IT Debt – Can IT Pay Its Own Way?

Introduction

Coined a few years ago to help measure a specific industry trend, the phrase ’IT Debt‘ is now a de-facto  term in the IT world. A quick Google search shows, however, that it is not well defined, and the phrase is often misused, misunderstood and applied generically instead of on a case-specific basis. This blog attempts to unpick the truth from the fable by defining IT Debt, and exploring its causes and the wider industry impact of such a phenomenon.

IT what?

‘IT Debt’ is well-established term promoted by Gartner in 2010 to apply a quantifiable measurement to the backlog of incomplete or yet-to-be-started IT change projects. The accompanying research reported a rise in the amount of unfinished IT activities, at a global, macro perspective. When they wrote their press release, Gartner had the “enterprise or public sector organization” front of mind as most likely to suffer from IT Debt, and were particularly focused on the backlog of application maintenance activities.

Let’s define those terms again here.

  • IT Backlog – outstanding work IT has to undertake in order to fulfil existing requirements
  • IT Debt – a quantifiable measurement of IT Backlog

IT Debt later started being used interchangeably with similarly debt-focused phrases, such as Technical Debt, IT backlog or – to borrow a phrase from Agile methodology – the stuff in the icebox. Looking objectively at the issue, it will be helpful to think of the IT Backlog as the focus of discussion – “IT Debt” is merely a way of measuring it.

How Did It Get Like This?

The concept of a lengthy ‘to do list’ is by no means a difficult one and is certainly not new in of itself. IT or Data Processing departments would have long maintained a list of work items, prioritized accordingly, and would be working through this list, in the same way any functional area of any organization might. The monetary value adds arguably greater clarity (and potentially therefore concern).

Of course this being an IT term, causative factors can be many and varied. There are a number of elements that can and will contribute to an organization’s IT Backlog in differing measures. It isn’t fuelled by a single element. It is not platform or technology specific. It builds up, application by application. The defining characteristic of a backlog is that it’s the cumulative effect of a number of contributory factors that have accrued over time.

The root causes for the IT Backlog not only unearthed by research but suggested by customers, partners and commentators are wide and varied. They include:

  • Historical IT investments The IT world is highly complex; supporting this complexity is an onerous task and previous IT investment decisions may have been a good idea at the time but are now a high ongoing burden to keep running – there’s more on this here. Gartner echoed this major ‘budget’ concern in their original research too.
  • Current IT prioritization With 70% of all IT spend typically going on keeping the lights on, further impetus on clearing the backlog isn’t perceived as being a revenue-generating activity, so it may go under the radar in favour of more customer or revenue-centric initiatives. A strategy that sensibly and appropriately invests in what is a housekeeping exercise is not easy to justify.
  • Human Resources The lack of appropriate skills is another potential issue, because identifying the solution is one thing but getting ‘your people’ to resolve it can be quite another. Building a solution to a requirement the basis of which requires very specific know-how might just be seen as too difficult or costly to resource.
  • Unplanned Backlog Pre-ordained, planned work on the backlog is one thing, but IT priority is seldom isolated from the business in this way. Organizations are at the mercy of shareholders, corporate events, regulatory bodies and even the judiciary. Compliance projects and M&A activities typically find their way to the top of the list unannounced, pushing other backlog activities further down the list.
  • New Technology / Innovation Many CIOs and IT Managers will point to the external pressures – such as the disruptive technologies companies must work with to maintain market share – that are causing them to delay other tasks.
  • Processes and Tooling Incumbent technology and tools are not necessarily set up to deal with a lengthy application maintenance shortfall. The efficiency or otherwise of the execution of IT changes will have a bearing on how much backlog can be reduced and when.
  • Improvement Process With no rigor for monitoring and controlling the application portfolio, it is often harder to plan and prioritize application backlog activities systemically. Gartner suggested this in 2010, and more recent research suggests that only half of organizations have an appropriate process for managing the portfolio this way.
  • Vendor Relationships Filtering the must-do from the nice-to-have and ensuring the right technical and 3rd party strategy is in place is an important IT task. Not adding to the longer-term backlog as a result of procurement decisions remains an important and ongoing challenge for the organization’s senior architects and decision makers.

This list is by no means exhaustive. In the whitepaper Modern Approaches to Rapid Application Modernization, IDC argue other potential culprits could include high maintenance costs, “rigid systems that remain resistant to change”, “lack of interoperability” and ”outdated user interface technology”.  Of course, the chances are that no two organizations will have the same blend of factors.  In truth, it’s going to be an unhelpful cocktail of any number of these issues. 

