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3/21/2003
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Business Technology: The Monster In The Basement

There's a foul and dangerous monster in the basement of most American businesses, and like the acid-dripping, stomach-ripping nasty from the Alien films, most companies have no clue how to deal with it. While it decimates their most valuable resources -- people, money, time, and the ability to innovate -- these companies wring their hands and ask, "But what can I do?"

This foul fiend is named Legacy, and it's strangling innovation and progress in American business because it sucks up ever-larger percentages of IT operating budgets. In return, it produces nothing but the maintenance of the status quo. And while we can all live with that for a short time, in the longer term it's nothing but a recipe for atrophy, irrelevance, and ultimately, collapse.

At many companies, legacy life support is devouring upward of 75% of operating-expense dollars. You hear of some companies where it tops even 80%, and a leading business-technology optimization vendor (Mercury Interactive) believes the real numbers in some cases are actually north of 90%. Something clearly needs to change.

OTHER VOICES
For decades, Saddam Hussein has tortured, imprisoned, raped, and murdered the Iraqi people; invaded neighboring countries without provocation; and threatened the world with weapons of mass destruction. The time has come to end his reign of terror. On your young shoulders rest the hopes of mankind. ... Our fight is not with the Iraqi people, nor is it with members of the Iraqi army who choose to surrender. While we will move swiftly and aggressively against those who resist, we will treat all others with decency, demonstrating chivalry and soldierly compassion for people who have endured a lifetime under Saddam's oppression. ... Demonstrate to the world there is "No Better Friend, No Worse Enemy" than a U.S. Marine.

-- Maj. Gen. J.N. Mattis, commander of the 1st Marine Division, to his troops late last week


Licenses, maintenance fees, administration, services, patches, workarounds -- after feeding the beast each month, what's left for the rest of the outfit? Precious little, it seems -- certainly not enough to undertake significant new initiatives aimed at vital issues such as enhancing customer experiences, generating higher profits, creating greater customer loyalty, rooting out waste and inefficiencies, and building platforms and processes that lead to more speed and nimbleness and opportunism. And to make matters worse -- yes, it gets worse -- with the passage of time, the costs of sustaining this legacy mess steadily go up, generally by a percentage point or two per year. A few years ago, when IT budgets were vigorously climbing 10% or more annually, nobody really noticed this dangerous trend. And even if someone did, well, such details didn't merit much consideration when the goal was to buy and build as much and as quickly as possible.

Since it's safe to assume that no savior is going to swoop in and slay the monster, what alternatives exist? One of the greatest CIOs in the world puts it this way: "The only thing you can do is build your way out of it. There is no other solution." So says Randy Mott, CIO and senior VP at Dell Computer and former CIO at Wal-Mart, who's in the midst of doing just that. A tall challenge, to be sure, and all of us will no doubt be able to quickly assemble a list -- a long list -- of reasons it might work there but won't work here. Or why at this time it's just not practical. Or why it's not necessary at my company because we've learned how to live with rigid systems, shrinking opportunities, widespread sluggishness, and zero innovation. Or why I, in a world that's rapidly embracing the customer-centric values of real-time business, can continue to survive in batch mode while practicing GPB (glacier-pace business). Ah, if wish- ing only made it so.

THE LEGACY MONSTER
Please send your thoughts to me at informationweek.com/932/form.htm, and I'll pick the three most-interesting entries.


This is an issue we at InformationWeek are going to explore aggressively, and we'd love your help. We're going to open a new resource center on our Web site called "The Legacy Monster," posting the key problems, questions, Gordian knots, and other hairy stuff, as well as possible solutions, advice, ideas, and suggestions. Please send your thoughts to me at informationweek.com/932/form.htm, and I'll pick the three most-interesting entries. The brain behind each will receive a copy of our latest InformationWeek Research report on real-time business. Thanks for the help, and the deadline is one week from today.

Bob Evans
Editor in Chief
bevans@cmp.com


To discuss this column with other readers, please visit Bob Evans's forum on the Listening Post.

To find out more about Bob Evans, please visit his page on the Listening Post.

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