Take 5 Report

Escape the code-heavy models inflating tech debt

New research serves as a wake-up call for CIOs and CTOs bleeding budget on integration and managed services.

Enterprise transformation isn’t short on software; it’s weighed down by code sprawl and the ecosystem built to maintain it. Each new bespoke line of code adds a maintenance tail that inflates services spend and tech debt, pulling budgets into integration and upkeep while software-led innovation stalls and reliance on systems integrators increases.

Artificial intelligence (AI) will compound the problem if it simply generates more code on legacy stacks; however, used within guardrails to refactor, standardize, and assemble governed components, it can reduce tech debt. The current operating model must evolve.

HFS Research, in partnership with Unqork, surveyed 123 large enterprises (revenues greater than $1 billion) to understand IT budgets, services-to-software ratios, systems integrator (SI) relationships, AI adoption, and governance patterns.

The survey uncovered five key takeaways:
    • We are living in a “keep-the-lights-on” doom loop. Enterprises spend two to seven times as much on services as they do on software
    • Technical debt is a self-inflicted bottleneck. Only about a third of code is reused, while two-thirds is rebuilt
    • AI presents a paradox of promise and peril for software development. Organizations show the highest confidence in AI’s ability to reduce costs (84% agree). Yet, 43% acknowledge that AI may create more tech debt, which ultimately increases costs
    • The two-step model of “buy software, then hire an SI” must change. A majority (58%) say the traditional SI model will be unsustainable within five years, and 76% want integration bundled with software
    • Nearly all (98%) of the decision makers surveyed are ready to offload legacy systems to a Services-as-Software™ model (buying outcomes where integration, operations, and governance are features of the product, not separate projects)

The Bottom Line: Flip the spending, shrink the surface area, and demand outcomes instead of buying obligations. This is how transformation becomes sustainable.

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