In this PDF from Deloitte, some of the compelling reasons for – and challenges of – legacy system replacement in the banking world are examined. While the focus of this PDF is specific to banking, the concerns and thought process behind system replacement are universal and revealing. Consider, for instance, that the problem currently is that core banking systems were designed in the 70’s and 80’s for foundational capabilities, but not the complex interactions experienced by business today. Also take into account the universal problem of new external pressures, such as regulatory requirements, increased competition, and customer demands. These are highlighted in this PDF but are experienced by almost all businesses looking to replace or enhance legacy systems. As a further example, consider this passage considering the benefits of replacing core IT systems: Although the cost of replacing a bank’s core IT systems tends to overshadow the savings and other tangible benefits, there are other critical benefits that must also be taken into account. For example, core system replacement helps a bank respond more effectively to competitive, market, and regulatory pressures. The rationalisation of redundant and manual back-office processes is also a significant driver of cost savings that is difficult to track using a traditional business case. Although these “soft” benefits are difficult to quantify, they are nonetheless very real – and extremely valuable. That’s why this report recommends presenting two views of the business case: one that includes only hard benefits and costs, and a second that also includes soft benefits. Although the second may be harder to defend, it may actually be more accurate and can be pivotal in helping the bank make the right decision. The PDF goes on to list concerns around organizational readiness, and unsurprisingly, business/IT alignment tops the list as a contributor to successful replacement of core systems. Add to the mix the need for proper stakeholder management and governance, and we see that all areas must consider the same elements in order to properly understand what must take place for a replacement of legacy systems.