Core Systems Replacement

Patrick McConnell

This chapter will examine the risks involved in replacing probably the most important systems in any organisation: the core systems. core systems replacement (CSR) projects are notoriously risky, and this chapter will highlight the range of risks that can cause such programmes to fail using case studies such as Co-operative Bank and the Commonwealth Bank of Australia.

CSR: A STRATEGIC DECISION

Deciding to replace a firm’s core systems is possibly one of the riskiest strategic IT decisions that a board can make. The problem is one of maintaining a firm’s current IT model operating BAU effectively while a new IT model is first designed and implemented, and then business data and functionality is migrated to the desired IT model. It is similar to the apocryphal notion of “changing the engine while the plane is in flight”, the risk being that BAU may be disrupted during the several years of strategy execution, and as a result the strategy may get derailed.

As discussed in Chapter 4, CSR projects are particularly prone to failure as they are so risky. Documenting IT failures, particularly in government, IEEE (2015) observed that:

As hard as it is to build IT systems in the