Wherever it resides it’s not a Mainframe Problem

If IT Backlogs exist, they obviously live somewhere. They pertain to or manifest themselves in certain corporate servers. Yet in the IDC report (see above), there is no mention of platform as a salient factor in shaping IT Backlog. No link at all.

The IT Backlog is simply the confluence of any number of factors – tools, process, people, politics, available cash, desire to change, strategy – that will contribute, in greater or lesser concentrations, to create an application maintenance shortfall of work. It doesn’t follow that mainframe owners, or those running ‘legacy’ applications, are grappling with IT Backlog more than anyone else. Indeed, frequently the opposite is true.

An IBM report, noted a positive ‘cost of ownership’ for their System z against distributed servers. It noted that consolidating servers increased IT staff productivity and reduced operational costs – keeping the lights on – by around 57%, further proof that neither the mainframe, nor alternative, mass-distribution systems are the culprit. Other research also highlighted other causes of IT Backlog, choosing to look beyond platforms and ‘legacy’ applications.

From our own research through Vanson Bourne, we surveyed the views of nearly 600 CIOs , which was captured in the whitepaper, The State of Enterprise IT: re-examining Attitudes to Core IT Systems,   IT Debt results by company size revealed an interesting perspective. While average estimates for IT Debt grow with company size, this trend only applies to the entire portfolio. Taking the mainframe portion alone, the largest companies actually witnessed a drop, making its percentage contribution towards the IT Debt much lower than the smaller companies.

Clear evidence shows us that IT Backlog is not mainframe-specific. Indeed, it should not be pinned to any given platform at all. Correlating any link between the choice of platform and the consequent presence of IT Debt is misleading.

Paying Your Way

The term IT Debt was introduced to provide some clarity and impetus to what was observed as a growing industry concern. Reactions to this were varied as the debate ensued, though most agreed it was an issue that would require attention.

In our view, the headlong rush to rip and replace perfectly good business applications (many of them COBOL based) and replace them with new code that may – or may not – do exactly the same job doesn’t seem wise. Swapping one problem for another is like clearing an overdraft with a loan you can’t pay back – with terrible consequences for your finances.

Taking a more balanced view of tackling the factors contributing the backlog avoids unnecessary risk in a long term strategy for operational improvement. And help is at hand to tackle many of the root causes.

Arguably the best place to start is with greater focus on the backlog at a systemic level. Isolating and planning backlog busting projects is facilitated by new incarnations of application knowledge technology, and smarter tools for making application changes.

Getting the work done needs the right resources. Lots of people are learning COBOL and many of the companies supposedly struggling with ‘legacy’ systems are at the forefront of the digital economy.

Longer term, training new generations of Enterprise techies is important. Efforts from Micro Focus and IBM’s master the mainframe initiative suggest that the problem is being met by some smart thinking all round, while the recent celebrations around the mainframe’s 50th birthday have added further impetus to a broader appreciation of the value of that platform.

You’re All Set

The phrase ‘IT Debt’ is surrounded by ambiguity, which hasn’t helped the industry understand the problem well. Conjecture over the relevance of underlying platform hasn’t helped either. Backlogs are caused by multifarious issues, and it is important to examine those causes within your organization, rather than reacting to the headline of IT Debt.

Today, establishing a successful mitigation strategy that tackles root causes is a genuine possibility.  The backlog burden need not be out of control. Embracing change by seeking to enhance existing, valuable IT assets using smarter processes and technology, enables backlog to be managed effectively, and without introducing risky, unnecessarily draconian change.

 

 

Beyond Terminal Emulation: Rumba+ looking good with Award-winning usability

We always said it – and now we can prove it. Rumba+ really does represent a class-leading Terminal Emulation and User Interface modernization solution. . Good enough to have won a 2014 Product of the Year Award from Mobility Tech Zone.

rumbachampionFrom who…?

Mobility Tech Zone is the go-to web resource for the mobile broadband industry. It’s a rolling feed of news, analysis, product info and downloadable resources for mobility and communications professionals. It has a clear focus on the innovations they need to overcome the challenges of disruptive technologies like BYOD and the rush to mobile.

Mobility Tech Zone is sponsored by TMC and Crossfire Media and TMC’s remit includes call center technologies, just one area where Rumba+ is proving to be a game-changer. It’s likely that the judges recognise the potential of Rumba+ to make a real difference to their specialist area. Maybe that’s why they were “very impressed” with Rumba+….

