Global IT Debt: A “New” Buzz Term For IT/ERP Vendor Avarice

Posted on December 17, 2010

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First up is a new report from Andy Kyte, a Gartner fellow, in which he estimates that “Global IT Debt” will total $500 billion in 2010, with the potential to jump to $1 trillion by 2015.

Those are big numbers, but what does Global IT Debt mean? “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,” notes Kyte in the Gartner announcement.

from CIO article ERP Sticker Shock: Maintenance, Upgrades and Customizations, September 23rd, 2010

Well we finally have a term for the traditional licensing model in which large vendors and consultants charge exorbitant sums of money for delivering little more than an ephemeral vision of increased efficiency and seemingly limitless savings . . . Global IT Debt!

Referencing my favorite scuba diving analogy, you know the one where the diver stabs his buddy in the leg and swims for the service at the first sign of a shark, the irony is that this term was coined by Gartner whose sage advice was supposedly designed to help organizations to avoid disaster rather than embrace it.

What’s worse, and in a deflective manner that would rile the sensibilities of a Larry Winget, whose books include titles such as Your Kids Are Your Own Fault, and emphasize the importance of taking personal responsibility, the article talks about the need for “user education” relative to clients having a better understanding their existing ERP capabilities.  Isn’t it always the users fault?!

The writer then suggests that once duly educated, clients will be convinced of the need to throw good money after bad by “clearing the backlog maintenance,” to bring the “corporate applications portfolio to a fully supported current release state.”

Never mind the fact that the expletive-deletive application has never worked properly in the first place.  Talk about an unconscionable cash grab!

Think of this way in terms of an every day life example.  It is like you have purchased a car while it is still being created on the designer’s board.  Then, and even though you do not have immediate use of the car in the foreseeable future, the dealer insists that you buy an extended maintenance agreement in which you pay a hefty monthly fee.  Doesn’t this make sense?  Who wouldn’t jump at an opportunity to own a car under these circumstances?

What the writer and Gartner expert fail to mention is that 85% of all IT/ERP initiatives fail to achieve the expected results and are eventually scrapped costing clients collectively 10s if not 100s of millions of dollars.  Perhaps , and I am just throwing out ideas here, instead of user ignorance, may be the reason for the Global IT Debt is somehow tied to poor results?

Based on the above, clients would do better buying their ERP solutions from some guy wearing a trench coat in an alley.  At least it would be a lot cheaper to achieve the same outcome!

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Posted in: Commentary