All IT organizations have some amount of legacy with which they have to deal. The older the organization the more legacy that is built up. Where organizations have merged, the legacy has increased even further. Various surveys have shown that IT functions spend up to 70% of their budget on the legacy in infrastructure
If this legacy is consuming well over half of your budget shouldn’t it be consuming half of your attention? How much time do you spend evaluating that 60 to 70% of the budget that is keeping the lights on? This is exacerbated by the need to constantly upgrade parts of that legacy which increases cost
without adding any additional value to the organization. It is this growth without value that drives Finance crazy and leads them to conclude that IT is out of control.
It is vital that IT organizations do an effective job of managing their portfolio of legacy applications and technology. This cannot be done solely by focusing on technology. It must be done by focusing on the value that is created by that legacy. By presenting not just the cost side of the legacy but the value which it creates, the CIO can get the organization to make strategic decisions about this significant cost that is the IT budget.
This Portfolio Management not only provides the justification for that expense, but is the basis by which the legacy can be pruned. It is not uncommon to find the legacy applications that have been around for years are actually producing little,
or even negative, value. Cutting loose these boat anchors not only frees up budget but it frees up staff to focus on strategic objectives.
Portfolio Management of the legacy is a key component of the imperative for IT to produce real business value.
Rob Collins, December 16, 2016