Obsolete software drains billions from IT budgets

Obsolete, redundant and unused software applications are costing U.S. companies billions of dollars each year in unnecessary IT spending, according to new research.

BPM Forum -- an organization created to promote business performance management (BPM) techniques and technologies -- surveyed 226 IT and business executives and found the majority say they aren't getting the most out of their enterprise software investments.

Companies typically have no way of measuring return on software investments, no process for tracking what software is used, and no system for qualifying and certifying existing or new applications, according to the BPM Forum report.

When asked how often they conduct a company-wide software audit to see how many business applications are active on the network, just 25% of survey respondents said they do so once a year. More than 40% said they do it on an “as-needed basis,” while 13.4% never conduct audits at all.

Processes for getting rid of outmoded software are scarce: 73% of respondents say they have no systematic processes for retiring applications.

Companies appear far more focused on bringing in new software than they are on tracking the value of applications after deployment, says Donovan Neale-May, executive director of BPM Forum. "I was very surprised at how little attention has been paid to the back-end part of the software lifecycle," Neale-May says. "The software lifecycle continues unabated even if it's not producing value. Very few companies seem to audit and assess the usefulness and relevance as applications as they age."

Without proper controls in place, far too much unnecessary software winds up being supported on corporate networks. Among respondents, 70% are convinced they’re maintaining redundant, deficient or obsolete applications.

All that effort comes at a high cost: 35% of respondents estimate that unwanted applications consume between 5% and 15% of their IT budgets, and 23% of respondents say the tally is greater than 15% of their IT budgets.

Those IT assets could be redeployed to other projects, Neale-May says. "There's found money here if companies start to employ a more disciplined approach and methodology for looking at how software is aging and deciding when it needs to be eliminated."

Meanwhile, companies continue to bring new applications online at a healthy clip. One-third of respondents say their companies initiate more than 10 software development projects every year.

Cognizant Technologies and Borland Software co-sponsored the BPM Forum's survey, which is titled “Software drain or business gain: Assessing application value, relevance and cost to your company." The report can be downloaded from BPM Forum's Web site.

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