It’s often been said that CIOs possess a unique view of their organizations: An unmatched purview into the innerworkings of most every department.

Yet some of those vistas can be troubling. For instance, CIOs today have a view into their enterprise application portfolios—and what many are seeing is excessive, redundant and legacy software that, in some cases, is diverting IT’s attention away from new and innovative business projects.

That’s according to a new global survey from HP and Capgemini, which found that companies—especially large ones—have a real app-hoarding problem on their hands: for some, an astounding 10,000 applications to support inside their enterprises. At the same time, many of these companies are reluctant to sunset their old apps, which only adds to IT expense. (It’s kind of like those of us who, upon examining our closets, lament all those “What was I thinking?” clothing purchases from the 1980s while also avoiding the fact that you still can’t part with those now 25-year-old outfits.)

A sampling from the Application Landscape Report survey (which included interviews and surveys of 100 CIOs) results:

Help! 85 percent of respondents say their application portfolios are in need of rationalization.

Too Many Apps. Almost 60 percent of enterprise companies say they currently support “more” or “far more” applications than are necessary to run their business.

Time to Retire. Half agree that up to 50 percent of their application portfolio needs to be retired.

“Just in Case.” 61 percent say they keep all data beyond its expiration date “just in case.”

Mission Critical? Just 4 percent of respondents say that every IT system they use is considered “business-critical.”

All the while, companies (and CIOs, in particular) are facing tremendous pressure to out-innovate the competition. We all recall that the antidote to Nicholas Carr’s “IT Doesn’t Matter” campaign was in the application of game-changing software that companies used. But how can you do that when there’s a boatload of aged, disconnected apps dragging your IT environment under water?

Noted Robert Borchelt, a manufacturing IT director from Cummins, in the HP-Capgemini report: “Our IT landscape is like an Arctic ice field—with a lot of peaks, hidden crevices and thin ice, which you can fall through sometimes without realizing you are about to do so.”

Out with the Old! (Just Not Yet…)

Most any CIO or LoB manager who knows about application sprawl will identify with Borchelt’s insights: Sometimes it’s hard to know what you don’t know when you’re dealing with, say, 2,000 business apps, dozens of business units acquired or launched over the years that are now spread over 20 or 30 countries and may or may not have thousands of employees working in those systems at this moment.

The root causes of application complexity that contribute to application-portfolio negligence, as described in the report: Customized and packaged legacy software still kept on life support but no vendor support, combined with a lack of M&A application-rationalization procedures and a pervasive fear related to data retention and regulatory compliance.

Combine all that with current budgetary pressures (in that it may be more expensive to retire or migrate a system than just leave as is) and your classic IT change-management issues (fear of change) and one can see why it’s easier just to forget about the apps problem than actively deal with it.

Would You Like Your Innovation with or without Disruption?

This topic is particularly relevant to large and midsize SAP customers who have heard about SAP’s “Innovation without Disruption” campaign for years: The tactic aims to assuage SAP customers as they evaluate, integrate and upgrade their software that’s a little long in the tooth.

The implicit message from SAP: We know you’ve got complexity, older versions of the apps and huge business pressures. Our new technologies can help you out of the old, without taking down your existing systems.

The “innovation without disruption” ideal is baked into a range of SAP wares and strategies: NetWeaver, HANA and in-memory computing, its recent mobility push, and enhancement packs, just to name a few.

The HP-Capgemini survey report did not call out specific software vendors by name, but because SAP software basically runs the globe’s biggest companies, one can safely extrapolate that SAP customers are feeling the type of application portfolio headaches described in the report. (HP and Capgemini are both big partners to SAP and sell application modernization services.)

The report notes that “application retirement is not yet top of mind for most CIOs.” Why? Because IT managers usually view corporate application lifecycles in three steps: build, deploy and maintain, notes the report. But there is a fourth step: Retiring the application, which is often ignored.

This too is an area that SAP and CTO Vishal Sikka have attacked with his “Timeless Software” approach to developing its next-generation apps.

Clearly, SAP and other business software vendors (Oracle’s Fusion Applications, for example) are thinking about the necessary software for their customers’ futures. But as the survey data shows, it’s going to take a lot of work for those CIOs and their companies to break free from their apps past.

What’s your take on application modernization and portfolio strategies? How is your organization dealing with this challenge?

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2 Comments for Enterprises Want Innovation But Can’t Quit Their Legacy Apps

Jamie Oswald

I’d be more interested in all of the *real* reasons folks aren’t getting rid of these extra apps (and the expense associated with them. I know of a lot of companies that are paying enterprise licensing for multiple ERPs, multiple BI toolsets (even niche ones) because its easier for a decision maker to say “We haven’t had time to deploy it” than to say “I never should have bought this in the first place.”

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