California’s Controller said it would take six months or more to reprogram their COBOL-based payroll system to issue minimum-wage checks to state workers, as planned by Governor Arnold Schwarzenegger. Replacing a massive system like California’s is expensive, but keeping a dying system on life support can be catastrophic.

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Forget Sarah Connor or the T-1000, the Terminator is facing a far more tenacious adversary these days–COBOL. California’s Republican Governor Arnold Schwarzenegger wants to issue minimum-wage checks to 200,000 state workers by the end of August. But according to The Sacramento Bee, Democratic state Controller John Chiang said the state would need at least six months to reprogram California’s COBOL-based payroll system to issue the minimum-wage checks.

Pushing IT beyond its limit

Chiang’s reluctance to implement Schwarzenegger’s plan may be more political than technical. But, there’s no denying that California’s reliance on a decades-old payroll system has turned a bureaucratic problem into a technical crisis. California’s not alone in this quandary. A great many businesses and large government agencies rely on archaic systems for daily operation. Why? Money and institutional inertia.

In describing the situation to The Sacramento Bee, Michael Cohen, director of state administration with the Legislative Analyst’s Office, said:

It’s an example of a number of computer systems in which the state made a large investment decades ago and has been keeping it going the last few years with duct tape.

When organizations make large capital investments, they want the assets to last as long as possible–whether it’s a new building or a network infrastructure. But, pushing systems too far past their intended lifespan has several negative consequences: increased risk of catastrophic failure, increased maintenance costs, increased incompatibility with newer systems, and significant inefficiency. Just read what writers for The Union-Tribune uncovered about San Diego’s antiquated IT system.

Change can be costly but is necessary

Some argue that sticking with existing systems, even when they’re held together with duct-tape, can have advantages over a new deployment. In his InfoWorld.com blog post on the California COBOL situation, Neil McAllister posits that the complexities and costs of replacing California’s payroll system may outweigh the costs of keeping the current system. McAllister sites an IDC study that examined the cost of developing and deploying in-house software. Interpreting the report, McAllister wrote:

It turns out that it isn’t the applications that are growing more complex, but the technologies themselves. Multicore processing, SOA, and Web 2.0 all contribute to rising software development costs, says IDC. In other words, new code is more expensive than old code. The more you take advantage of today’s hot new technologies, the more likely you are to experience development delays and software defects.

I have first-hand experience with large, expensive software development and deployment project–from both an IT and end-user perspective. I’ve seen ill-conceived and poorly managed projects run months past their completion date and thousands over budget. But, I’ve also seen the opposite. Just because developing and deploying a new system might be difficult, complex, and even more expensive than maintaining the status quo, sometimes it’s necessary. Consider the technological advances in automobiles over the past 50 years. Are modern cars more complex and more expensive to purchase and maintain than Ford’s Model T? Yes. But, today’s autos are safer, more comfortable, and more functional.

The bottom line for IT leaders

IT executives cannot ignore the substantial risks associated with pushing IT systems too far beyond their intended lifecycle. Nor should IT hold onto out-dated and dysfunctional systems because deploying a new system would be difficult or expensive. As California’s COBOL quandary demonstrates, duct-tape IT can turn a simple request into a technical crisis.