Technology has been shaping and improving how businesses operate for decades and its implementation is often viewed as a benchmark of progress and driver of value. However, what happens if you don’t move with the technological times?
As companies modernise and expand, failing to upgrade IT systems and digital architecture can lead to costly ‘technical debt’, drastically impacting profitability and restricting the ability to remain competitive.
Understanding technical debt
The phrase ‘technical debt’ applies to the potential remedial costs of choosing a simpler, short-term IT solution now instead of a more sophisticated approach that would pay dividends over time. It also refers to the overall costs of failing to maintain and upgrade digital infrastructure and software applications, or keeping up to speed with IT advances, leading to complications when integrating new products with outdated systems.
It’s impossible to completely eradicate technical debt, as digital progress means that organisations consistently need to evolve with the times. It’s how organisations manage this debt that matters.
The business impact of technical debt
There is no set way of dealing with technical debt – every organisation must manage their IT budget accordingly – but recognising its importance is key to safeguarding that all-important bottom line and ensuring that businesses remain forward-focused.
A recent report by McKinsey gave a startling insight into the impact of technical debt. The CIOs surveyed reported that 10 to 20 percent of technology budget allocated to new products was diverted to resolving issues relating to tech debt, with that debt amounting to 20 to 40 percent of the entire value of their digital infrastructure.
While the economic implications of technical debt are clear, the damage it can do to productivity and efficiency can have huge implications. Some common consequences include:
- Limited agility: Technical debt can reduce an organisations flexibility, limiting the ability to scale up or adopt new technology.
Time inefficiency: Developer time can be swallowed up with remedial work, reducing the hours they can spend improving digital infrastructure and processes.
- Reduced productivity: The disruption to core business operations can drastically impact project implementation, pushing back deadlines and reducing capacity.
- Lowered team morale: Troubleshooting technical issues means employees are investing more time fixing problems and less time being productive, leading to lower workforce morale.
- Loss of competitive edge: Focusing on remedial activity means core IT staff aren’t investing time in developing new strategies and ways to keep the business competitive.
How to manage your technical debt
Taking a proactive approach is key to managing technical debt. With the right support in place, you can prevent that costly backlog of digital developments, enhancing your digital infrastructure with the latest technology so you can focus on moving your business forwards.
No two businesses are the same. That’s why at Resolution IT we offer a bespoke approach to the finding the most effective means of keeping you competitive. Our digital transformation team works with organisations to streamline processes, maximise their IT investment and generate actionable data insights that proactively improve business operations. We know that automating processes saves our clients time and money, boosting efficiency and ensuring that precious IT resource can be spent in the right way – developing your business.
We are highly-skilled IT experts with a comprehensive understanding of emerging technologies, so we can help you to implement them seamlessly and with minimal disruption. We’re ahead of the game, acting as the eyes and ears your business needs to keep abreast of cutting-edge tech trends, helping you harness them for improved efficiency and productivity, whichever sector you work in. We know that training is essential for keeping your organisation up to speed, so, in addition to helping you adopt the latest systems, we’ll teach your staff to use them so you’re always getting the maximum return on your investment.
For support and advice on managing your technical debt, get in touch today.