Award-winning mobility

Carl Ford, CEO and Community Developer, Crossfire Media, explains. “As leaders in the evolution to mobility we feel our award winners are delivering on enabling users by making carriers and enterprise networks capable of supporting our exponential data demands.”

In other words, Carl was looking for products that genuinely enable mobility in data transfer. That could almost be a product description for Rumba, which is bringing mobility to business applications and enabling a new view on established applications, bringing a fresh perspective on the world of green-screens – and all without changing a single line of code. Now that’s innovation.

As the Mobility Tech Zone award has recognised, Rumba delivers on the ‘enabling users’ aspect –major players like Allianz are accessing their core applications with user-friendly home tech, such as iPads, Windows and web browsers to slash ‘on-boarding’ times and boost business efficiency.

Meanwhile Aviva Italia have used Rumba+ to improve the user experience for the people who use their applications – improving their chances of recruiting and retaining industry talent, as digital expert Matt Ballantine notes on his blog. Many other Rumba+ customers enjoy the productivity gains and bypass the accessibility issues plaguing nearly half the companies appearing in the ‘IT Growth and Transformation’ survey recently commissioned by managed services firm Control Circle.

Achievable modernization from Rumba +

Similarly, this Vanson Bourne survey discovered that 54% of CIOs believe their green screens are “negatively impacting end user retention and recruitment”, while 98% of respondents recognise that new features would boost productivity but think modernization is too difficult. Well not anymore!

Rumba+ is risk-free, cost-effective technology that improves end-user efficiency without recoding. Need five more reasons to make the move? Try these.

Delivering modern user experiences is high on the CIO agenda. Rumba + consistently outperforms other products in the terminal emulation space, as Adam Rates, Senior IT Manager at Allianz UK notes in their case study …. and Mobility Tech Zone agree. Try it for yourself right here….

Rumba+

‘Will you walk with me Grasshopper?’

‘Will you walk with me Grasshopper?’ asked Po in the legendary cult Martial Arts series Kung-Fu, starring the almost-as-legendary David Carradine. The term ‘Grasshopper’ refers to a novice, a greenhorn, a student/disciple, a subordinate, or just simply ignorant. Someone who’s learning the ropes and needs that staple of virtually all movies – the master. You know the sort: the teacher, the-wise-old–seen-it-done-it-bought-the-T-shirt type person. Like Mr Miyagi, Yoda, disgruntled Korean War veteran Walt Kowalski in the Clint Eastwood classic Gran Torino, the spectral ancestry in Disney’s Mulan. George Lucas’ Jedi pass on their wisdom to the Padawan – the movie formula we all know and love in which the battle hardened veteran passes on knowledge to the next generation of talent.

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The Grace-Hopper-grasshopper connection

If the IT Industry was a made into a formulaic action movie – one of the glow-in-the-dark ancestors today’s IT grasshoppers would seek guidance from was also a war veteran. Despite being female and 793 years younger than Yoda, ‘amazing’ Grace was a rear Admiral in the US Navy, who’s birthday was ‘celebrated’ with a google-doodle this year!

GoogleDoodle

COBOL

Why this level of reverence from the grasshoppers? Because of her legacy – a legacy which thrives today.  COBOL remains portable, scalable, debuggable, easy to learn and is still the preferred language of business for the vast majority of the global Fortune 100. Grace’s guiding principles remain intact – and we all still rely on it on a daily basis! Ask yourselves which technologies born today are likely to be thriving in 55 years time? Once you’ve counted your answers candidly on one finger I am sure you’ll agree that COBOL and its founding-mother is an amazing story that deserves some telling.

The circle is now complete

Despite Grace’s amazing legacy no-one yet has really told her story on the silver screen. Sure there’ve been books, articles, blog posts now we may finally get ourselves a movie.

It’s certainly not going to be an action movie, or feature any fluorescent ghosts to guide the heroes. So what has inspired the makers and why now? Just like COBOL it’s a very easy thing to understand – according to Born with Curiosity Director, Melissa Pierce: “Steve Jobs had 8 films made about him, with another in pre-production! Without Grace Hopper, Steve might have been a door–to-door calculator salesman! Even with that fact, there isn’t one documentary about Grace and her legacy. It’s time to change that.”

It certainly is time – so how can we all help?

