Managing Obsolescence

Obsolescence Management is the process of identifying, mitigating, and managing the risks associated with the obsolescence of materials, components, processes, skills, and software throughout the lifecycle of a product or system. It involves planning for and managing the entire lifecycle of a product or system, from design to end-of-life thereby ensuring that products remain functional and supportable despite the inevitable changes in technology and market conditions.

How Obsolescence Comes About

Obsolescence can occur due to several factors:

• Technological Advancements: New technologies can render existing ones obsolete.

• Business Changes: Existing solutions no longer meets current functional requirements or standards. Furthermore, newer solutions may be cheaper to operate than existing ones.

• Availability of skills: The skills needed to operate and keep systems operational no longer exist or are hard to find.

• Supply-chain issues: Suppliers may go out of business or stop producing certain components. Companies may cease production of certain components due to low demand or profitability issues. A supplier may rely on a supply chain for components and this point applies recursively to any supplier further down the line.

• Regulatory Changes: New regulations can make certain materials or processes non-compliant. It can introduce new regulatory requirements that existing technologies cannot deliver.

• Environmental shifts: Existing solutions may be inefficient to run, consuming excessive energy or requiring special environmental conditions.

Risks of IT Obsolescence

If an organization does not manage obsolescence, it can face several risks:

• Regulatory: Non-compliance with new regulations can lead to legal and financial penalties. For example, an obsolete system may have limitations on the RPO/RTO values it can achieve.

• Migration Costs: Porting data from obsolete systems to newer systems can be costly because additional efforts related to ETL would be required. Furthermore, obsolete systems may not have the necessary interfaces necessary to connect to newer systems.

• Maintenance/SLA: Critical systems may become unavailable if parts or support are no longer available. Suppliers may no longer be able to commit to the organisation’s SLA requirements.

• Cybersecurity: Obsolete systems may not have the same built-in protections to protect them against hacking and unauthorized access. Furthermore, obsolete systems may no longer be patched.

• Competitive Disadvantages: Inability to keep up with technological advancements can result in a loss of market share. Obsolete systems may be limited in performance, functionality and interconnectivity with newer systems.

• Data Loss: Old systems have a higher likelihood of failing. Sometimes replacement components can only be sourced as refurbished. RPO limitations is can also contribute to Data Losses that are greater than the organisation would like to have.

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