The End of Software by Timothy Chou is a good review of the current challenges in the software world including thought-provoking discussion on the cost of IT and statistics about software application development and usage.
• Over 70% of IT budget is spent on maintenance today. The 30% of IT that is spent on new projects is mainly for upgrades of existing infrastructure or line of business applications.
• Over 70% of IT requests are never fulfilled as IT does not have the capacity, skills and/or budget to complete these requests.
• Applications take between 6 months to two years to implement.
• Customers typically avoid or skip releases due to the cost and pain to implement the release. Software upgrades can cost anywhere from $400-600 per user with training, business process impacts, infrastructure upgrades, etc. Many times the only impetus for a customer to upgrade is the fact that they will lose support.
• Customers typically only use a very small percentage of the functionality available to them in an application.
• Every $100 worth of software you own, costs you $400 annually to deploy and manage this software.
In summary, it takes too long and costs too much to implement large business applications where users only use a small percentage of the functionality and they do not fully optimize the business. We have to move more quickly.