Improve Core Systems Replacement Success in Government

Adopting a holistic approach and a strategic shift-left mindset.

Analyst Perspective

Adopting a holistic approach and a strategic shift-left mindset.

To achieve successful core systems replacement in government, a comprehensive strategy that integrates both a holistic perspective and a strategic "shift-left" mindset is essential. The proposed strategic shift-left acknowledges the inherent challenges of core replacements often exceeding time and budget constraints, with the understanding that this issue tends to be particularly pronounced in the public sector. Nevertheless, the recommendations in the document are intended to help mitigate these risks.

The holistic approach involves aligning the core system replacement project with the strategic goals of the organization, ensuring that the selected solution not only meets immediate operational needs but also aligns with long-term objectives. This approach recognizes that not all aspects of successful core systems replacement can be addressed simultaneously and therefore incorporates three distinct time horizons: short-, mid-, and long-term planning.

In the short-term, the focus is on prioritizing current core system replacements, engaging in meticulous vendor selection, and establishing agile project management practices to address immediate project scope and collaborator needs. Mid-term planning involves laying the groundwork for upcoming core replacement projects, developing modernization strategies, and involving operations early to ensure continuous improvement and risk mitigation. The long-term vision encompasses addressing persistent issues in government core system replacements, establishing flexible funding, investing in skills, reinforcing oversight, managing technical debt, and implementing preventive measures for sustained success.

While a holistic strategy provides a solid foundation for core system replacement projects, it may not address all potential challenges that can arise during the implementation process. This is where the strategic shift-left mindset becomes crucial. By proactively identifying and mitigating risks early in the project lifecycle, governments can prevent issues from escalating and impacting project timelines and budgets. This proactive approach requires involving key collaborators from the outset, conducting thorough risk assessments, and implementing agile project management practices to adapt to changing requirements and circumstances.

By combining the holistic perspective with the strategic shift-left mindset and aligning actions across short-, mid-, and long-term horizons, governments can navigate the complexities of core system replacement projects more effectively, ensuring successful outcomes and long-term benefits for all collaborators involved.

Research Fellow, Industry Practice
Info-Tech Research Group

Navigating the high stakes of core system replacement

Challenges in government core system replacement projects

• Government infrastructure and core system play a significant and critical role in the functioning of governmental organizations and services delivery. Modernization projects typically constitute the highest level of capital investment that governments undertake, reflecting the substantial resources committed to modernizing essential infrastructure. Moreover, these initiatives are fraught with strategic and operational risks, given the complexity of transitioning from legacy systems to new technologies.
• The stakes are high, as failure to execute these projects effectively can disrupt essential services and erode public trust. Furthermore, the timeline for intervention is narrow, as by the time a project encounters significant issues, it often necessitates drastic measures like change requests, which can further escalate costs and delays.
• Understanding the challenges and strategies associated with core system replacement in government is thus crucial for ensuring the efficiency and reliability of public services.

Executive Summary

Info-Tech Insight

Success in public sector core system replacements hinges on a holistic and anticipatory shift-left approach, aligning goals with collaborator engagement, strategic vendor choices, effective implementation, ongoing optimization, and solid operational frameworks, thereby ensuring enhanced service delivery and increased collaborator contentment through early operational involvement and continuous refinement.

What does it mean to adopt a strategic shift-left mindset?

The concept of shift-left originated in the software development industry, particularly in software testing and quality assurance, with the aim of moving activities earlier in the development lifecycle to address issues promptly. Larry Smith is credited with coining the term "shift-left testing" in 2001. (Rd. Dobb’s Journal)

Early Intervention

• "Shift-left" originated in software development to stress early action and proactive solutions.
• Now, it's used in project management operations and IT to tackle issues early, boosting efficiency and effectiveness.

Strategic Shift-Left Mindset

• Adopting a strategic shift-left mindset for core system replacement means tackling issues early in development. Early testing, feedback, and collaboration help catch and fix problems before they become expensive or disruptive. This approach speeds up project delivery and ensures the new system meets collaborators’ needs.
• Engaging collaborators from the start is key, as it allows their input and ensures smoother project execution, leading to greater satisfaction with the final solution.

Other Components

• Early involvement of operations teams in core system replacement reduces implementation downtime by addressing operational challenges upfront.
• Aligning the modernization strategy with application performance monitoring (APM) principles optimizes application performance and user experience.
• Combining the strategic shift-left approach with collaborator engagement aligns replacement initiatives with organizational goals and best practices.
• However, solely relying on this approach may not solve large-scale project challenges. A more comprehensive "shift far to the left" approach may be necessary, involving thorough reform and re-evaluation throughout the project lifecycle.

