Don't Be Misled on IT Debt; You Don't Owe Anyone $500 Billion

Confusing "IT Debt" with "Technical Debt" might cost you next year's IT budget.

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This looks like a story about financial aspects of IT, but if you're a technologist -- especially one responsible for IT operations and the budget to fund them -- don't stop reading (trust me).

Two waves of news stories about the same report -- and the same statistic with two different names -- have the potential to confuse both IT and financial people about cost-cutting in IT budgets. Unfortunately, it will be the IT department and its operating budget that would be the loser in any conflict.

The first wave came right after Gartner released a report Sept. 23 estimating that, globally, businesses had fallen $500 billion behind in the amount they should have spent if they were keeping all their IT systems fully up to date.

The report described the "debt" as "the cost of clearing the backlog of maintenance that would be required to bring the corporate applications portfolio to a fully supported current release state."

Although the post also prompted refutations that called it a "bogus statistic" and a scare tactic using inflated numbers, Gartner's intent appeared to be to point out the real cost and potential risk budget cuts forced in the ongoing IT maintenance that makes up the bulk of IT operations.

The report got a second round of coverage after it was Slashdotted (with a connection to the $465,000 grand the National Science Foundation gave Gartner to study the cost, and ISVs with Solutions started weighing in on how to fix the problem.

Why Technologists Should Care

The problem is, the way Gartner defined IT Debt is only part of what financial experts talk about as "Technical Debt," which is actually the whole cost of developing, operating and maintaining a system until it pays off the cost of building it. Corporate IT people think of that as ROI because they have to justify the time and money they spend according to the benefit they deliver.

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