Practical example: Reorganisation of the IT application landscape
A modernisation project had cost EUR 28 million without any tangible progress. As an interim CTO, the first priority was to create transparency – and then to summon the courage to halt the project.
By Marc Wanderer, Senior Executive Advisor
The IT application landscape of an internationally active travel company with around 3,000 employees had been based on a legacy architecture (AS/400) for many years. This central system primarily supported the core operational process – tour management. Despite its long-standing importance, the IT infrastructure was technologically obsolete, no longer maintainable and was only kept running by a small group of specialists.
A modernisation project that had already been launched, which involved replacing the AS/400 system, had stalled. The chosen software development methodology proved unsuitable for managing the complexity of the project. Investments of EUR 28 million had so far yielded no tangible progress, and initial projections estimated total costs at around EUR 50 million. At the same time, day-to-day operations were increasingly suffering from scalability issues, bottlenecks and inefficient processes.
In this critical situation, I was appointed as CTO with the mandate to stabilise the situation, create transparency and develop a strategic basis for decision-making for the Board of Directors. The aim was to assume operational responsibility for the entire development team – comprising around 100 in-house and 80 external staff across eight international locations – to conduct a thorough assessment of project progress and to define strategic options for action.
The four-step process
- 1
Project analysis
Detailed analysis of the ongoing project: the development velocity to date was extrapolated, the remaining workload estimated and bottlenecks clearly identified. External experts validated the results to ensure objectivity.
- 2
Basis for decision-making by the board of directors
The situation was presented openly: the project was heading for failure, and further investment would have increased the risk exponentially. The recommendation was clear: to halt the project and write off the investment made to date as a ‘sunk cost’.
- 3
Reorganisation of the project team
Roles that were not strategically relevant were reduced, with the remaining resources focused on critical core tasks – in order to free up capacity for a new IT strategy.
- 4
Reorientation of the IT strategy
Evaluation of alternative solutions, including off-the-shelf software, partnerships with external specialists and modern architectural approaches. The aim is to create a scalable, maintainable system that ensures long-term competitiveness.
Results and success factors
The saying ‘If you’re riding a dead horse – get off’ aptly describes the situation. Although it had long been apparent internally that the project was heading for failure, there was a lack of courage to speak openly about it. Thanks to independent analysis, clear communication and courageous decision-making, further financial damage was averted.
The decision to terminate the project laid the foundations for a sustainable modernisation of the IT landscape. The strategic realignment now enables a realistic, stable and future-proof IT architecture. Thanks to this decisive intervention, the company was able to get its digital transformation back on track, improve scalability and efficiency, and ensure operational stability.
Practical insights for IT managers
- Assess projects realistically and communicate transparently – even when the truth is uncomfortable.
- Independent analyses build trust and provide a basis for decision-making.
- Courageous decisions, even if previous investments are ‘lost’, protect the company in the long term.
- Reorganisation and the focusing of resources are crucial for the sustainable implementation of strategy.
- Legacy systems require clear exit strategies in order to implement modernisation in a realistic manner.
