Can spending less on legacy systems impact your ability to move a digital transformation agenda forward? While staying current may seem a low priority in an age where moving to cloud technologies is on the front burner, the decisions you make now about your legacy investments can drastically affect the future of your IT organization.
For example, perhaps your ERP system is several releases behind what is current in the marketplace, or so far behind that there is no upgrade path available. As this chronic underspend on legacy systems accumulates, this creates technical debt, says Barry Brunsman, principal, CIO Advisory at KPMG.
“In order to close the gap and make your technical environment current, you have to spend,” he explains. “You have to create currency before you can even begin to add function or other architectural features.”
Technical debt can also accumulate by spending money on the wrong things, because of timeline pressures or not understanding new technologies enough, adds Priya Emmanuel, managing director of cloud strategy and transformation at KPMG. “People make poor choices that create more costs for them in the long run,” she explains. “For large complex organizations, silos and shadow IT serve to add more technical debt with no accountability for paying it down.”
In order to support digital transformation, decisions must be made to pay down technical debt as a precursor to enabling some of the value business partners are expecting, says Brunsman: “Is the organization’s architecture anywhere close to what it needs to be to support emerging functional needs? The answer is almost always no, so there’s some amount of investment that’s required just to catch them up.”
This is particularly essential to succeed with cloud migration, says Emmanuel. Cloud is a technology that can enable digital transformation while also making both the application and infrastructure side current. But over the past 10 years, as cloud technology has evolved, companies often rush their efforts, thinking they can pay down their technical debt simply by moving to the cloud.
“What we’ve seen is that’s not how it works — you can’t put everything you have today on the cloud and think that somehow you can get rid of your current infrastructure debt,” she explains. Instead, organizations must be very thoughtful about their current technical debt and think about how to reconfigure the workload that you’re moving to the cloud. “If you haven’t really thought about it, you end up keeping your current infrastructure and adding a cost layer on top.”
On the one hand, the cloud offers the possibility for them to substantially pay down technical debt, adds Brunsman. “But they don’t understand at the application level what sort of decisions they need to take or changes they need to make, so they do some lifting and shifting of technology into a cloud situation,” he says. The result is new technical debt because now they need to fix something else in order to capture business value.
In Part 2 of this two-part series, stay tuned for major considerations organizations should keep in mind for the future of IT when it comes to technical debt and legacy systems.
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