Get Smart About Technical Debt

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In this webinar David Norton of Gartner Research discusses recent findings on Technical Debt that estimates industry IT debt is at $500 billion—and on target to reach $1 trillion by 2015. He also talks about the importance of Software Analysis & Measurement to manage Technical Debt, how to measure debt continuously to control TCO of the application lifecycle and include debt measurement in project management and prioritization.

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Get Smart About Technical Debt

  1. 1. Notes accompany this presentation. Please select Notes Page view. These materials can be reproduced only with Gartner's official approval. Such approvals may be requested via e-mail — vendor.relations@gartner.com. Role Of Analysis and Measurement in Managing IT Debt David Norton Research Director
  2. 2. "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
  3. 3. 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?
  4. 4. Why is the debt building up ?
  5. 5. 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
  6. 6. 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
  7. 7. You Cannot Hide From IT Debt – Sooner or Later You Have To Pay It Back
  8. 8. Why should you care?
  9. 9. 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
  10. 10. Marketing Drivers for Analysis Consumerization Social Networking Cloud Computing Green Business EC2 & S3
  11. 11. IT Drivers Consolidation Aging Data Centers M&A Activity Limited Staffing Available Skills Baby Boomer Effect Flexibility & Agility Poor Business & IT Alignment
  12. 12. Technology Drivers SOA Initiatives Facilities and Infrastructures Virtualization Is Everywhere Legacy Packaged Applications Legacy Systems
  13. 13. 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
  14. 14. What can you do to start to remove IT Debt ?
  15. 15. 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 ? !
  16. 16. Take a Strategic Approach Silo Holistic Accidental Architecture Planned and Managed ROI ROA Project Life Tactical Strategic
  17. 17. Understand the Process Migrations Architecture Decision Take Inventory Cloud/ SOA Restructure Modernization Steps
  18. 18. 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
  19. 19. How can you stay out of Debt ?
  20. 20. 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
  21. 21. Monitor Debt  Technical Integrity – Stack Integrity – Vendor – Skills – Technical debt  Business Impact
  22. 22. 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
  23. 23. 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
  24. 24. 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
  25. 25. Because you can’t manage what you don’t measure Actionable Application Intelligence for IT Executives
  26. 26. 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%   $
  27. 27. 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
  28. 28. 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
  29. 29. 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
  30. 30. 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
  31. 31. 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
  32. 32. CAST Confidential Q & A
  33. 33. CAST Confidential Upcoming Webinar Ensure Application Quality with Vendor Management Vigilance Wednesday, May 16 @ 11:00am EDT Speaker: Stephanie Moore, Principal Analyst, Forrester Research
  34. 34. CAST Confidential Contact Information Pete Pizzutillo p.pizzutillo@castsoftware.com www.castsoftware.com blog.castsoftware.com @OnQuality slideshare.net/castsoftware

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