Considering a New York Times Bits Blog article stating that enterprise-wide, IT spending will be $2.68 trillion in 2013, one would think the IT industry – with all its engineering nerd-brain powers – would be at the forefront of efficiency and automation. Curiously, this is not the case. Not even by a long shot. Not even remotely. Not even … well, you get the picture!
And if what Gartner writes is true, then 80% to 85% of an IT department’s budget is used simply to Keep The Lights On (KTLO).
Let’s allow these numbers to sink in appropriately, shall we: At least $2.68 TRILLION IN TOTAL SPENDING and 80% to 85% of IT BUDGETS USED ON WHAT IS ESSENTIALLY MAINTENANCE? That sounds like a winner to me! How many more zeroes can KTLO have?
All this money going to maintenance actually creates a second rail of inefficiency – a pileup of new requests made by the business that IT cannot deliver. This is the IT department’s backlog and is no small matter. It indicates lost productivity, an inability to innovate and the reflection of an IT department misaligned with its core business.
It is not merely a fact of functionality requests being stuck in a rut and arriving late that is the problem here. Here’s another industry stat attributed to Gartner: the backlog in most IT departments is actually compounding annually at a rate of 10% to 20% – meaning in the worst cases, a company’s backlog could double in five years!
So, to recap: trillions of dollars in spending, most of it going to maintenance, and an ever-increasing backlog.
Could it get worse?
Here’s the hat-trick! Any attempts to bring this backlog under control will bring with it a cost, the value of which is added to the KTLO. If an organization attempts to tackle its backlog by building apps in a fast and furious manner, it makes compromises that impact future IT debt. The conundrum is simple: IT departments can implement change requests quickly and create greater IT debt, or they can take their time, not empty their backlog fast enough and be accused of being unresponsive to the core business. Any attempt to fix the inefficiency problem potentially adds to it. Technical debt grows. Backlogs get bigger. IT is eventually left behind, unable to react to the needs of business.
Spend money. Lose ground. Disappoint management. Fail. Fail. And Fail.
Given the exorbitant amount of ducats in play, why would any organization close their eyes to so much wasted productivity and spending? Why would any organization continue along the same path expecting something different?
The way companies are currently dealing with their backlogs and technical debt is not working. It is an unsustainable business model that will render IT departments ineffectual and in danger of collapsing under their own weight.
This failure is not entirely IT’s fault. In fact IT departments are probably doing the best they can. The problem is simply that maintaining enterprise systems is extremely hard and therefore expensive.
The bigger and older the system is that needs to change, the more complex and costly that change will be. We all know how hard it is to reverse engineer thousands of lines of code to find the exact places where we need to apply the changes. And how hard it is to validate the impact of those changes across all application and system dependencies. And even when changes are ready and tested, how hard it is to deploy a new version into production.
Unless we solve the problem of the cost of change, we will not be able to reverse this downward spiral that is causing IT to fail miserably.
I’d make a suggestion, but this isn’t a sales pitch. It’s only the IT equivalent of a Public Service Announcement. An eye opening piece, really.
Happy Spending in 2013!