By the Numbers

Why IT Modernization Should Be on Your Radar

If IT modernization isn't a top priority at your organization this year, it should be, according to a recent report from consultancy Gartner. The reason? By 2010, more than a third of all application projects will be driven by the need to deal with technology or skills obsolescence, according to the report.

Gartner defines IT modernization as a movement that recognizes the strategies for and approaches to managing the evolution of business processes and applications, and supporting technology portfolios for optimized value, cost and risk objectives. To achieve that goal, CIOs need to address strategic planning capabilities and focus them on IT asset modernization.

Three main factors drive the need to modernize now, says Dale Vecchio, research VP in application governance and strategy at Gartner. The most significant is the skills crisis.

"It's a big deal. It's the first time a generational shift in developers and consumers of IT has been felt," he says. "Baby boomer retirement is becoming real. These retirements impact the availability of skills, and CIOs will have difficulty filling those open slots." Other factors include the agility gap (IT's ability to respond to business demands) and portfolio diversity (managing too many systems, resulting in additional costs). Digital natives brought up on Facebook, IM and the Internet are another factor. These employees have a different expectation of how IT systems should work, says Vecchio. Today's systems, he says, aren't necessarily built for that.

So how do you know if your organization needs to modernize now? Review the status of your long-term strategic plan. If your IT management team has weak or nonexistent processes for keeping up with and replacing systems, IT modernization should be on your radar.

Best Practices

Drive the agenda. As CIO, expect to drive the discussion around IT modernization directly, using the full resources of the IT management team.

Gather information. Identify key asset portfolios across the IT domain, and assign management responsibility across the IT management team for each asset portfolio.

Identify a point person. Find the best individual to take responsibility for comprehensive IT planning across all portfolios. Make this person a direct report.

Get the big picture. Organize an offsite planning session where asset owners can explain the IT maturity and modernization issues inside their own portfolios.

IT Modernization Moves Up As Issues Mount

Up to 30 per cent of employees with IT legacy skills will be eligible to retire in the next three years. At the same time, many artifacts (old programs, databases, platforms, etc.) will need to be replaced between 2008 and 2015.

CIOs list legacy modernization, upgrades or replacements as their No. 4 priority for 2008. In 2006 it ranked No. 10. Source: Gartner