Estimating the Cost of Change
Application Assessment
Each of the technical options has a set of characteristics that help us understand the future costs of the system. At the first level of analysis, these generalizations help us to choose a preferred technical option. Below is a chart which scores the technical options on a scale of 1-5 to give some idea of the relative risks and costs associated with each option.
Although this is no more than a over-simplified example, it is still useful in that it provides a framework which can be used to compare the modernization options for any application. If you wish to download the spreadsheet then you can do that here : application assessment spreadsheet
Cost Observations
This chart raises some interesting points :
- It should come as no surprise that doing nothing -Remain- is the least cost option in the short term in this short-term simplistic view
- it may come as a small surprise that getting rid of an application -Retire- is actually more costly than letting it run - this is true for at least the short-term and possibly the medium term too; any change in a business will carry both risk and cost.
- Choosing to rebuild an application from scratch is high risk, high cost and will take a long time. This option should only be taken when there are no other alternatives
- Revise and Replace have similar scores - this reflects that pre-built applications and especially SaaS are increasingly the first choice and can make economic sense in an increasing number of functional areas
- Revise is comparatively costly and expensive as a result of the need to extend functionality to reflect business need - which is always a more costly endeavor than a straightforward technical change.
- Refactor is in a middle-ground option where IT impact and costs are relatively high, but business impact and costs are low and so may be a sweet-spot in many cases
- Rehost is clearly the cheapest option to move to cloud and is also minimal risk and can be achieved quickly and with little downtime