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CIOs Estimate 48% Rise in Mainframe Application IT Debt over Last 18 Months

Announcement posted by Micro Focus 21 Mar 2014

As a result, 68% of CIOs admit their business is exposed to compliance and risk issues, new global study finds

CIOs and IT directors polled across Australia and New Zealand estimate it would take an average of $9.78 million to bring their outdated mainframe applications up to date – an increase of almost half (48%) from May 2012 when the figure stood at $6.6 million1. That’s according to an independent global research study undertaken by Vanson Bourne and commissioned by Micro Focus (LSE: MCRO.L).  Respondents also confirmed the IT debt2 problem will only get worse, anticipating an increase of 8% over the next five years.   

The modernisation conundrum

On average, respondents across Australia and New Zealand expect their organisations to continue relying on mainframe applications for another ten years, with almost half (48%) believing it to be longer than this. However, despite the perceived longevity of mainframe applications and mounting IT debt, the majority (80%) find it difficult justifying the expense of maintaining core applications. As a result, 68% of CIOs admit their business is exposed to compliance and risk issues.

Commenting on the research results, Derek Britton, Director of Product Marketing at Micro Focus said: “Core mainframe applications are often the lifeblood of the organisation, yet the burden of IT debt is on the increase. A major factor in this is that many non-IT people think IT innovation only means brand new technology, rather than improving existing, critical applications3. The IT leadership challenge is to find smart ways to blend innovation projects with protecting and evolving their critical systems.”

IT skills gap intensifies the problem

Almost three quarters (76%) of IT decision makers confirm it is difficult to find staff or new recruits with mainframe application skills and predict that an average of 14% of staff members currently responsible for maintaining mainframe applications will retire in the next five years. Half of CIOs highlight the impact of the problem, confirming that when new legislation or industry regulation requires compliance changes to be made to their mainframe applications, it is highly likely or certain that the original knowledge of the application and supporting data structure is no longer in the organisation. To make matters worse, three out of four (74%) say that their organisation’s application documentation is incomplete.

CIOs challenge academia to do more

While almost a quarter of respondents (24%) do not feel the government is doing enough to assist in addressing the general IT skills gap, the majority of CIOs (88%) assign overall responsibility for addressing the issue to academia saying they do not believe academic institutions are doing enough. A massive 78% of IT leaders believe it is valuable for students to learn mainframe programming languages such as COBOL and PL/I and more than nine in ten say these languages should be taught as part of the curriculum, whether core (44%) or elective (48%).  The reality is that only 27% of universities around the globe have COBOL as part of their core (18%) or elective (9%) curriculum.4

Additional findings

·       On average, 34% of organisations’ mainframe applications are accessible on mobile devices and in two years’ time this number is expected to rise by 41%

·       58% of organisations have users who need access to mainframe applications through a mobile web browser, 46% need access through an Android application, and 36% need access through iPad/iPhone apps

·       72% of respondents say they find it difficult to develop mainframe applications for mobile devices and 82% say that the mainframe is creating challenges that make it even more difficult to develop mobile apps

·       On average, 31% of current mainframe applications are accessible via the cloud.  This figure is expected to rise to 41% in two years’ time.  80% say that it is difficult to develop mainframe applications for the cloud.

“Mainframe applications have provided unrivalled value to organisations for decades,” continues Britton. “Providing continuity and enhancement for those systems is an important part of IT strategy. Micro Focus has worked with hundreds of clients to help them modernise their core IT systems, by enabling them to tackle IT debt while providing the flexibility to meet new market demands.”    

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References

1From an independent research survey undertaken by Vanson Bourne in May 2012.

2IT debt is defined as the cost of clearing the backlog of maintenance to bring the corporate applications portfolio up to date.  

372% of CIOs say that non-IT people within their organisation do not base their opinion of IT innovation on updating legacy applications - independent research undertaken by Vanson Bourne in December 2013.

4Micro Focus research, March 2013.

Notes to Editors

The independent research survey was undertaken by Vanson Bourne in November 2013.  It covered 590 IT decision makers in nine countries including UK (100), France (100), Germany (100), USA (100), Brazil (100), Australia (35), New Zealand (15), Hong Kong (15) and Singapore (25). The respondents were from mainframe organisations with 501+ employees, covering multiple industry sectors.

To download an overview of the research, please visit:  http://www.microfocus.com/mainframe-challenges-research

About Micro Focus

Micro Focus, a member of the FTSE 250, provides innovative software that allows companies to dramatically improve the business value of their enterprise applications. Micro Focus Enterprise Application Modernisation, Testing and Management software enables customers’ business applications to respond rapidly to market changes and embrace modern architectures with reduced cost and risk. For additional information please visit www.microfocus.com.

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