July 11, 2012
Legacy Systems Preventing One in Four UK Businesses from Achieving Agile IT Benefits, Accenture Research Finds
Survey of UK executives reveals nearly one quarter of IT budgets over next two years will be spent maintaining legacy systems
LONDON; July 11, 2012 – More than one in four (27 percent) UK businesses are unable to take advantage of new agile infrastructure that can scale their IT function to meet the evolving needs of their organisations, because they are constrained by existing legacy systems, according to a new study released today by Accenture (NYSE: ACN).
The ‘Agile IT’ research is based on a study of 500 technology and business executives in the United Kingdom (UK) with responsibility for managing revenues and cost in their organisation. Agile IT – the ability to scale up and down IT resources rapidly to meet changing user and customer needs, reduce costs and help bring new products and services to the market through faster access to variable computing resources – could save businesses nearly one-third of their IT costs, according to a majority (75 percent) of the executives surveyed.
The research shows that legacy systems are causing a number of cost and flexibility issues, as businesses face challenges in managing the agility of new cloud solutions versus the rigidity of core legacy infrastructure and applications. Almost half (45 percent) of respondents said that they need to modernize or replace legacy systems which are impediments to rapidly and flexibly meeting changing user or customer needs. Other highlights included:
- Over one-third (35 percent) of those polled said that they are being held back by current infrastructure, despite the fact that they see ‘cloud computing as a great move’ and thus likely to improve IT productivity
- More than half (66 percent) of technology executives forecast that up to 30 percent of their IT budget is expected to support legacy systems over the next two years
- Four-fifths (80 percent) of organisations revealed that that they do not have a fully developed application retirement roadmap, an essential ingredient for successfully moving to agile IT
“CIOs and other technology executives face tough questions about what to do with their legacy infrastructure and software applications portfolio,” said Stephen Nunn, managing director, Infrastructure Consulting Group, Accenture. “IT executives seeking to accelerate their journey to a more agile IT environment need to work closely with their business counterparts to determine whether to sustain, consolidate, modernise, or retire each application that supports a core business function. Conducting an application rationalisation exercise based on the usual criteria but also specific agile IT principles and suitability for cloud technology will identify the best course of action and enable the benefits of agile IT to be realised.”
Drivers for Agile IT investment
Organisations looking to deploy agile IT solutions were clear about what the main drivers for their businesses would be:
- Over half of executives said that they felt transforming fixed IT infrastructure and operational investments could bring improved IT flexibility (55 percent) and better align IT (52 percent) with real business needs within their organisation
- Executives also said that transforming fixed IT infrastructure into new agile environments could bring about higher IT utilisation and knowledge work productivity (50 percent)
- Better IT engagement (52 percent) to respond to changing business demands and reduced IT costs (also 52 percent) for the business were identified by executives as the main drivers for increased speed and agility in IT
Nunn concluded, “Agile IT can transform how business is done by making it easier for knowledge workers to access the information they need, when they need it, and to collaborate more effectively with others both inside and outside the organisation. CIOs looking to capitalise on the benefits should prepare for a transition to a new agile IT infrastructure by implementing a governance process and an application roadmap for modernising legacy IT. This will enable them to integrate new solutions more rapidly and gain the ability to ‘plug-and-play’ their core software functions.”
About the Research
In November 2011, Accenture conducted the ‘Agile IT’ research to assess UK business readiness, challenges and attitudes towards agility in IT infrastructure, required to scale up and down IT resources to meet changing user and customer needs. Researchers interviewed 250 technology (50 percent) and 250 business (50 percent) executives in organisations with more than 1,000 employees from five major industry sectors; Financial Services, Communications & Hi-Tech, Public Services, Products, and Resources. All interviews were conducted with executives with P&L responsibility within their organisation, with technology executives in CIOs/Heads of IT Infrastructure functions (50 percent), and business executives from Heads of Business (22 percent), Sales and/or Marketing Units (20 percent) and other operational functions including HR and Finance (9 percent).
To access the Accenture Agile IT research report findings please click here.
Accenture is a global management consulting, technology services and outsourcing company, with more than 249,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$25.5 billion for the fiscal year ended Aug. 31, 2011. Its home page is www.accenture.com.
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