Too Many Boxes

Too Many Boxes

At some point, the day of reckoning must come. The "buy-and-hire" strategy, patching together more and more boxes and software, administered by more and more people, for more and more money, that characterized the go-go 1990s, explodes. And the trigger point can vary.

For some, the trigger is a missed opportunity when market conditions change. Sunil Subbakrishna, an independent IT strategy consultant, cites MCI's Friends and Family billing program. "The other long-distance companies, which didn't have that capability in their billing systems, took up to two years before they could offer that feature," he says.

It's a question of agility: Business success today increasingly means connecting diverse constituents—customers, suppliers, partners—in real time, but "system complexity is a drag chain that prevents IT from responding to these new constituencies at a time when competitive pressures are forcing enterprises to respond to them," Gartner's Rowsell-Jones says.

But for most, it's the budget. Says John Kaltenmark, chief architect and a partner at Accenture Ltd. in Chicago: "One key indicator that we tend to look at is the amount of the IT budget that goes to maintenance and support costs. In the last several years, we've seen that creeping up in some organizations to 70, 80 almost 90 percent. If you're spending much more than 40 or 50 percent, whether it's people costs, or assets or tools, or development to keep the systems running, that's an indicator that it's probably time to step back and look at rationalizing your systems environment."

This article was originally published on 02-01-2003
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