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When legacy software collides with IP, creating new opportunities

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How quickly do words become overused? Pivot is one of those words now. It’s a word that seems to be used interchangeably for ‘doing things better’, or differently’. Given the ongoing impact of #WFH and the restrictions of doing business in a contactless manner, I’d like to throw in my hat with a reinvented ‘oldie’ as a way to do things ‘better’ or ‘differently’.

It’s not always about the new ‘technology’

I’ve had quite a few conversations in the last month with companies that are dealing with legacy inhouse software which is critical to keeping things moving on the factory floor. The conversation starts out with a ‘what to do with this piece of outdated programming’. It then evolves into a fresher perspective driven by a needs-must approach. Afterall ‘necessity is the mother of all invention right, particularly during a pandemic? 

History recap

If we roll back the clock by 5-10 years, the most common way to deal with a repetitive or manually intensive set of tasks was to create a Excel or Word macro or a custom program that solves a particular issue such integrating systems, or data conversion. An example would a planning solution to a product line solution which was often developed in-house.

Today, many businesses are still dependent on this piece of programming, to keep operations running smoothly. Yet over time, the detail relating to the need, the rationale, not to mention understanding how it was put together have been lost. 

Yet, this ‘orphaned’ software has successfully chugged along doing its job, only really being a point of discussion when it has either stopped working – and chaos has ensued, or the business needs have outgrown what it is currently doing. Often, the legacy software has been updated to reflect new process or improvements. With each update or tweak, more IP from your business is captured in your poor orphaned-legacy software. It’s seen as a problem rather than the holder of important information about your business. 

With each update or tweak, more IP from your business is captured in your poor orphaned-legacy software

When legacy software falls over, it triggers the discussion on how to replace the software piece or do things better. These conversations were happening before we started #WFH, what has now changed is the urgency in which a business is looking at how to change how they go about doing things. 

In the first instance we can help resuscitate and rejuvenate the legacy software to stabilise it and reduce the risk of relying on it. Then we can proceed to investigate the IP and help you make the most of the IP and data within the orphaned software. 

Welcome to your IP 

The original intent and design of your legacy inhouse software is often the bearer of a wealth of IP that you didn’t even know you had. This is where the discussion becomes much more interesting. It is understanding the IP held within your legacy software, that’s been captured over a long period of time gives rise to untapped potential!

Let me explain. If you have a piece of software that is doing something different, and does not exist in the marketplace currently, then you have IP!

With IP, you are now talking innovation and the potential to use government funding to develop the solution to replace your orphaned legacy inhouse software. This connection between R&D research dollars and legacy software as your IP, I believe, is missed by many companies. They are looking for the new and different way of doing things, yet the legacy inhouse software may contain all the answers, in both what it does and what it doesn’t do. 

The untapped opportunity 

Key is understanding what your IP is and this always starts with unpicking the legacy inhouse software and what it currently does. This task is where you can start the process of either simply doing it better, and innovating above and beyond what it currently does, or even looking for the opportunity to commercialise your solution further afield. 

The first step is always to produce a business specifications document that details the features, processes and technologies within the program. As part of this you will also need to do a full audit to understand any bugs or missing ‘functionality’ against your business needs. 

With your completed business requirements, you can now be clear on what opportunities you have. However, whether you can fund the work to replace your legacy software will hinge on being clear on what your unique IP is – and making sure there is no equivalent on the market currently. 

Once you understand the opportunity, you can then start building your solution, leveraging the R&D Tax Incentive Scheme, to fully fund the activity. 

How does the Australian Government Research & Development Tax Incentive Scheme work? 

This is a government scheme run by AusIndustry. It enables you, as a business to claim the cost of any ‘qualifying’ research and development and offset this against your company tax bill. The work must contribute to Australia’s IP and be a ‘benefit’.There are processes and documentation that must be kept to make sure you comply and ensure you will receive the maximum tax credits, but these are easily put in place once you’ve established exactly what you want to ‘develop’ as part of your IP.

Interested in knowing more? 

We are legacy inhouse software and R&D tax incentive specialists. We can help you to recover your orphaned legacy software to ensure it is operating at peak efficiency, and buy you the time to work out if you can leverage the IP within the software to benefit from the R&D tax incentive scheme to build its replacement. I’m always happy for a virtual chat. Just message or give me a call on 0403398807. 

If you have some legacy inhouse software and just want to know where to start to recover it, I have a handy software rescue triage approach which can quickly show how to get things in hand again. Grab the ebook here.

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