Why Your Construction Firm Should Invest in Managed IT Services
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Discover how ignoring technology debt — the loss associated with not addressing outdated tech — can hamper your company’s ability to innovate and compete.
Technology debt is a costly venture for companies that fail to invest in solutions that improve efficiency and can replace older, outdated tools. Understanding what it is and how it can affect your business helps you make smart, strategic decisions about your technology investments.
What Is Technology Debt?
Technology debt began as a term to describe software development. Often, developers opt for a short-term option, such as meeting a product release deadline, rather than doing the necessary work that would make the product better. It’s a decision that often ends up causing more work in the long run, with updates, operational problems and dissatisfied customers.
Recently, the term has taken on a broader scope. It is now used to cover the totality of your company’s technology stack — software, hardware, networks, integrations and security. It’s an issue that can affect every area of your company as it touches on the building, deployment, transformation, testing and processes used for your technology.
For example, consider the company that has an older, legacy finance solution that does not have the functionality to integrate with your sales platform or handle currency conversions. That likely means more manual data entry to add customer or financial information into one system or another, and paying for third-party add-ons to address exchange rates. There is a monetary cost, a higher risk of inaccuracies and the opportunity cost of not having newer tools that integrate business software.
What Are the Types of Technology Debt?
Technology debt can take on many forms, including lags in:
Here are several types of technology debt, one of which can actually be beneficial.
Consider legacy systems. They may represent several types of technology debt. If there’s a critical product or deliverable, it may make sense to keep the system as-is. They may be paid off and therefor inexpensive to use, at least in the short run. However, your competitors are going to replace those systems with better solutions that allow for the use of new technology, improve operations and give them a competitive advantage.
What Are the Consequences of Technology Debt?
There are several impacts that technology debt can have on your organization, in addition to the potential loss of competitive differentiation, including:
How Can We Address Our Technology Debt?
In the long run, legacy systems and other impractical technology debt will only hurt your organization. That’s why it’s so important to recognize technology debt and develop a plan to erase it.
Here are some key questions to ask to help assess and prioritize:
That structural information helps you begin to create a road map for how to address your technology debt. The steps to take include:
Often you can make some quick fixes that solve some issues, even if they’re not the highest priority. Quick wins can help build momentum and understanding, even if the software and legacy systems need to wait to be addressed fully. A cohesive plan for eliminating the debt requires a clear understanding of what it is, where it exists in your organization, the impact it has on your business and what can be done to address it.