Technical Debt – Out of the Red and into the Black

 

Charts

It’s probably no surprise to learn that there’s technical debt in most application portfolios.

Technical debt isn’t a new concept; it’s been around since the early 90s. And for most IT organizations, it’s par for the course – an unavoidable consequence of decades of technology investment. Very often, the volume – and state – of IT portfolios and applications is overwhelming.

Technical debt occurs on several levels. There are large-scale IT investments that were right at the time, but have become out of date due to the relentless pace of technological change. There are also highly customized applications that can’t be easily upgraded and enhanced.

Just like financial debt, technical debt can make it virtually impossible to obtain funding to invest in new projects. We’ve already discussed the ever-increasing challenges faced by CIOs to do more with less – a daunting prospect, given that only around a fifth of their budget is available for investment in transformation. It’s not surprising that many CIOs feel the rest of the business doesn’t understand the constraints they are working within.

For them, the path to IT innovation must seem like a slow climb.

But the concept of technical debt can be harnessed by the CIO to highlight the issues facing them and their teams, enhance the CEO’s and the rest of the organization’s understanding of IT delivery, and highlight the need for modernization to actually help fund the next set of innovative IT projects.

Out of the Red 

Whatever the reason for technical debt, application rationalization represents a logical solution to the age-old problem of budget constraints and breaking even – a goal shared by CIOs and CEOs alike.

The life of existing applications can be extended through rationalization and modernization – by consolidating similar applications, replacing or eliminating out-of-date applications and migrating and modernizing others across to more up-to-date platforms and languages to reduce operational risk.

For example, eliminating redundant and obsolete legacy applications and the associated infrastructure can result in a staggering 20 to 30 percent reduction in total cost of ownership, helping to drastically reduce technical debt and get IT departments back into the black.

Into the Black

In a nutshell, rationalization services can lead to incremental yet significant long-term savings, which can be reinvested into re-architecting existing IT environments and supporting next-generation enterprise development.

And as I’ve said before, the best application modernization program is a self-funding program, where the end result is a debt-free application portfolio that fully supports business growth, and balances the goals and aspirations of the CEO with the ability of the CIO to deliver on transformation programs.

In other words, the best of both worlds.


By Mike G. Williams, General Manager, Application Modernization and Cloud, CSC

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