Following on from my previous blog post, I am going to relate a rather extreme story of what happens when you fail to keep up with the IT market place, fail to update your software and keep your IT portfolio current. This is a real story that occurred in a bank.
Over the years what was a cheap and effective piece of software grew in cost year after year to become a big financial burden. The 30 customers replaced the software with other more up to date versions or alternatives. At the end the bank in questions was being charged more than €8 million per annum simply because they were the only ones using the software – even the vendor wanted them to get rid of it. A decision a few years earlier to put in place replacement projects would have avoided a massive bill. The vendor knew that the replacement project was becoming harder and harder and could price accordingly. Worse still, the vendor had only one programmer available. The original developer had now retired, so not only was the bill huge but the operational and maintenance service was, of course, disastrous. To compound things the replacement project had to be run in the middle of a massive market change making it twice as risky and difficult.