The True Cost of Standing Still

As the saying goes, nothing lasts forever. But in the case of core, cherished business systems, they’ve laughed in the face of convention and outlasted any reasonable prediction of their tenure. So, surely another year or two of plodding along the same path won’t hurt.  

It is worth looking into it further. So, here’s the question: If you aren’t proactively modernizing your core IT systems, what might happen?  

We Are Fine as We Are!

Regardless of when they were originally created, for most mission-critical business apps, the business requirements are changing constantly and the need for continued maintenance and evolution creates an ongoing treadmill of change.  

Whether its new technology requirements, user interfaces, platforms (such as hybrid cloud), additional regulations, changing workforce, agile development, major modernization programs, technical debt, a variety of factors influence the need to improve how core applications (often mainframe or midrange) need to evolve.  

Very few organizations will have a totally isolated, unchanging application landscape. Even if they are just being maintained, there is still a need to do that quickly, correctly, and efficiently. 

This Should Be Getting Easier!

Despite the significant budget invested in the staffing, hardware, and software of core business systems—which will often be one of the largest IT expenditure items—it feels like it is never enough.  

And if you have nagging concern that the task of keeping the core systems up to date and on top of new requirements is getting harder and harder to achieve, you’re not alone. The often unstated, hidden cost of maintaining a technical status quo in terms of core systems maintenance is on the rise, and worryingly high.  

All too frequently, these factors are not identified, their cost not calculated, and the IT team—and as a result the organization they support—falls further behind the market expectation.  

Where Are We Failing?

Getting a sense of the scale of the impact of inaction, let’s try to qualify some of those factors.

Technical Debt

The growing list of requirements, improvements, and features—requested but not yet implemented in a core IT system—constitutes what is termed technical debt. This includes connecting with external systems or interfaces to support a more digital-savvy part of the IT domain, as the whole organization looks to meet its modern-day needs.  

The accepted wisdom is that technical debt is a major cost burden, a Forbes article declaring “consumes nearly one-third of technology budgets and more than one-fifth of technology professionals’ time.”

A separate report on technical debt by DXC further highlighted the concern, explaining “pockets of outdated tech, code, practices or ways of working … block the path to innovation, with 46 percent of IT executives noting they 'very often encounter restrictions' or that 'tech debt has a dramatic effect' on their organization’s ability to pursue digital transformation.”  

Widening Skills Gap  

With years and years of value delivered by a long-standing IT system, it is small wonder that those who originally built it may have moved on—or even retired. That lost institutional knowledge creates a gap that only sensible succession planning, training and mentoring programs, only rarely established at the required levels, can solve at source. Most IT teams are understaffed in terms of core application skills, and the longer it is left, the harder it will be to attract staff to these roles.

Integration Limitation  

Most modern developers of digital systems think it is table stakes to ensure that connectivity and integration between one system and another is wired into the delivery of any solution. APIs, containers, and all manner of other technology are used to ensure connectivity across departments, regions and even organizations.  

In the core systems world, making all that happen is also possible, but the effort involved is far greater. The mainframe infrastructure was conceived as a central island, housing everything to which everyone connected. That’s not how modern organizations work, requiring mainframes or midrange systems to play alongside other infrastructure components. It is all possible—but it takes time, multiple teams, designing and testing for multiple points of failure.  

Rising Cost of Provision

Studies show that mainframe revenues are healthy, and the same cohort of suppliers and service partners exist. That is true. If you compare that market with other enterprise software market segments—whether development tools, ERP/CRM systems, or databases—the number of options available is bewilderingly high by comparison. The elephant in the room is that, while there’s evidence to suggest that the hardware itself is keenly priced, there are question marks about the high maintenance fees of some mainframe software. Overall, the cost of provision for these core IT systems is not going to get cheaper, compared with other environments where the competitive nature is yielding terrific value for money opportunities for IT buyers.  

Missed Opportunities

Finally, and a close relation to more than one of the issues above, is the hard-to-measure question of "lost opportunity." If we had invested in modernization by now, what could we have achieved? And, therefore, what quantitative measurement can be calculated based on the absence of something? It is often the incubator or innovation projects, which are often speculative or investigative in nature, that are first to have their funding pulled by higher priority business-as-usual project requirements. Considering what the business has failed to proactively address through modernization can reveal the true extent of ramifications of delay.

Each organization will take a different perspective on each issue, calculating project costs accordingly. Building a fiscal model to consider these areas could shine a light on many undocumented impacts.

The Best Time to Plant a Tree Was Yesterday

Smaller projects are easier to manage. The long-running study called The Standish Group CHAOS Report refers to their proposed approach to IT system delivery as one of endless flow—a constant set of incremental changes. Similarly, the Agile Manifesto warned against the evils of large-scale waterfall projects. Deliver value quickly and regularly, they both say.  

Core systems today suffer from operational inefficiencies. And for some organizations, given the budgets, the situation is deteriorating—which is why it is increasingly hard to evolve and maintain at the pace of change the organization demands.  

Much of this is well understood, but a useful restatement because it explains the rise and rise of the discipline of application modernization, the aim of which is to help eradicate the fundamental challenges facing core systems delivery today by implementing a pragmatic, manageable, fact-based approach to incremental improvement and modernization.

Rolling Stones or Status Quo?

Defending the status quo becomes increasingly hard to justify the longer you go on. Yet the prospect of a seismic change to working practices, technology and skills—when there is so much else to do already—it is not surprising the modernization is often considered, then delayed...before being considered again later.  

But the challenge doesn’t go away and for each delay in a decision, there are direct, measurable consequences—the hidden costs of delay—an examination of which might provide the right impetus for action.