All custom legacy software needs changing, or so say our users. Sometimes they want a feature or two added and all that is necessary to change a bit of code, add a control, or some other minor upgrade task. Sometimes they want to ditch their error-prone VB5 desktop solution and rewrite the whole thing as a rich Web 2.0 ASP.NET MVC application. More often, however, the scope of changes to legacy functionality lies somewhere between these two extremes.
What rules of thumb to you use to decide whether you should upgrade an existing application or start from scratch?
This will sound cliche, BUT, go for standard cost/benefit analysis:
Take the cost of resources for the re-write (REALISTIC cost - meaning multiply your estimate by 3-5 times). This includes possibly needing to train other developers on your new chosen architecture/tools, AND the cost of re-training the users.
Take the resource cost from hard-to-implement changes anticipated in the next N months (based on your experience) - only counting the marginal cost (meaning, if the cost of a change in VB5 app is 1 week and the cost of that same feature to implement in rich Web 2.0 ASP.NET MVC application is 3 days, you count it as 2 days of savings). Add in projected benefit from new features the web 2.0 app will provide the users that VB5 app can not provide at all.
If the former is less than the latter, go for a re-write.