Unlocking business growth: A strategic approach to tackling technical debt
If you’ve ever driven a car in North America or parts of Asia, you might’ve seen a note on the mirrors: “Objects may be closer than they appear.” The same might be said of the current technology landscape. Tech is moving at a breakneck pace and often requires a split-second response time. This presents a conundrum to business executives. They need to make decisions with uncertain consequences, and in doing so, they face an adversary closer to hand: technical debt.
Businesses opt for “quick fixes” instead of working through difficult technology decisions, often when speed-to-solution is at a premium. These choices represent new features or functions, desired enhancements, or translation layers. And they also show up as additions to piles of an organisation’s technical debt.
While tech debt is often hidden, its costs can be clear: organisations face billions in lost productivity, talent attrition, security risks, plus potential disruptions to their success and stock price. DXC Technology recently revealed proprietary research finding that 46% of global executives think technical debt inhibits their ability to innovate, transform and grow.
Paying down tech debt requires executives to understand how it impacts their business and drive a specific four-step plan to address it. Discouraging future debt is part and parcel of a well-developed plan.
The hidden menace of technical debt
Tech debt is like a time bomb ticking within an organisation. While short-term solutions may work at first, they often crumble over time, causing costly rework and inefficiencies. A series of trade-offs and technical workarounds begin to compromise the long-term health of an organisation’s technological infrastructure. Although it is distinct from obsolescence or depreciation, its consequences are far-reaching: loss of systemic intelligence, compromised operational advantage and ineffective use of capital. In the simplest terms, it causes organisations to pay 20-40% to manage this inefficiency; it also consumes as much as 30% of the IT team’s talent.
DXC Leading Edge, the research arm of DXC Technology asked 750 C-suite information and technology executives about their organisation’s tech debt and modernisation efforts. It’s intriguing how most leaders indicate their modernisation is as much a business strategy as a technology one. However, a surprising seven in ten believed that IT leadership alone should bear the responsibility for resolving it. The business and technology go hand in glove in modern enterprises. Working toward modernisation is a team sport and every executive should suit up to play.
Tech debt prevents the business from adopting next generation tech and addressing expected future threats. Eight in ten noted that “modernisation increases our ability to leverage newer technologies such as AI, process mining and automation.” It also helps address expected regulatory and compliance requirements and is essential to thwarting emerging cybersecurity challenges. So, driving to the future requires dealing with past tech debt.
It’s worth noting how each industry has a nuanced approach to ameliorating its tech debt and embracing modernisation. The study provides enlightening industry-specific findings.
Breaking down the barriers
Pursuing modernisation means navigating some potholes where they present barriers to progress. The survey showed that 47% of the executives reported knowledge loss to be a barrier to progress (and one that worsens over time). Cultural barriers (including sponsorship and buy-in) posed a similar challenge for 38%. To tackle technical debt at scale, organisations need to break down these barriers and develop a comprehensive strategy.
The four-step plan to tackle technical debt
Crucially, DXC Leading Edge details a four-step plan that allows organisations to address their current technical debt and prevent its accumulation in the future:
- The first step is to reframe tech debt as a component of modernisation. This pivot refocuses the organisations on a clear and shared vision for modernisation efforts. It is an opportunity for candid executive conversations to assess the existing tech debt and strategies for the future.
- Step two gets to the business benefits of modernisation. These extend beyond the IT department, so the effort to support and manage modernisation does as well. While the CIO and CTO play a central role in leading modernisation, effective communication, and collaboration between the technical and business sides of the organisation are crucial. Alongside the CFO, the team should create a compelling case for how technology modernisation drives business growth.
- Every organisation has its unique profile and challenges. Clearing organisational barriers involves defining industry-relevant approaches alongside organisational needs. The study’s industry profiles offer a baseline allowing adaptation to an organisation’s requirements around infrastructure, architecture, AI, and automation.
- With the conversation reframed, barriers identified and addressed, organisations work the plan, with periodic reviews and necessary reconsiderations of their modernisation objectives. It’s an ongoing, collaborative process involving the entire leadership team. When executed well, it has far-reaching benefits, from cost savings and carbon reduction to improving employees’ work experiences.
Technical debt is an enduring topic across the intersection of business and technology, yet it’s often poorly understood. As it continues to accumulate, organisations around the world cite it as a top challenge, inhibiting their ability to transform and serve their customers into the future. According to Computer Economics, IT operational budgets are flat, capital budgets are flat to decreasing for more than half of the enterprises. So, if organisations want to drive growth and innovation, modernisation is the path forward.
With a better understanding of the sources of tech debt, a strategic approach to reframing it and approaches that discourage onboarding of additional debt, organisations can not only reduce their current debt but also prevent its accumulation in the future. Executives can break down barriers and embark on a path toward increased efficiency, productivity, and long-term success. The time to address technical debt is now, and the rewards of modernisation are within reach for those who take the initiative.
A results-driven global strategy leader and general manager, Dave has a proven track record of delivering value and driving change across diverse industries. Experienced in leading large organisations through innovation and digital transformation, Dave currently serves as Managing/Research Director of DXC Leading Edge Forum (LEF), advising C-suite leaders on strategy, innovation, and digital transformation.