About sixty seconds after someone implemented the first piece of technology in an organization, the first bit of so-called technical debt was accrued. And no one noticed.
Tech debt has always been with us, and contrary to how it is often portrayed, it is not a problem in-and-of-itself. In fact, it’s almost impossible for an organization to function without incurring some amount of technical debt. It’s a lot like buying a house for most of us — incurring debt is just part of the process. Likewise, technical debt is part of developing and deploying the tech that creates efficiency and competitive advantage in an enterprise.
It’s not the debt, per se, that’s the issue. Instead, it’s whether that “debt” is delivering a return that determines if it is “good” or “bad.” It’s just like the idea that debt on a house is smart, but racking up tens of thousands of dollars of debt on a three-day luxury vacation is probably not your best financial move.
And let’s just say that most IT organizations have been spending too much time sipping mai tais on the beach, and not enough transforming fixer-uppers into real estate gold.
While there are plenty of reasons that have led us to this point, the fact remains that the tech debt bill you and your predecessors have accumulated is coming due — and the cost and impact are continuing to rise.
What is Tech Debt, Really?
Part of the challenge with the tech debt conversation is the misunderstanding of what it really means to accrue it. Many associate tech debt with taking shortcuts or making decisions for short-term benefit at the cost of long-term consequences, often to meet a deadline of some sort.
While that’s certainly one source, we also don’t fully understand the long-term ramifications of decisions we make regarding the architecture and deployment of the technology stack.
A number of the most “expensive” parts of a typical enterprise’s tech debt load — those that are the hardest to “pay off” — are not the result of impetuousness or short-sighted decisions. Instead, they merely reflect that every piece of technology that an organization deploys will require ongoing maintenance to ensure that it remains useful and relevant in delivering value to the enterprise.
And those maintenance costs often rise as a technology ages, even if it continues to provide business value. There is no such thing as a static organization, so every piece of technology requires maintenance to continually adapt it to changing business, compliance, security, or other needs.
This broader view of technical debt is proven by how most people measure it: the percentage of IT budget that goes to maintaining the existing technology stack versus investing in something new.
So, the fact is that every decision to develop and deploy a piece of technology will accrue debt. Therefore, the real question is whether that debt is good or bad — and if it is starting to anchor you to the past.
Why Tech Debt is Now a Strategic Roadblock
While I may have a different take on the definition of tech debt than other industry observers, we can all agree that it is becoming a significant challenge for enterprise leaders — and the reasons why are clear.
So many enterprises are struggling under a mountain of tech debt because they or their predecessors have made some short-sighted decisions and prioritized speed over things like building highly scalable and adaptable architectures. In most cases, these decisions were simply the consequence of too much demand, too few resources, and insufficient strategic insight.
Many of these decisions enabled organizations to achieve short-term objectives, but often left them to struggle under their weight, with little business value to show for it. Most importantly, however, the need to expend most of their resources servicing that debt is leaving them ill-prepared for the challenges and opportunities of the future.
A recent study of IT leaders by OutSystems found that technical debt limits the vast majority of organizations from innovating.
And the problem will only get worse.
Only 20% of organizations feel they are managing their tech debt well, and the vast majority believe that it will be a significant impediment going forward. That’s bad news given that in a recent study by PwC, 83% of global CEOs plan to increase their investments in digital transformation over the next three years.
The pressures to innovate and drive change are only going to continue to grow — and the technical debt will hang like a weight around the necks of those enterprises that cannot figure out how to get it under control.
The Intellyx Take: Getting Smart About Technical Debt
The solution to managing technical debt isn’t about eliminating it. As I began with, I don’t think that’s realistic. Managing it, therefore, comes down to two things:
- Accruing it on the right investments
- Reducing your “interest rate” on new investments
Ensuring that your technical debt is “good” comes down to ensuring that your ongoing maintenance cost is generating a positive business return, either in terms of efficiency gains or competitive advantage. If it is, then this isn’t the debt you should be worried about.
If the debt generates a negative return, it should be a top candidate for replacement, re-platforming, or some other mitigation effort that will reduce the debt load and increase your ability to innovate.
When it comes to the new investments you make, you mustn’t perpetuate the problem. Of course, that starts with avoiding silly, short-sighted decisions that will cause an almost immediate debt explosion. But, as I said initially, a lot of technical debt comes from the inability to effectively predict the future, rather than making silly decisions. The key, therefore, is to reduce your “interest rate” by limiting your exposure to unforeseeable future circumstances.
You can do that in a couple of ways.
One is to make stronger investments in a highly scalable and adaptable technology architecture. A second way is to reduce the cost of maintenance on those investments. A great example of this approach is the use of development platforms, such as OutSystems.
These platforms enable technical and non-technical users alike to rapidly build, test, and change applications over time. Doing so expands the number of people who can participate in the development process, and increases the speed at which organizations can adapt the resulting applications to meet changing business, compliance, and security needs. Both of these benefits reduce the “debt interest” by minimizing the ongoing cost of maintenance.
Much like a savvy real estate investor, your goal should not be to eliminate technical debt. Instead, your success will come by understanding its true role in the enterprise and managing it better than your competitors. The result will be a technology stack rich in innovation that delivers consistent returns for your organization long into the future.
Copyright ©2021 Intellyx LLC. At the time of publishing, OutSystems is an Intellyx customer. Intellyx retains final editorial control of this article.
