A global survey of 590 IT leaders released today uncovers the fact that IT debt (the cost of clearing the backlog of IT maintenance to bring the application portfolio up to date) is poorly understood and that those responsible for mainframe management are not robustly reviewing their portfolio of applications. Key findings include:
- On average, organizations have estimated their IT debt at $10.9 million, with $8.5 million (78%) attributed to mainframe applications
- IT debt is estimated to grow on average by 9% over the next 5 years
- 44% admit they don’t have a structured process for measuring and managing their IT debt or don’t know if they have one and 45% aren’t even planning to implement one
In fact, despite 87% of organizations claiming to have a structured review process and strategy for their application portfolio, which they review on average every four months, 57% admit to having an unclear picture:
- 1 in 20 admit their application portfolio is “a confusing mess”
- Nearly one fifth (18%) say their app portfolio contains legacy apps that no one knows how to update and that they are afraid to touch
- Nearly one fifth (18%) say their app portfolio contains redundant apps that are eating up unnecessary MIPS – but that they don’t have a means to identify and / or retire them
- 15% say M&A activity has created an unclear picture of what apps they’ve got, the relationship between those apps and what should be retired
What these figures illustrate, is that the majority of IT leaders aren’t undertaking comprehensive reviews and updates of their application portfolio; they are tinkering under the bonnet rather than actively ‘installing a new engine’. To counteract this trend, IT organizations need to transform from short-term, project-obsessed organizations to asset-obsessed ones, and proper investment in Application Portfolio Management (APM) is the key.
The challenge is that it’s difficult to attribute an immediate return on investment to APM given its mid to long term value, which sits at odds with the way most IT leaders are measured – on how well and how quickly they react to and deliver against short term changing business demands. It is the forward looking IT leaders of today that will stand out and break the cycle of short term needs response. Although no one gets hero status by understanding their existing application portfolio, it’s the only effective way to tackle the growing balance sheet liability of IT debt, and more importantly, set the IT organization up to deliver successfully against evolving business needs in the longer term.
Further information is included in the research, which you can find here, including details on the IT skills shortage and the application modernization conundrum.