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BPM FORUM MEMBER BULLETIN OBSOLETE SOFTWARE COSTS U.S. COMPANIES BILLIONS OF DOLLARS IN UNNECESSARY IT SPENDING, SURVEY FINDS 70 percent of respondents say they have redundant or discarded applications, but lack systematic processes for retiring business solutions. PALO ALTO, CALIF., December 6, 2022 – Corporate America’s information architecture is replete with obsolete, redundant and unused software applications—so many, in fact, that maintaining them drains tens of billions of dollars per year from the most information-intensive companies alone. However, nearly three quarters of these companies have no process in place for retiring outmoded software and less than half conduct regular software audits to see how much software is on the network. Those are among the startling findings of a new online survey of business and IT executives conducted by the Business Performance Management (BPM) Forum, a leading executive organization. Titled “Software Drain or Business Gain: Assessing Application Value, Relevance and Cost to Your Company,” the study analyzes the value of business software to corporations today, what companies do to ensure that applications are aligned with business strategies, and what happens to those applications when they’re no longer used. More than 40 percent of the respondents estimate that unwanted applications drain more than 10 percent of their IT budgets, while 10 percent estimate the real cost to be more than 20 percent. Fully 70 percent say their companies have redundant, deficient or obsolete applications on the network—and the problem is even more serious in larger companies with revenues over $500 million. To put those numbers into perspective, the average IT budget of companies in the InformationWeek500 (the magazine’s annual ranking of the most IT-savvy companies) is estimated at $334 million a year. Even 10 percent of the overall sum spent by this elite group makes for a waste of $16.7 billion. Also among the survey findings:
The study is based on a survey of 226 top IT professionals and C-level executives conducted in the third quarter of 2004 and reached companies ranging from small and mid-market businesses to global corporations with billions of dollars in revenue. Approximately 25 percent of all respondents come from companies with revenues of $500 million or more. The study is part of a thought leadership initiative by the Business Performance Management (BPM) Forum, an elite group of 500 senior executives dedicated to furthering operational visibility and financial accountability at global corporations. The survey was underwritten by Cognizant Technology Solutions, a leading provider of IT services, and Borland Software Corp., the global leader for platform-independent solutions for software delivery optimization. “Companies are challenged with a two-fold problem: There’s too much obsolete software on the infrastructure, yet no one is officially responsible for removing it,” said Donovan Neale-May, Executive Director of the BPM Forum. “Old software doesn’t stay on the corporate network because someone chooses to keep it there; it stays there because no executive takes the initiative to remove it. That’s why this is an issue management needs to address directly.” “Obsolete and redundant software is a serious drain on IT budgets,” said Lakshmi Narayanan, CEO and President of Cognizant. “We are seeing strong demand for services that analyze application portfolios and can identify the specific business value of each application. Organizations are also investing in rationalizing systems by re-platforming and eliminating applications and then using the savings to build new systems that can show substantial return on investment .” “It’s no secret that software drives business today, not just operationally but strategically as well,” said Dale Fuller, president and CEO of Borland Software. “This study illustrates how dependent a company’s growth and competitive advantage are on software performance. Unfortunately, the study also shows the lack of control and visibility that management currently has over this important asset. Borland’s Software Delivery Optimization vision gets to the heart of this issue. By aligning business and IT organizations, we can help transition software development into a more managed process that maximizes the business value of that software.” To undertake the research, the BPM Forum joined forces with GlobalFluency, the InfoWorld Media Group and eChannelLine. The full report will be made available online at www.bpmforum.org and at www.bitpipe.com. About the BPM Forum More than 500 companies are currently represented as members of the BPM Forum which is sponsored by Hyperion, accounting for well over $400 billion in aggregated annual revenues. These include: ACL Services, Accenture, Ameritrade, Bank of America, BearingPoint, Inc, Biz360, Booz Allen Hamilton, Canadian Imperial Bank of Commerce, Canon, Chordiant, Citgo, Citrix Systems, Inc., CNL Hotels and Resorts, Commonwealth Bank of Australia, Deloitte Touche, Daimler Chrysler, Fidelity Investments, FileNet, Fujitsu, The Gap, GEAC, General Electric, Harper Collins Publishers, Hewlett Packard, Hitachi, JP Morgan Chase, IBM, ICN Pharmaceuticals, Inc., National Scientific Corporation, Oracle, Phelps Dodge Corporation, Pinnacle Technology Partners, Inc., Porsche, PPG Industries, Inc, Price Waterhouse Coopers, Quest Industries, Inc., Sabre-Holdings, Safeway, Inc., Saks Incorporated, San Jose State University, Siebel, Singapore Power, Southwest Airlines, Staples, Inc., Starwood Hotels & Resorts Worldwide, Inc., Stratascope, Inc., Sun Microsystems, Symantec, T. Rowe Price, TCF National Bank, TD Bank Financial, TEK Digitel, Tickets.com, Toshiba America, Tyco International, Verizon and many more. http://www.bpmforum.org
GlobalFluency Cognizant Technology Solutions
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