A time-shared computer system is disclosed in which computer software programs, either application programs or operating system programs, can be retrofitted with new programs which are totally incompatible with the old versions, all without interrupting service provided by the software programs. In a real time software system such as one providing telephone service, the processor (or processors in a multiprocessor system) is divided into two logical partitions. The old version of the software runs in one partition while the new version is loaded into and started up in the other partition. When the new version is verified to be properly operating, the data traffic is transferred from the old version parition to the new version partition in two steps. First the input data is switched to the new verison. When the transactions in progress in the old version are all completed, the output data is switched from the old version to the new version.This software retrofitting on the fly is disclosed in connection with a telephone transaction processing system used to support special telephone services such as dial 800 calls and credit card calls.