Optimizing Success

• Early implementation of strategies like requirements analysis, prototyping, training, data migration planning, security compliance, performance testing, and documentation improves the success of core system replacement projects for government organizations.

Overcoming legacy system challenges: Balancing innovation and efficiency in government

1. Every executive is familiar with the issue. Public and private organizations aim to maximize returns on their investments in legacy systems. When they encounter limitations, they resort to patches or workarounds. While beneficial temporarily, these fixes can lead to incompatibilities among different layers of technology and applications. Over time, this may escalate operating costs and hinder opportunities for adopting more efficient and innovative digitization methods.
2. Outdated core systems can pose significant challenges for governments. Legacy systems may limit agility, hinder innovation, increase operating costs, and create incompatibilities within the technology stack and applications. These limitations can impede government organizations from responding quickly to events, adopting new technologies, and meeting customer expectations.
3. There are several options when replacing core systems; however, whatever the choice, it is critical for governments to understand the full tools and packages they are acquiring.
4. Issues such as delays, cost overruns, and governance challenges persist alongside prolonged decision making and consultant bait and switch maneuvers, compounded by excessive customization and vendor lock-ins, further exacerbated by time pressures leading to the accumulation of technical debt. These hurdles are compounded by resistance to change, hindering progress and coordination, while also highlighting the deficiency in technical expertise and skills within IT departments.

In 2024, legacy modernization holds the number four spot on NASCIO'S priority list

Legacy modernization has consistently been listed as a top priority for state CIOs and is expected to remain so. Without addressing systemic issues, it will continue to be a challenge.

2024 State CIO Top 10 Priorities

1. Cybersecurity and Risk Management (tied)
2. Digital Government/Digital Services (tied)
3. Artificial Intelligence/Machine Learning/Robotic Process Automation
4. Legacy Modernization
5. Workforce
6. Data Management/Data Analytics
7. Broadband/Wireless Connectivity
8. Identity and Access Management
9. Cloud Services
10. CIO as Broker/New Operating Model

Source: 2023 State CIO Survey; NASCIO

Examples of core systems

Core systems in government play a crucial role in managing various functions and services. While the specific systems may vary depending on the organization's needs, size, and priorities, there are common core systems typically found across governments.

What are examples of core systems?

1. Core systems are the backbone of governments, helping them efficiently manage various functions and services. While these systems can be customized to fit the specific needs of each municipality, they share essential components that are crucial for effective governance.
2. One of these essential components is the enterprise resource planning (ERP) system, which combines administrative functions like finance, human resources, procurement, and asset management. This integration streamlines operations, making government processes more efficient.
3. Another vital system is the customer relationship management (CRM) system, which focuses on managing interactions with citizens. It improves communication, tracks service requests, and builds positive relationships with the community.
4. Additionally, governments rely on various specialized systems such as financial management, public safety, education management, and health information systems to address specific needs within their jurisdiction. These core systems collectively ensure that governments run smoothly, provide better services, and communicate effectively with their citizens. The selection and customization of these systems are tailored to each organization's unique requirements and priorities.

Types of core systems (non exhaustive)

Why does government continue to use legacy systems?

Many factors contribute to the “kick the can” approach to modernization.

1. Decision-Making Challenges

   • Decision makers' lack of awareness about benefits and/or risks can delay recognizing the need for replacement.
   • Unclear business cases and competing priorities delay replacements.
   • Budget constraints often limit funds for comprehensive projects, affecting project scope and timeline.

2. Resistance to Change

   • Resistance to change from employees and collaborators further hinders decisions.
   • Employee training is vital for successful implementation, yet resistance to change can hinder adoption.

3. Legacy System Considerations

   • Replacing legacy systems can be expensive and time consuming.
   • Organizations may continue using existing systems to avoid migration costs if they still adequately fulfill operational needs.
   • Regulatory compliance must be maintained to avoid legal issues and protect data.
   • Data security during transition and robust measures for new systems are essential for protecting sensitive information.

4. System Complexity and Integration

   • Complex systems and significant customization needs can deter replacement efforts.
   • Integrating new systems with legacy ones requires careful planning to avoid disruptions, with data transfer carrying risks of loss or corruption.
   • Customization for government needs adds complexity, requiring careful planning to address technical debt.

5. Resource and Expertise Constraints

   • Lack of resources, vendor support, technical expertise, regulatory compliance, and proper change management further impede timely replacements.
   • Skill gaps may hinder ongoing support and maintenance, emphasizing the importance of training.