Global software and cloud services provider SoftwareOne released its "CIO Pulse: 2023 budgets & priorities" report on March 9, revealing that organizations will feel significant pressure to do more with less this year.
The report is based on a survey of 600 IT leaders in the U.S. and U.K. Among the top findings in the report is that although 93% of CIOs anticipate an increase in IT budgets in 2023, 83% feel pressured to maximize their budgets more than ever before.
In terms of where the budget dollars need to be stretched, a primary focus is on reducing technical debt, which has grown in recent years. In fact, 72% of CIOs claimed that technical debt related issues have slowed down digital transformation efforts. Overall, CIOs still see a need to work on digital transformation as a driver for business growth and profitability.
"While 92% of respondents saying digital innovation will need to drive revenue makes good business sense, what I find in practice is very few organizations are able to measure this," Dan Ortman, global FinOps practice director at SoftwareOne, told ITPro Today. "For me, this stands out as the most critical finding in the report and underscores how important FinOps and unit economics are to cloud spend management."
CIO Pulse: 2023 Budgets & Priorities Report Identifies Sources of Technical Debt
Technical debt can come from any number of different sources.
The SoftwareOne report found that 38% of organizations accumulated technical debt due to cloud migrations that were rushed during the COVID-19 pandemic. The rushed migrations led 31% of CIOs to admit that their organizations had not properly optimized application workloads before the cloud migration occurred.
Adding further insult to injury, over a third (38%) of CIO claimed that cloud budgets were not properly determined prior to the migration, leading to overspending. According to the survey, 45% of CIOs believe that enhancing transparency and control of cloud expenses would enable them to obtain more value from their cloud investments.
Legacy On-premises Systems Remain a Challenge
A key challenge identified by 51% of CIOs is the complexity of legacy IT that they need to maintain.
According to Andy Dunbar, solution & services director at SoftwareOne, there are a number of reasons why organizations get stuck with legacy on-prem systems.
- Application modernization comes with a high cost: Business-centered application owners don't want to "break what's working now" and don't understand the impact of not modernizing — they just care that the application/solution/workload is working as is.
- Data: The current data setup may be complex and a major challenge to migrate or convert from an old system to a new world and operating system.
- Organizations may be contracted to continue to use the system. For example, a large car manufacturer may have a massive supply chain, and it has commitments from its supply chain not to break or change things. This causes a huge amount technical debt and means one business is controlling another.
- Ownership: Some organizations don't know who owns an application and they worry that if they delete or migrate the app, it will impact systems or processes they are unaware of, so they do nothing.
Dunbar said SoftwareOne addresses the issue around legacy IT using the 7Rs approach, assessing an organization's IT estate and then choosing the correct path for the various applications:
- Rehost — moving on-premises applications to virtual machines in the cloud
- Relocate — transferring servers from an on-premises platform to the cloud version of that platform
- Replatform — moving the application, with some level of optimization, to the cloud
- Refactor — rearchitecting and rewriting an application until it is well-suited for the cloud
- Repurchase — buying a SaaS software product to replace a custom application or moving an application's components from traditional licenses to newer versions or third-party equivalents in the cloud
- Retire — decommissioning applications that no longer serve any business need
- Retain – keeping workloads in the current on-premises environment.
About the authorSean Michael Kerner is an IT consultant, technology enthusiast and tinkerer. He consults to industry and media organizations on technology issues.