The in-house team at Cambridge-based Marshall Aerospace made the savings by eliminating communications costs with employees overseas and have added an estimated five years to the life of the software.
Consultant Richard Holway last month claimed that 50-year-old Cobol programmers could not be turned into Web designers overnight because the skills required were too different.
But Marshall's in-house IT team, including systems analysts and programmers who created the company's software almost a decade ago, have shown Holway's argument to be flawed.
Alan Paul, business information manager at Marshall, said, "If we hadn't Web-enabled the software, we would have come under pressure to introduce an enterprise resource planning package like SAP, but this would have involved a lot of expense and disruption.
"We are a conservative company and the idea of consultants coming in, roaming around and rewriting our business processes is just not on."