Global 'IT debt' hits $500 billion, on the way to $1 trillion

A backlog of maintenance needed to bring all applications up to date poses a serious risk to business systems, Gartner says

By Jon Brodkin | Network World

Global "IT debt" will reach $500 billion this year and could rise to $1 trillion by 2015, Gartner analysts have estimated.
IT debt is essentially the cost of maintenance needed to bring all applications up to date. Five-hundred billion dollars would be needed to clear "the backlog of maintenance … required to bringthe corporate applications portfolio to a fully supported current release state," Gartner says.

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IT debt as Gartner defines it is unlikely to be wiped out completely, even in stronger economic times, because technology departments will always prioritize certain applications over others. But Gartner -- which also recently advised CIOs to plan for a second recession -- claims the debt is higher than ever before and that the maintenance backlog represents a serious risk to business systems.

Over the last decade, IT budget cuts have "fallen disproportionately on maintenance activities -- the upgrades that keep the application portfolio up-to-date and fully supported," Gartner says. "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two years, but year after year of deferred maintenance means that the application portfolio risks getting dangerously out of date."

"While it is true that there has never been an IT organization without a backlog of maintenance activity, the scale of the problem is significantly greater than it has ever been," the analyst firm also says.
Perhaps understandably, IT departments have been focusing on projects that "deliver new functionality to the rest of the business," rather than keeping all old systems fully up-to-date, according to the analyst firm.
This is an interesting counterpoint to another oft-complained-about problem, that IT departments have been unable to innovate because they devote the vast majority of their budgets to maintaining existing systems.
IT departments can seemingly never win, because even when they focus on building new systems, they are potentially boosting the IT debt "because the additional functionality and complexity will need to be maintained and upgraded to a more-reliable state at some point in the future," Gartner says.While the entire IT debt, or maintenance backlog, isn't likely to grow much smaller IT departments could at least do a better job cataloguing the problem. Gartner recommends producing annual status reports on the state of the application portfolio, "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 issue is not just that maintenance keeps on getting deferred, it is that the lack of an application inventory and the absence of a structured review process for the application portfolio," Gartner says. "This means the IT management team is simply never aware of the true scale of the problem. This problem, hidden from sight, is getting bigger every year and more difficult to deal with every year."
http://www.infoworld.com/d/adventures-in-it/global-it-debt-hits-500-billion-the-way-1-trillion-470?source=IFWNLE_nlt_wrapup_2010-09-25