IT debt costing businesses billions

24 Sep 2010

Global IT debt could reach $500bn (around €373bn) this year, with the potential to reach $1trn (around €746bn) by 2015, recent research conducted by IT specialists Gartner Inc. suggests.

According to the research ‘Measure and Manage Your IT Debt’, IT debt can be “a hidden risk” and as businesses continue to invest and expand, the size of the IT debt grows; with additional functionality and complexity that has to be maintained and upgraded to a more reliable state at some point in the future.

IT debt as the cost of clearing the backlog of maintenance required to bring the corporate applications portfolio to a fully supported current release state and the scale of the maintenance backlog has created a systemic risk, according to the research.

IT budgets held

“Over the last decade, CIOs have frequently seen IT budgets held tight or even reduced. The reaction has been to still deliver quality of service for operational services and to use any potential project spend to deliver new functionality to the rest of the business,” said Andy Kyte, vice-president and Gartner fellow.

“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. There is little problem if this is done in one year, or even in two years, but year after year of deferred maintenance means that the application portfolio risks getting dangerously out of date.”

“Whether or not maintenance is deferred, the lack of application inventory and the absence of a structured review process for the application portfolio mean the IT management team is simply never aware of the true scale of the problem,” Kyte continued.

Gartner recommend IT leaders produce annual reports geared toward upper management, detailing the status of the application portfolio, the number of applications, and the current and projected costs of the application assets.