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.

To read the complete report, click the download button below.

Sign in to view or download this research.

Login

Register

Insight. Inspiration. Impact.

Register now for immediate access of HFS' research, data and forward looking trends.

Get Started

Author

Related


Download Research

    Sign In

    Sign up for a free
    research account

    With the exception of our Horizons reports, most of our research is available for free on our website. Sign up for a free account and start realizing the power of insights now.

    Digests/Newsletters: Overviews of the latest news, insight, and research by HFS.

    HFS Events: Exclusive invitations to HFS webinars, roundtables, and summits, bringing together key industry stakeholders focused on major innovations impacting business operations.

    By registering you agree to our privacy policy.

    I hereby consent that HFS Research can process my personal data.

    Premium Access

    Our premium subscription gives enterprise clients access to our complete library of proprietary research, direct access to our industry analysts, and other benefits.

    Contact us at [email protected] for more information on premium access.

    Help

    If you are looking for help getting in touch with someone from HFS, please click the chat button to the bottom right of your screen to start a conversation with a member of our team.

    [email protected]

      Contact Ask HFS AI Support