The South Australian Government pays out “at least” $20 million in additional vendor costs each year to maintain legacy systems, according to the state’s Auditor-General.
The review, outlined in a report by the state’s Auditor-General's Department, assessed 18 government agencies as a sample to gauge how the South Australian government is managing its legacy IT systems.
What was found was that additional vendor costs for legacy system maintenance and support, although considered to be difficult to quantify, were running up the state government “at least” an unaudited tally of $20 million in additional spend each year, according to the report — across the 18 agencies sampled in the review.
"We asked agencies about the vendor maintenance and support costs associated with managing their legacy systems. This includes their legacy applications, operating systems and databases. For the 18 sampled agencies, vendor support costs totalled around $20 million p.a. [per annum]," the report stated.
This total, however, does not include legacy support for agencies that did not engage additional vendor support and only had in-house support using internal resources.
The report also acknowledged that replacing the systems could cost the agencies more to upgrade or replace, but Auditor-General Andrew Richardson said that, despite the costs, agencies should be proactive in managing legacy systems and the risks that come with their use.
“[The agencies] should prepare business cases to help evaluate the feasibility of replacing these systems against other agency priorities,” he said in a letter addressed to the president and the speaker of the Adelaide parliament.
“We note that legacy systems are impacting current business operations and strategic objectives within agencies. They are also potentially increasing operational costs and exposing agencies to additional security risks.”
The bulk of the $20 million cost was associated with legacy applications at roughly $18.9 million, followed by extending support for operating systems at just over $1 million and then database extended support at $79,000.
In terms of the legacy applications, of which there were 215, 59 per cent, or roughly 127, were under vendor support arrangements, leaving 41 per cent, or about 88, unsupported. Of the latter figure, 34 per cent, or approximately 30, were labelled as key business applications.
In total, 82 per cent, or 177, of the applications were considered to be key.
However, there are plans to upgrade 162 of the legacy applications, with 55 to be upgraded and 107 to be outright replaced.
The remaining 53 however have no plans for to be upgraded or replaced, with 39 of these considered to be key business applications.
The report also went into the age of these applications, finding 26 per cent, or 55, were under 10 years old, while the remaining 74 per cent, or 160, ranged from 10 to 26 years old.