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Role Of Analysis and Measurement
in Managing IT Debt
David Norton
Research Director

"IT debt" is the cumulative value of deferred maintenance
caused by IT budget cuts over the last decade.
IT debt is currently
$500,000,000,000
By 2015, IT debt risks rising to
$1,000,000,000,000
The World IT Debt

Code complexity
Maintainability
Internal Coupling
Functional Size
Redundant code
Testability
External Coupling
Operating cost
Maintenance cost
Reliability
Performance
Business Value
So Where is Your Debt?

Why is the debt
building up ?

Barriers to Enterprise Agility 50,000 Foot View
The Headaches
 Allocating budgets for long-term
planning
 Inadequate IT governance
 Asset control and ownership — who
makes the decisions around here?
 Project management office support
The Realities
 IT is viewed as a tactical solution
provider
 Negative perception of IT —
throwing good money after bad
 Tactical projects may slow —
increasing the bad perception
 Short-term priorities trump long-
term plans

1 Foot View
We just don’t have
the skills
We can not interrupt
the business cycle
There are to many
dependencies
We don’t have the
time, other priorities
Feel locked in to
legacy – it’s just too
hard

You Cannot Hide From IT Debt – Sooner
or Later You Have To Pay It Back

Why should you care?

Influencing Forces
IT Software
Analysis and
Measurement
Market Drivers IT Drivers
Technology Drivers
The confluence of these drivers is forcing the
movement to modernize and measure IT

Marketing Drivers for Analysis
Consumerization
Social Networking
Cloud Computing
Green Business
EC2 & S3

IT Drivers
Consolidation
Aging Data Centers
M&A Activity
Limited Staffing
Available Skills
Baby Boomer Effect
Flexibility & Agility
Poor Business &
IT Alignment

Technology Drivers
SOA Initiatives
Facilities and
Infrastructures
Virtualization
Is Everywhere
Legacy Packaged
Applications
Legacy
Systems

What CIOs Said
Top 10 Business Priorities Rank
Business process improvement 1
Reducing enterprise costs 2
Improving enterprise workforce
effectiveness
3
Attracting and retaining new
customers
4
Increasing use of
information/analytics
5
Creating new products or services 6
Targeting customers and markets
more effectively
7
Managing change initiatives 8
Expanding current customer
relationships
9
Expanding — new markets/regions 10
• No point improving process if
supporting systems don’t perform
•OPEX directly related to IT Debt
• Legacy debt limits innovation
and pushes up CAPEX

What can you do to start
to remove IT Debt ?

Understand Your Debt
High
Excellent
TechnicalQuality
Business Value
Re-Evaluate/
Reposition
Asset
(Tolerate or Invest)
Maintain/
Evolve Asset
(Integrate)
Retire/
Consolidate
Asset
(Eliminate)
Re-Engineer/
Modernize
Asset
(Migrate or Invest)
Low
Poor
?
!

Take a Strategic Approach
Silo Holistic
Accidental
Architecture
Planned and
Managed
ROI ROA
Project Life
Tactical Strategic

Understand the Process
Migrations
Architecture
Decision
Take Inventory
Cloud/
SOA
Restructure
Modernization
Steps

Make it Business-Relevant
BuyerSupplier
Send Order
Take Order
Send Order
Error
Receive Order
Error
Send Order
Responce
Recive Order
Respone
Dispatch
Order
StockCheck
Inventory
<<service>>
Stock
<<Component>>
Warehouse
<<Service>>
StockMan
<<Component>>
StockUpDate
Order Management
ERP InvoicingPayment
Customer
Order
Line Items
Address
BillingShipping
Account
Payment
Method
Domain Model
Concepts
<<servi
ce>>
Order
<<service
>>
Customer
getTodaysStockLevel
<<ser
vice>>
Stock
confirmCustomer
<<serv
ice>>
Shippi
ng
getEstShipDate
validatePayment
orderNotification
sendConformation
<<service
>>
Payment
Business
Use Case
System
Use Case
Interfaces & Components Messages & Integration
Business Goals
Supported Business
Process
Enabled Business
Policy's & Rules

How can you stay out
of Debt ?

