Study: US government spends $36 billion a year maintaining legacy systems

As federal CIO Vivek Kundra assesses the need to streamline government IT, he may want to look at the lack of progress in legacy modernization. A new study, based on a survey of 166 senior IT managers in US federal agencies, estimates that agencies spend almost half of the annual federal IT budget, $35.7 billion, maintaining and supporting legacy applications.  In addition, nearly half (47%) of all existing IT applications are based on legacy technology in need of modernization.

Agencies' systems are aging, but only one out of three is doing something about it

Four out of five government executives say this is dangerous, and that mission-critical government capabilities could be at risk if agencies do not modernize legacy applications.

These findings are based on a recent survey conducted by MeriTalk and the Unisys Center for Innovation in Government. About 51% of respondents are with civilian agencies, and 49% are with military and intelligence agencies. The study's authors, Brad Bass and Mary Tobin, arrived at the $36 billion legacy maintenance figure by applying the estimated 46% of budgets going to maintenance discovered in the survey against the annual federal IT budget of $77.5 billion.

While the federal IT managers say they are desperately in need of legacy modernization efforts, only one-third could say that application modernization is actually a top priority at their agency. Half of the respondents considering application modernization say they are still in the early stages -- mainly at the discovery or planning phases of implementation.

There seems to be a major communication gap between agency leaders and front-line IT managers as well. For example, the survey finds 50% of C-level IT executives believe their agency has an application modernization strategy, compared to 33% of down-in-the-trenches IT managers.

Application redundancy – running multiple systems to perform the same tasks and processes – is an issue in federal agencies, according to the study, particularly in the areas of IT governance and risk management, enterprise document and content management, and business process management systems.

The survey's authors recommend a service-oriented approach to address many legacy modernization issues. Such an approach will help "fuel innovation and continuous improvement, shifting costs to extending business capability as opposed to new software development that is partly or wholly redundant. Incrementally modernize, emphasizing reuse and not technology, developing shared services where sharing is valuable and agreed upon by the participants."

Not surprisingly, money is the issue for many agencies. Sixty-five percent say they need more budget to move forward with legacy modernization, while 44% could use more staff.

While Federal IT leaders see modernization of these systems as top targets for return on investment, progress lags in all but one of these areas – business process management. Respondents reported that their agencies are making the most progress in the areas of federated identity management, business process management, geographic information systems, and service-oriented architecture.