Cost-Benefit Analysis for Modernizing a Large-Scale Industrial System

Kazuki Yokoi, Eunjong Choi, Norihiro Yoshida, Joji Okada, Yoshiki Higo

Abstract: Legacy systems pose significant challenges to companies. Software modernization approaches have been proposed to address this issue. However, a lack of standardization and reliance on ad hoc processes often lead to software modernization failures. Incremental modernization, a strategy that improves software systems in a step-by-step manner rather than attempting to simultaneously overhaul the entire system, aims to mitigate the risk of failure. However, this approach can increase costs owing to the complexity of integrating legacy and modernized products. In this paper, we present a case study that employs a cost-benefit estimation analysis in a large-scale industrial project that underwent incremental modernization in the past. We compare the actual and estimated cost-benefit values in the context of incremental modernization. As a result, we confirmed that the cost estimates were valid, but we could not judge whether the benefit estimates were valid.