it observer – legacy applications technology faces ‘pensions crisis

By | December 6, 2004

Research uncovers levels of IT burden created by legacy applications management

December 6th 2004 – London – Over 50 per cent of mission critical legacy applications in the UK are set for modernisation or retirement by 2008, presenting an immediate challenge for IT strategy, according to a research report published today. The Applications Intelligence Survey 2004, published today by Hal Knowledge Solutions, provides a snapshot of the challenges faced by organisations struggling to maintain legacy application infrastructures. With 60 per cent of high priority applications running on legacy architectures, the pressure to maintain and support the systems is increasing, as business drivers force dramatic IT change.

The survey, which petitioned 100 IT Directors from major enterprises on a number of issues facing legacy applications management, found that:

– 78 per cent of companies will retire parts of existing infrastructure by 2008 – the average amount of replacement being estimated at 34 per cent

– An additional 33 per cent of IT infrastructure is scheduled for modernisation

– 64 per cent of legacy infrastructure performs a mission critical function directly related to finance and corporate accounting

– 40 per cent of IT resources are dedicated to maintaining and supporting legacy applications

“The ‘Pensions Crisis’ in IT is created by the cost of maintaining ageing legacy applications, coupled with the volume of expected modernisation and retirement,” says Mark Kusionowicz, VP marketing, HAL Knowledge Solutions. “The essence of the challenge is that companies are exposing themselves to significant risk by not accounting properly for legacy applications activity and the long-winded, ad hoc approach to applications auditing is creating an unnecessary resource burden.”

The survey shows that large organisations are now having to respond to a number of business drivers, including IT/business alignment, Compliance and Outsourcing, to deliver on corporate strategy. This requires a gear change in how large IT systems are managed and accounted for. With some legacy applications being up to 25 years old, the complex applications evolution has created a jungle of mainframe and distributed network activity that presents big challenges for applications management. At least 60 per cent of IT directors in the survey agree that:

– Applications management is becoming more complex, creating a burden on IT resources

– An enterprise-wide view of legacy applications would be of strategic value to the business

– Increased efficiency in applications portfolio management would reduce IT costs

Forrester Research analyst, Phil Murphy, wrote that, “The application portfolio management market space will grow from approximately $15 million in 2003 to exceed $400 million by 2008. Too valuable to eliminate, too costly, complex, and interdependent to replace, existing IT applications consume a staggering 73% of application budgets. Organisations are embracing APM because it develops fact-based application metrics to drive intelligent decisions, aligns application strategies to business strategies, and increases maintenance productivity.” (Application Portfolio Management Tools, Forrester Research, Inc., April 2004.)

About HAL Knowledge Solutions™

HAL Knowledge Solutions is the market-leading provider of Application Portfolio Management software products and services that enable enterprises to reduce the cost of application support and maintenance while responding far more quickly to business and regulatory change. This is achieved by understanding the quality, nature and content of their complete application set and by analysing the productivity and value delivered by the internal or external IT functions working on these assets. Founded in 1984 and with investment from Apax Partners, HAL has offices in Germany, Italy, Spain, Switzerland, UK and Brazil with development laboratories located in Italy and Bulgaria.

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