Many IT organizations are overly focused on which tactical step to take next and are missing the ever-worsening bigger picture with respect to IT modernization, according to Gartner Inc. Gartner foresees a confluence of trends that, if ignored, will leave many organizations unable to respond effectively to business demands.
"We are seeing the IT conversation dominated by what projects to do next, status of existing projects and talk of maintenance efforts," said Scott Nelson, managing vice-president at Gartner. "The danger is that many organizations are doing the equivalent of looking down at each step they take, rather than picking their heads up and seeing where the steps are leading. For many companies, the potential for an IT train wreck is significant if the warning signs are not heeded."
"It is easy for companies to turn a blind eye to changes in the IT application landscape, but these systemic changes are unavoidable and companies that ignore the signs will have problems with their application strategies," said Val Sribar, group vice president at Gartner. "Understanding the key signs of change in applications will help companies develop effective plans to modernize their application environment."
In order to help organizations recognize the signs of potential danger, Gartner has identified 10 key indicators:
Sign No.1: Skills Shortage. Many organizations are investing huge budgets in hiring programmers to keep an old system running. Instead, companies need a strategy for supporting the business that fully exploits, for as long as possible, the investment in the old system, but which also recognizes that a replacement system strategy is also needed.
Sign No. 2: Vendor/Product Consolidation/Support. As the number of vendors consolidates and products age, those products are retired by the acquiring company and taken off support status, with the result of increasing maintenance charges with little in the way of incremental functionality. However, companies often depend on these applications, and switching to a new application is both inconvenient and resource intensive. In some cases it requires resources that the IT group does not have and as a result, companies work harder to maintain more outdated but mission-critical applications.
Sign No. 3: Agility Metrics Decay. Agility metrics for making a business changes decay as systems become more brittle and the "piling on effect" worsens. Consequently, the business cannot afford to change because the IT organization can't support the changes. The result is a loss of business agility in an increasingly agile world.
Sign No. 4: Operation Expenses Escalate. Operation expenses become a larger portion of the IT budget as the piling on effect worsens. As a result there are little resources -- money, people or time -- to work on anything new.
Sign No. 5: Aging Technology Portfolio. The aging technology portfolio drifts further away from the desired "future state" architecture standards. The technology vision laid out by the enterprise architects becomes impossible to achieve. The result is an increasingly outdated set of systems and infrastructure that becomes the source of more problems.
Sign No.6: Difficult to Access Information. Information becomes increasingly difficult to access and analyze as data structures age. Modern business users are highly information-dependent. As the data becomes more out of date, less accurate and more difficult to access, the business is increasingly forced to work without the information needed to make decisions.
Sign No. 7: Legacy Capacity Risk. Legacy capacity needs increase as new interfaces, such as Web connections, drive up transaction volumes, resulting in greater spending on traditional processing and storage and so forth. Ironically, this legacy capacity is usually priced at a premium compared with newer technologies riding the consumerization curve.
Sign No. 8: Regulatory Compliance Issues/Risks Increase. Compliance is an issue even in traditional lightly
regulated industries, and legislation shows that any company may be at the mercy of outdated systems that can't meet the needs of increased regulations.
Sign No. 9: IT Costs Increase, Agility Decreases. Direct business purchasing of IT-related services drives up central IT costs and drives agility downward.
Sign No.10: Green IT. Today's CIOs are likely to have targets that will involve substantial infrastructure changes to achieve green IT objectives. These changes will almost inevitably carry implications for the application portfolio.
To avoid the so called IT train wreck, Gartner advises that organizations put IT strategic planning, rather than tactical budgeting at the heart of the CIO management agenda.
"By developing an application strategy and focusing on retiring older systems, CIOs will be best placed to fund an IT modernization program that works to drive the IT organization to achieve a desired state," said Andy Kyte, vice president and Gartner Fellow.
Gartner analysts will provide more detailed analysis on IT modernization at the upcoming Gartner Symposium/ITxpo 2008, taking place October 12-16 in Orlando, Fla.