What Is IT Debt and How Is It Being Addressed?

addressing it debt

It’s well known that many IT budgets have been frozen or reduced over the last decade. The bulk of those cuts have been around maintenance and upgrades that keep application portfolios current and functioning. Issues caused by deferred maintenance are exacerbated by the absence of an application inventory and a structured review process for the application portfolio. Without this governance, there is no effective way for IT management teams to gauge the scope of the problem.

Content marketing agency Vanson Bourne recently conducted a global survey of 590 IT leaders on the concept of IT debt (the cost of clearing the backlog of IT maintenance to bring the application portfolio up-to-date). The survey found that IT debt is poorly understood and that those responsible for mainframe management are not regularly reviewing their portfolio of applications. Nearly half of CIOs surveyed didn’t have a structured process for measuring and managing their IT debt, and half of those don’t plan to implement a process. Gartner estimates the global IT debt at $500 billion.

To address IT debt, it is necessary to first size it through an application portfolio management process (APM). By understanding how applications deliver business requirements and identifying the gaps between current and required capabilities, the scope of the redundancy is revealed. Often during this evaluation, IT managers find all sorts of legacy applications they never knew existed as well as code that is never used (typically 30 percent of the code in a portfolio is unutilized). Specifically, APM enables this understanding by mapping the role of each application, including metrics like operating cost, risk, value, technical complexity, and the relationship of each system to other parts of the portfolio. It also pinpoints redundant and obsolete systems by locating unexecutable, inefficient, and duplicate source code. In some cases, a welcome surprise after applying APM is the discovery that the IT debt is actually smaller than feared. For example, in one case, a large US bank was able to in-source a previously outsourced application and, as a by-product, reduce the size of its application portfolio size by 40 percent—without migrating off the mainframe. In another instance, a leading distributor of medical and surgical supplies reduced a field modification project estimate from $2 million to $300,000 and its duration from six to two months by getting a detailed impact view of the required change—through the use of APM.

WHAT STEPS SHOULD A COMPANY TAKE TO REDUCE IT DEBT?

Implementing an effective APM practice to build an application information database is key. The business case for adopting APM is straightforward: IT will be able to deliver on its requirements in a more cost effective, timely, and accurate fashion.

  1. Build an inventory of the applications, using a vendor solution that offers a central repository with multiple user access and the ability to scale to enterprise requirements.
  2. Survey business and technical stakeholders to populate the repository with additional metrics to be overlaid on the “pure” application information captured through static source code analysis. This will result in dashboard views that will help decision makers to determine where modernization activity is most required and where it will yield the highest benefit to the business.
  3. Analyze the applications targeted for modernization in order to map architectural dependencies and assist developers in modifying these applications in an efficient manner without impacting operations.
  4. Produce an initial set of reports to understand the application inventory and the system dependencies. Use visual analytical tools to create diagrams depicting application relationships and map the business role of each technical object.
  5. Apply querying and impact analysis tools to provide in-depth views of programs and the impact changes will have on dependent objects like data fields passing or receiving values from an item of interest.
  6. Document program logic as represented by the source code in order to retain information for business analysts and future developers. This will also help identify the critical portions of an application that need to be rewritten or transferred to another platform (packaged or otherwise).

IT debt is estimated to grow on average by 9 percent over the next five years. The reality is that the majority of IT leaders aren’t undertaking comprehensive reviews and updates of their application portfolio. When CEOs and CFOs start demanding appropriate governance processes and provide the funding to make sure they are delivered, organizations will be in a much better position.

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Mannes Neuer
About Mannes Neuer 1 Article
Mannes Neuer is a product director at Micro Focus, responsible for the Enterprise Analyzer product line. Active in software product management, development, and consulting for more than two decades, Mannes has been involved with both conventional and rules-driven application development and deployment products as well as numerous IT development, project management, and consulting assignments. A Canadian-born resident of Issaquah in the Seattle, Washington, area, Mannes has a bachelor of science degree in computer science from the Hebrew University in Jerusalem, Israel.