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Colour me slightly suspicious with your diagnosis of the fault with your first system :-)
Sorry - my box of crayons seems to be missing that colour ;-)
Why was the original project so hard to change?
See above. To change behaviour, I generally had to go through a dozen files (or more) to figure out the scope, even if I only had to end up changing a single file.
Was there duplication?
Somewhat surprisingly, no. The beginning phase set up a bunch of global variables, the middle phase used those variables, and the final phase ... also used those variables during cleanup. There was duplication that was outside of this project (that is, there was duplication of information, not code, between this project and other projects) which, due to the increased flexibility we now have, we don't need anymore (rather than hardcoding datapoint "X" in both the shell code and other code, we now have datapoint "X" in our data files, and use perl to extract it and generate the other code dynamically - still hardcoded, but a simple "make all" will get it all in sync).
Was there scope for refactoring?
I'm not entirely sure what this means. Probably not. ;-)
How did you know what flexibility you needed to add to the second system?
Years of experience with the original system seeing how requirements change over time, and seeing where requirements may change. Understanding the differences between limitations of the product space we're in vs assumptions based on the marketing decisions at the time. Rule #1 of the new code: no assumptions. We're not doing that perfectly yet, but I'm working on it.
Were there requirements that weren't made explicit in the first system?
At the time it was developed, long before I joined the company, the scope was incredibly small. So they did exactly what was needed at the time, no more. And it worked great. By the time I joined the team, it was already on the verge of bursting. But I didn't know that, so I kept using it.
After a couple of years at this, I gained enough experience to be able to see the larger design. (Note how I'm not claiming that it's the perfect design, just larger.) As I said above, the language, which may have been sufficient when we started, was part of the limitations of the existing system (imagine a complex data structure in shell - ewwww!). So a rewrite was necessary anyway.
The rewrite was a method by which we could gain the flexibility we required to meet needs that we often don't even know about until they're due. We've reduced the estimated effort (and, of course, the actual effort) required for changes by 50% or more on the development side, and we're working on the overall testing side as well.
As to the refactoring as the simplest way to get things to work comment. I completely agree - growing and refactoring are awesome ways to develop flexible high quality applications. But that's not the simplest way to get the immediate job accomplished. That's the simplest way to get the long term unknowns accomplished, but not all of my management chain is enthused about paying for "possible future" enhancements when they get in the way of an upcoming shipment, despite the promise that changes required (whether before or after the upcoming shipment) will cost 50% to 300% more than if we spent an extra 10% now.