Maintenance backlog poses serious risk to business systems, and corporations need to plan for application overhaul to address IT debt, said Gartner in a recent research report.
Thanks to a decade of shrinking IT budgets, the global IT debt will total
approximately $500 billion in 2010, said a
Gartner
analyst on Sept. 23.
The gap can potentially widen to $1 trillion by 2015, according to the
market research firm.
"This problem, hidden from sight, is getting bigger every year and more
difficult to deal with every year," said Andy Kyte, vice president and
Garner fellow.
Corporations have a list of maintenance tasks that need to be completed to
update all the applications to the most up-to-date version. It includes
decommissioning older hardware and updating everyone to the most recent version
of a software package.
IT debt
refers to the cost of clearing out this backlog.
When CIOs have a tight IT budget, or a reduced one from previous years, they
tend to fund the operational activities and put less critical projects on hold.
While deferring the tasks for a year or two won't pose a major risk to the
company, it becomes a ticking time bomb if the IT management doesn't track
application inventory or evaluate the portfolio on a regular basis.
"The bulk of the budget cut has fallen disproportionately on
maintenance activities-the upgrades that keep the application portfolio
up-to-date and fully supported," said Kyte.
One way to characterize this backlog is to see it as debt incurred in
previous years that needs to be paid off, said Gartner. Deciding not to update
the application defers the potential liability, but the business needs remain.
Additionally, investing in new projects for new functionality without updating
the older applications adds to the IT debt because IT departments have to
complete the upgrade process without breaking the new features.
Years of delayed IT upgrades combined with the recent economic slowdown have
put corporations so far off the maintenance cycle that business risks are
looming. Organizations have a set of critically dependent business
applications, such as e-mail, financial software or even the phone system.
While the systems continue to work and the employees get everything done,
the applications themselves are "suboptimial" if not updated
regularly with security patches, or upgraded to newer versions with added
functionality. Over time, they can become obsolete or fail, which can have
catastrophic consequences.
Gartner identified in the report
application
overhaul as a critical IT task for corporations over the next decade.
Kyte acknowledged IT debt will never be wiped out completely, even in a
strong economy, because IT departments will always prioritize certain
applications over others, but said the "scale of the problem is greater
than it has ever been."
Clearly, IT departments can't win, since if they focus on maintenance tasks,
they are criticized for not innovating or gaining competitive advantage. If
they focus on new projects and functionality, they are adding to the IT debt.
Gartner offered a recommendation of sorts to help managers and CIOs navigate
the tricky balance between maintenance and innovation. The IT department should
do a top-to-bottom review of the application portfolio and produce annual
status reports "detailing the number of applications in use, the number
acquired, the number decommissioned, and the current and projected costs of
both operating and sustaining or improving the integrity of the application
assets," the analysts said.
The annual status reports won't accomplish much on their own, since the
company still needs to prioritize maintenance over innovation, but it becomes
harder to ignore or overlook applications that need attention, said Kyte.
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