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Defining Your Tolerance Level for Legacy Modernization Projects

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For companies that insist on traditional legacy modernization projects – which can take years and involve a massive overhaul of the company’s infrastructure – project tolerances are a familiar concept.


According to research conducted by the Standish Group, less than a third of all IT projects were successfully completed on time and on budget! Executives routinely begin projects expecting to go over budget and past the completion date – unless they’re part of the 75% of IT executives who anticipate their software projects will fail.

If this is the case, IT professionals may need to take a step back and decide how much they can take. Better yet, their supervisors need to assess how much they are willing to take before throwing in the towel. It’s time to define your project tolerances.

Project tolerances define the range within which the project constraints can move without (1) having to gain approval from the higher ups to continue or (2) abandoning the effort altogether.

3 Different Types of Project Tolerance

There are three types of project tolerances that companies must account for:

  1. Schedule Tolerance: The amount of time a project can be behind schedule without reassessment.
  2. Cost Tolerance: The amount a project can go over-budget before raising an alarm.
  3. Scope Tolerance: The most difficult to specify, scope tolerance is the amount the organization can tolerate requirements changes mid-project before management or executives must get involved.

In 2004, the IRS became very familiar with the idea when their 3-year, $8 billion legacy modernization project. It was huge in scope by any measure – it was an attempt to modernize the Master File, the database storing and managing the taxpaying histories of 227 million individuals and corporations for the past 40 years. After years of delays and cost overruns, where management changed several times and fingers were pointed in a dozen different directions, the project was finally finished.

Tips for Keeping Your Legacy Modernization Project in Check

Here are a few things to consider to keep your projects in check:

  • Understand the level of support and involvement necessary from management. According to the University of Ottawa, 33% of projects fail because of a lack of involvement from senior management. Therefore, it is important to understand the kind of support you need up front and to secure stakeholder buy-in before you commit your own resources. After all, if senior management can’t make time for it, why should you?
  • Gain a full view of where the project is and where it needs to go. If the scope of a project feels too large to see it from end-to-end, chances are it is too large to succeed. Many groups are more successful when they jettison the “all or nothing” approach to modernization (we’re going to modernize the entire IRS) and begin instead with a pilot project with a clearly defined set of deliverables. Using project management tools to chart your progress along the way will help you define more realistic timelines for the next project in line.
  • Outline the risks involved with the project and the impact exceeding project tolerances might cause. To fully plan for project tolerance, it’s important to understand the economic risks if the project doesn’t meet its expected ROI and the business risks related to services, markets or competitors.

Another consideration organizations should make when planning for project tolerance is whether a traditional legacy modernization approach is right for their company. Instead, using API standards-based, open standards legacy modernization to build on your existing legacy systems can help save time and costs while still achieving the end result.

Modernization Use Case Example: The Airport Authority

The Airport Authority showed the benefit of this approach when they underwent the modernization of their legacy workforce management solutions in order to be compatible with today’s mobile browsers. By utilizing APIs with an open standards legacy modernization solution the Airport Authority completed their project in just a week. Needless to say, it stayed within the schedule tolerance range.

IT managers are resistant to legacy modernization projects because they ran out of tolerance for them years ago. However, it isn’t 2004 anymore, and modern IT departments have new options that make it easier to modernize their legacy systems, while still remaining within budget, schedule and scope.

What are your top project tolerance concerns when you undergo a new venture?


Tags: Legacy Modernization, Integration

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