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The One Idea Radical Enough to Solve the Trillion-Dollar IT Debt Crisis

/ November 14, 2013

Editor’s note: a version of this post was published December 16, 2013 on Sandhill.com. View that article.

There’s a massive, trillion-dollar problem building within IT organizations.  As a CIO, you’re likely already in the middle of it but perhaps unaware of the scale and impact on your organization and unsure how to address it.

According to Gartner, IT debt (“the cost of dealing with delayed and deferred maintenance of the application portfolio”) threatens to reach one trillion dollars globally by 2015.  The analyst firm notes that after a decade of tight budgets, the scale of the maintenance backlog has created a systemic risk that is going to significantly impact IT organizations.

Sources of Rapidly Growing Maintenance Backlogs

Sure, tight budgets are one reason why IT teams have been unable to keep pace with the growing maintenance backlog, but there are other factors at play here.  On the business side, the pace of change is accelerating—rapidly.  With multiple departments and business units seeking new sources of growth, innovation, and competitive advantage, demands for new applications and functionality are at an all-time high.  (As an aside, the accelerated pace of change is also shrinking timelines and heightening expectations, putting added pressure on IT.)

And then there’s the fact that IT, despite those tight budgets, continues to rely on decades-old application delivery methods: either customizing rigid legacy systems or coding custom applications.  These traditional approaches are fraught not only with cost but complexity and risk.  As a result, solutions can’t be delivered fast enough, changes can’t be introduced easily or frequently enough, and the maintenance backlog continues to grow rapidly.  Often, corners are cut and short-term compromises made at the expense of quality and future extensibility.  It’s no wonder that 94% of IT projects are in trouble or fail altogether.

What is a CIO to do?  After years and years of failed attempts, it is more than apparent that throwing more money or people at the problem isn’t the answer.  Gartner’s suggestions to develop an inventory of applications or publish an annual report on the status of the application portfolio help to shed light on the problem, but do very little to solve it.

Embrace Radically New App Delivery Approaches

There’s only one way IT organizations will ever be able to dig themselves out of this hole and solve the trillion-dollar IT debt crisis: fundamentally change the way they deliver applications.  Identifying small, incremental improvements to existing methods simply isn’t enough; the pace at which the deficit grows is accelerating and IT will never get ahead of business demands.  Instead, CIOs must embrace radically new application delivery approaches that eliminate all of the traditional bottlenecks and dramatically increase speed, efficiency, and output.

If you are serious about putting a dent in your own company’s pile of unpaid IT debts of application backlog, deferred app modernization, delayed maintenance and change requests, or ignored security and compliance concerns, you must be willing to disrupt the status quo within application development.   Here are four suggestions to help you chart a new course:

  • Accelerate Development by Canning Code – When you replace traditional coding with new, visual model-driven development, the application development process accelerates dramatically.  An analysis by the global system integrator Capgemini found that by changing to this development approach, development time decreases dramatically to only 2.5 hours per function point compared to 10.6 hours for Java and 15.5 hours for C#.  The reason is that the entire project team can much more quickly and efficiently create and collaborate on application models, intuitively understand the functionality, easily identify and make changes, and instantly run the working application.
  • Tap Non-Professional Developers – By some estimates, there are up to 10 times more non-professional developers than there are professional developers.  When you replace custom code with intuitive model-driven development, you can tap this pool of business engineers (as we like to call them) to dramatically increase development capacity, while still ensuring maintainability and control.  The result is more apps and functionality and because the business is more involved in the process, better outcomes.
  • Extend, Don’t Customize, Legacy Systems – Legacy systems are rigid and extremely difficult to customize.  Rather than pouring precious resources into long, complex customizations, consider adding an agile layer on top of these systems that allows your team to easily extend them with new functionality business users need.  For instance, a $17B manufacturer with 24 operating companies and dozens of SAP instances used Mendix to extend their legacy SAP systems, an approach that yielded substantial cost savings and a significant reduction in time to market.
  • Remove Technology and Infrastructure from the Equation – Technology, infrastructure and deployment issues should not slow a project down or even concern your development team.  Application developers are too often slowed down and distracted with database issues, infrastructure set-up, security concerns, and more.  Instead, consider deploying a platform that makes application deployment as easy as plugging an appliance into a power outlet.  For instance, with platforms where visual models are at the same time the actual running system, where the entire technology stack is already provided, and where operational tasks are automatically managed, you can deploy applications to the cloud literally with a single click.

The trillion-dollar IT debt crisis is staggering, but not hopeless.  There are ways to effectively address the rapidly growing mountain of debt; the key is to change the decades-old ways that got everybody into the hole in the first place.  It might sound too good to be true, but times have changed.  The idea of reinventing application delivery as we know it might be radical, but it is already being implemented by the CIOs who have found that it’s just the thing needed to get ahead of the demand and become a true partner to the business.