouri’s Information Technology Services Division, positions were not backfilled. Robyn said consolidation led to more robust and higher quality services because employees are learning specialized skills.

Modernizing Legacy Systems Isn’t Cheap

In Washington state, IT officials are deciding what to do with the state’s 619 legacy systems, which account for more than a third of all software systems.

NBC television affiliate KING-5 in Seattle spoke with government employees and state Rep. Zack Hudgins, who heads the House’s General Government and Information Technology Committee, about the headaches that legacy systems have caused staff and residents.

“Old systems and these legacy systems can slow down government, and it takes a lot of time and money to keep them updated,” Hudgins told KING 5.

Rough estimates show that replacing all legacy systems could cost between $568 million and $2.8 billion, according to a November 2014 report to the state Legislature. Modernizing the state’s 343 mission-critical legacy IT systems alone is projected to cost $485 million to $2.4 billion.

The state’s classification of legacy systems is about more than age or the programming language used to write software code. Washington state’s Office of the Chief Information Officer (OCIO) also considers whether a system can be easily updated, if there are adequate staff to support the system and whether the system poses security risks or made businesses processes more complex.

Washington state’s Automated Client Eligibility System is one example. The system is written in COBOL and can be updated with the help of contracted staff, but it won’t be easy. “It is getting increasingly difficult to find COBOL programmers,” the report notes.

The report includes several recommendations for dealing with aging systems and preventing others from becoming legacy systems:

• Reduce the risk of system failure by improving documentation, capturing system information from departing staff and incrementally rewriting or improving system code when possible.

• Increase standardization across the enterprise when appropriate.

• Develop modernization projects that use an agile approach to deliver incremental value more quickly.

• Consider migrating to Software-as-a-Service (SaaS) or commercial-off-the-shelf (COTS) deployment.

Ryan McVay/thinkstock
Feb 09 2015