A re-platforming initiative that began with a clear business case, defined budget, and strong executive backing can quickly unravel as hidden complexities emerge. What appears to be a contained technology upgrade often expands into an organisation-wide transformation, driving costs far beyond initial estimates and pushing timelines off course. Internal teams becoming overstretched, external vendors introducing costly charges for change requests, and unforeseen challenges in data migration, integration dependencies, and legal complexities can all result in slow progress.
As delays mount and budgets escalate, leadership pressure intensifies, exposing a critical reality: the true cost of re-platforming lies not just in technology or vendor fees, but in evolving scope, resource strain, and the intricate demands of organisational change.
What starts as a technology upgrade often becomes a transformation of the entire organisation and that is where costs truly emerge.
Cost drivers
Organisations can build a clearer view of expected costs by identifying key cost drivers early on. Estimating the size of these costs is hard as demands shift when new obstacles and requirements emerge, but categorising these drivers help organisations structure their budgets.
People and expertise
This represents one of the largest cost components, covering all required internal resources involved in the project, whether full-time or part-time. Across the duration of the project and spanning all relevant departments, organisations typically allocate a significant share of their internal staffing capacity to support delivery.
Project management
Depending on internal capacity, organisations often need to bring in external project management support. For projects like the replacement of a core banking platform, general project management skills are rarely sufficient. The project will greatly benefit from experienced programme leads who have delivered similar transformations and have specific knowledge of the affected technology and processes.
Projective Group has extensive experience in managing large change projects within financial institutions.
Project vs. Run
It is highly likely that operations staff considered for the programme are already at full capacity with BAU activities. This creates immediate pressure on capacity and delivery.
External support is often required, and the sourcing strategy can have a significant impact. Some third parties have extensive experience with integrating specific solutions while others do not.
Depending on the sourcing approach, there is a risk that individuals may have limited familiarity with the organization or its products. As a result, they require close guidance from experienced staff, which is often underestimated in terms of time and effort. Organisations need to find the right balance, ensuring that enough employees are available to either do their own development work or effectively guide third-party developers on the various tasks.
Legal
While most organisations have a legal department, it is not uncommon that additional third-party legal support is brought in. Depending on the area, specialized expertise may be required. Legal has an especially important role during the initial contracting phase as it must ensure that the desired contractual safeguards are present in the contractual agreements which will protect your organization against unforeseen circumstances later on.
Technology and vendors
The new product, such as a new payment hub or case management platform, will be an important cost driver for your organization. Vendors apply different pricing models, leading to differing allocations across fixed and variable cost components.
This should be addressed during the RFP phase and aligned, as far as possible, with the organisation’s preferences.
We commonly see a fixed component like a license cost or subscription cost, as well as a variable fee based on a pay-per-use model. During the implementation, an additional implementation or support fee might be charged as well, these will make up a substantial part of the total cost.
The implementation of the new platform is likely to be accompanied by additional infrastructure costs. These include costs for new cloud, testing and integration facilities for example, which need to be installed and/or configured. The extent of these costs is dependent on the maturity of the organization and its familiarity with the new technology. The current infrastructure may not be compatible with the new out of the box solution.
There are two possible solutions to this issue, both will incur costs. The first option is investing in the required infrastructure and knowledge which will take time and resources that might not be available at that moment. The second option is outsourcing. Most vendors offer solutions for such issues and are keen to expand their service offering. The solution vendor might offer additional services that take the responsibility of connecting to this cloud provider out of your hands.
Change and adoption
With the many changes a new solution could bring to your organization, considerable effort is needed to adapt to these changes. Existing processes need to be amended and documented and related risk mitigating measures need to be adapted and validated.
Staff will have to be trained on the new solution, and customers will have to be informed. In some cases where the new solution causes significant product changes, entire repapering exercises are necessary (Repapering refers to updating or replacing contracts and formal documentation to reflect new operational or regulatory requirements).
With attention to operational readiness, change management and business adoption, you can increase engagement, avoid low adoption rates throughout the organization and ensure continuity after go-live.
Data and transition
A large-scale data migration is relatively rare and requires specialized knowledge and tools to successfully execute. As migration is often a topic of interest for external auditors, there is increased scrutiny on the correctness of the migration approach.