Get curious about the movie and help get it started – yes that does mean put your hand in your pocket and donate some of your hard earned dollars. But It’s not all one way traffic and you’ll get something back for your efforts in the shape of a perk related to your level of contribution.

Like the hundreds of people who’ve already weighed-in, I think it’s vital to help mark the legacy of a woman – who despite all the odds – made such a lasting contribution to Information Technology and society as whole. So dig deep and let’s get this intimate look at computer pioneer Amazing Grace and the impact she had on the history of computer programming into today’s cultural program.

Melissa, the ‘Born with Curiosity’ team, and everyone in IT from the legends through to the grasshoppers, will be extremely grateful.

Developer Days: Applications and Andy Warhol

So, the current season of ten Developer Day events has just wound up, and now all the presentations are done and the prizes handed out – what are the take-outs for Micro Focus?

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Well, they can’t be measured in numbers alone. Industry statistics about COBOL’s continued popularity may be interesting, but nothing beats hearing first-hand about the value our customers’ COBOL applications are delivering to their businesses. And while case studies are valuable, anecdotal material is priceless.

At Developer Days, we’re hearing from people getting great results using Visual COBOL systems on new platforms, such as .NET, Java Virtual Machine (JVM) and the cloud, as well as UNIX, Windows and Linux, without changing a single line of code. It’s good for the business-critical applications users already have, and those they will need in the future. After all, building applications is what COBOL is for. And how many other programming languages can boast 50 years of service?

The DNA of Business Applications

At Micro Focus, we think COBOL is the most valuable application development option available to our customers, and that’s what we are hearing at our Developer Days. These are real people talking about real world applications. Some are focussed on getting more out of their current business-critical applications, others want to implement innovation for the future. We don’t call it the Agent of Change for nothing.

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Gartner confirms the ongoing resilience of COBOL. They estimated that about 80% of the 300bn lines of computer code currently in use are COBOL. People are still hiring COBOL developers to work on new projects, and we’re using our own initiatives to ensure they’ll be there, supporting future business initiatives.

But COBOL is just for financial services, right?

Wrong. Sure, COBOL supports much of the world’s banking and insurance vertical markets, but it is at play in many of our customers’ applications and they shared some of the details with us at the developer day events. We serve a diverse client base. To quote a few examples, they are using COBOL to create apps that manage livestock genetic information across US, and play-by-play editing software for sports coaches, to quote two examples. Need more proof? We heard all about how Micro Focus COBOL development innovation is at work in so many situations. They included…

  • An application that manages ingredient supply chain across a New York Kosher store chain
  • An application to drive footwear inventory and retail POS in Massachusetts.
  • A Private Mortgage Insurance system in Boston
  • A Hospital Material Supply Management and Tracking application in Atlanta
  • An application to provide Boat Insurance in Washington, DC
  • A Life, Property, Casualty Insurance system  in the North East
  • An outdoor and hunting Sport Accessories Wholesaler and Distributor in Canada
  • An application providing County Government Citizen Services in Texas
  • A Retail food manufacturer and wholesaler system
  • A range of back-office applications for a major ISP and Communications provider
  • A range of internal systems supporting a global Automotive manufacturer and retailer

The customer view – Neil Willby

The recent UK Developer Day event saw a customer showcase presentation from Neil Willby, managing director for Eurorealm Consultants, an ISV specializing in accountancy software. Neil demonstrated how Eurorealm have gone from green-screen to Cloud and mobile, keeping pace with industry trends for four decades using innovative COBOL technology from Micro Focus.

Guess the brand

Some big names dropped by to our Dev Days. These are contemporary brands that recognise how their future could be written in a language half a century old. They include a major urban shoe retailer, a ‘star’ of the German car market and a company whose product featured in one of Andy Warhol’s most iconic paintings. Hundreds of attending customers recognise the potential value that Visual COBOL could bring to their applications and, by extension, their business.

Developer Days are now also attracting non-COBOL people with differing job descriptions, all interested in the possibilities that COBOL applications and data handling could offer them. Because there are more similarities between COBOL and modern data processing systems than you might think.

Better performance for more people

Micro Focus Visual COBOL uses the very latest technology to deliver industry-leading development and deployment tools across a variety of platforms for different skillsets. From business analyst and IT manager right through to developers – who can’t use dramatically-reduced development costs and improved application and organizational performance?

Come along and see for yourself. Share your COBOL story and see the possibilities that COBOL could offer your organization going forwards. We’re pulling together our programme of the Developer Days for 2014 and we’d love to see you there. Discover more here

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