Think TCO – Design for Life
98%
94%
92%
84%
Application Volatility
Low High
"DesignforLife"Objectives
High
92%
*Typical Go Live vs. Long
term operational spend over
15 years

Monitor Debt
 Technical Integrity
– Stack Integrity
– Vendor
– Skills
– Technical debt
 Business Impact

Recommendations – Next Week
CIO or VP of Applications
– Get TCO into the investment process
– Get IT Debt on the business radar
Head Architect or QA
– Examine the most troubled projects to find hotspots
– Determine if the organization has architecture/coding
standards
Project or Development Manager
– Identify where you’re leaving debt for post-release
– Start a technical debt register

Recommendations – Next Three Months
CIO or VP of Applications
– Get a first cut at costs, utilization and risks for the top
100 applications
– Assess IT aptitude and engagement for the most
important business executives
Head Architect or QA
– Perform root cause analysis of incidents & SIT defects
– Build development guidelines
Project or Development Manager
– If your using agile development monitor refactoring each
sprint and remove technical debt per sprint

Recommendations – Next 12 Months
CIO or VP of Applications
– Publish the first "Annual Report on Business Applications“
– Have active application intelligence process
Head Architect or QA
– Recommend technical debt service levels for internal
teams and vendors
– Build architectural rules into SDLC stage gates
Project or Development Manager
– Build a mechanism to track the technical quality of your
projects for code and architecture
– Set technical quality improvement targets

Because you can’t manage what you don’t measure
Actionable Application Intelligence for IT Executives

Software Quality
Sources: Economics of Software Quality, Jones & Bonsignour; Software Defect Analysis, An Empirical
Study of Causes and Costs in the IT Industry, Kristiansen, NTNU; CAST Report on Application Software
Health (CRASH) 2012, Curtis, Sappidi, & Szynkarskii; IDC SQAM Forecast
PRODUCTION DEFECTS
70%
30%
of downtime caused by
10% of defects!
65% Customer
Satisfaction Impact
47% Time to
Market Impact
$3.61 Technical Debt
added per line of code
1x 2x 3x 6x
CosttoFixOverTime
Code SIT UAT Live
Structural
Functional
Economics
90%


$

CAST Confidential
Market Leader in Software Analysis & Measurement
Ambitious
Mission
Rock Solid
Foundation
Market Leader
Introduce fact-based transparency into application development and
sourcing to transform it into a management discipline
 Broad market presence in Europe, North America and India
 Strongly endorsed by software industry gurus and long term investors
 Over $100 million of investment in R&D, driven by top talent in
computer science and software engineering
 Pioneer and recognized market leader since 1999
 CAST Research Labs the world’s largest R&D facility dedicated to the
science of software analysis & measurement (SAM)
Cool Vendor in Application Services
“CAST metrics have become the de facto standard for measuring the quality
and productivity of deliveries” - Helen Huntley, Research VP, Gartner

CAST Confidential
Product Quality Metrics
Most enterprises measure everything but
the product delivered to the business
CAST measures the product itself
Robustness
Performance
Security
Changeability
Transferability
Size
Planning
Estimation
Scheduling
Time Tracking
Cost Tracking
ProductProcess
Time & Duration
Effort & Budget
Function &
Scope
Quality
&Size
Requirements
Earned Value
User Acceptance
Usability
CAST AIP

CAST Confidential
CAST Product Suite
Function Point Manager
CAST Application Intelligence Platform
AppmarqDiscovery Portal
Risk Drivers
 Robustness
 Performance
 Security
Alerts, trending, root cause analysis
Cost Drivers
 Transferability
 Changeability
Structural Quality
Database
Compare to industry
business process and
technology
Automated App
Blueprint
Discover, modernize
and change
applications
Function Point Changes Due to a Sequence of
Change Requests
0
5
10
15
20
25
30
35
40
0 50 100 150 200
Cumulative Effort (Staff Hours)
#FunctionPoints
1 52 3 4
Automated FP
Technical
Sizing
Effort
Estimation
Cloud SaaS Offering:
 No centralized source code
collection
 Portal results
 Full analysis report
Rapid Portfolio Analysis
 Size
 Complexity
 Production & Maintenance Risk
 Technical debt estimation
CAST Highlight

CAST Confidential
Driving Software Measurement in the ADM Industry
250 Global Leaders Rely on CAST
Institutions Engage CASTSIs Resell CASTSIs Use/Resell CAST
Key Influencers Recognize CAST
#1 in technology
#1 in in business IT
#1 in benchmarking

CAST Confidential
Tangible and Measured Value
 Mitigate business risks with improved structural quality
– Better applications for higher business resiliency and continuity
– Risk-proofed projects more likely to deliver business benefits on time
 Make IT and suppliers more productive
– Eliminate waste in ADM
– Reduce waste in operations
– Apply consistent measurement & KPIs for superior visibility
“Applying the principles of lean manufacturing to ADM can increase productivity by 20 to
40 percent while improving the quality and speed of execution.”
- Ranjit Tinaikar, Principal, Head of NA IT Management Practice

CAST Confidential
Q & A

CAST Confidential
Upcoming Webinar
Ensure Application Quality with Vendor
Management Vigilance
Wednesday, May 16 @ 11:00am EDT
Speaker: Stephanie Moore, Principal Analyst,
Forrester Research

CAST Confidential
Contact Information
Pete Pizzutillo
p.pizzutillo@castsoftware.com
www.castsoftware.com
blog.castsoftware.com
@OnQuality
slideshare.net/castsoftware