In many cases, third-party support is requested to take responsibility for this crucial part of the project. Specialized parties have proven frameworks, suitable tools for analysis and migration, and know exactly how to manage the many difficulties before, during and after migration. An additional benefit of this approach is that third parties might already have some experience with the target solution which can simplify or even speed up this part of the project.
After your organization has moved its operations to the new platform(s), there could still be some legacy systems in operation. Either because they are still necessary for the last remaining functionality or because there is a contractual agreement that is yet to be fulfilled. The process of decommissioning the remaining systems or data will incur some costs.
The hidden drivers: scope and change
Scope change is often underestimated in initial project cost calculations, yet it can have the greatest impact on programme outcomes.
In most programmes, cost overruns are not driven by technology, but by how scope evolves over time.
Big change projects often function as an engine for change within the organization. Other projects may align themselves with the programme which can easily add unforeseen demands and complications.
Without proper boundaries, project scopes can quickly expand beyond their original purpose with all costs and complexities that come along.
Even if you’ve gone through extensive requirement analysis, it is likely that the project will encounter situations where the new solution and the defined requirements do not match and a change is needed to accommodate your wishes.
Cost benefits
As the costs of re-platforming are high, you might be wondering what you will get out of it. Re-platforming projects bring major benefits and while these benefits can be difficult to quantify upfront, they are critical to long-term value.
Maintenance of legacy software
The increasing demands in terms of functionality, performance and security can no longer be supported by most legacy systems, with more incidents as a result. By moving to a modern solution, many of these costs could be greatly reduced. Especially with SaaS solutions, vendors usually release around 4 big updates per year that cover improvements and regulatory updates. While each update does require your organization to assess possible impacts on other systems and processes, it offers many benefits compared to the legacy software.
Regulatory compliance
If you’ve chosen to purchase a ready-made solution from a third party, you can benefit from the fact that the solution itself must adhere to various regulatory frameworks in order for it to be suitable for purchase. This means your organization will have to spend less effort on interpreting and translating regulatory requirements into the platform.
This does not mean that you lose all responsibility. As a customer and financial institution, you must still ensure that your organisation adheres to all regulations. Simply pointing towards the vendor’s responsibility is insufficient. On top of this, vendor solutions might be in line with broader regulatory frameworks but lack the specific stipulations set by local regulations. This could mean that the vendor’s solution works in a different way than desired when looking at it from this perspective.
Scalable resources
With a lot of legacy systems, the system resources are not as easily scaled up or down and to ensure that sufficient resources are always available, they are usually set up to be higher than the expected demand on these resources. As a result, organizations pay significant amounts of money for resources that are only truly utilized during extreme peak periods. Being able to quickly scale resources up and down means improved efficiency and lower costs.
Reduced incident occurrence
When legacy platforms reach their limits in terms of increased demand for functionality, security or performance, incidents may occur more frequently. When serious incidents pop up, it’s all hands on deck. Multiple employees or even whole teams across departments must drop all other activities to make sure the systems return to normal as quickly as possible, inform customers and manage complaints, and ensure that no data loss has transpired. Incidents resulting in lawsuits are incredibly expensive and will hurt your organization’s image to the outside world. High incident occurrence can also greatly impact employee happiness through prolonged or frequent exposure to high stress activities.
Improved operational efficiency
A new platform also gives you a unique opportunity to improve existing processes. With new functionality and the absence of outdated technology, new possibilities open up to increase the efficiency of your processes. By focussing on increased straight-through-processing, the amount of time spent on manual interventions by employees could be drastically reduced.
Key takeaways
- Understanding the real cost remains a challenge
Cost drivers, particularly internal inefficiencies, and benefit realisation are difficult to quantify and often underestimated.
- A strong business case helps maintain control
Developing a clear and structured business case forces organizations to define scope, quantify pain points, and maintain control over budget and delivery.
- Clarity drives decision-making and stakeholder support
A well-articulated business case translates technical and operational challenges into tangible impact, creating the foundation for informed decision-making and organizational buy-in.
Role of Projective Group
Re-platforming is rarely just a technology decision. It reshapes how an organisation operates, allocates resources and manages change.
The challenge is not only identifying costs but understanding where complexity builds over time and how this affects delivery.
Projective Group is well suited to this task and can help you work with financial institutions to identify and quantify costs, assess value drivers and develop robust business cases that support better decision-making.
How does this reflect your experience with re-platforming programmes?
