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How CIOs Should Be Managing and Reducing Technical Debt
Managing technical debt doesn't have to be daunting. By implementing the proper steps, organizations can mitigate technical debt and further increase business agility and competitiveness.
5 Min Read
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No matter whether you are the IT decision-maker at a small business or the CIO of a global enterprise, technical debt affects your IT infrastructure’s efficiency, security, and scalability. As technical debt accumulates in organizations in all industries it is critical to consider practical ways for understanding, managing, and eventually reducing these liabilities.
What is Technical Debt?
Technical debt is the future cost and complexity that businesses incur when they opt for quick and easy solutions in their IT infrastructure, rather than more robust and sustainable options. It is like taking on financial debt, where future obligations offset the gains. Consider it a compromise between rapid deployment and optimal solutions -- a crucial choice for businesses where agility and scalability are paramount.
For instance, a company uses outdated software because upgrades are time-consuming, resource-intensive and costly. While this supports immediate operational continuity, it increases security vulnerabilities, compatibility issues, and future maintenance challenges.
Another example is a business implementing a patchwork of independent systems for different departments. Initially, this approach seems efficient, but eventually, integration challenges lead to data silos, inefficiencies in communication, and increased data reconciliation and system maintenance costs. In both cases, the short-term benefits are outweighed by long-term drawbacks, which is the essence of technical debt for businesses.
How Does Technical Debt Accumulate?
Technical debt can quietly accumulate, often with far-reaching consequences. Here are several examples:
Artificially accelerated development: Imagine a retailer launching an e-commerce platform under tight deadlines. To meet the launch date, the development team skips thorough testing and best practices in coding. This produces a platform with frequent outages and security vulnerabilities, requiring extensive patches and updates.
Lack of standards: Consider a financial services firm where each department independently develops its own IT solutions. Without unified coding standards or architectural guidelines, it ends up with a mix of incompatible systems, leading to increased costs and time spent on integration and maintenance.
Legacy technology: A manufacturer continues to use an old inventory management system, to save on the upgrade cost and effort. Eventually, this system becomes incompatible with new software and hardware, creating inefficient manual processes and increased errors.
Deferred maintenance: A healthcare provider postpones regular updates to its patient record system to save money. This delay renders a system that's not only slow and inefficient, but also vulnerable to security breaches, ultimately costing more in finances and patient trust.
These scenarios exemplify how technical debt can accumulate in different business environments, often leading to more significant issues and increased expenditures.
The Ripple Effects of Technical Debt
For any CIO, the impact of technical debt should be a significant concern. These effects can extend beyond the IT department, impacting overall business performance, employee morale, and the ability to innovate and respond to market changes. Some consequences include:
Diminished productivity: Increasing technical debt can divert focus from innovation to maintenance, especially critical in hybrid architectures where integration and efficiency are key. For example, a software development company, burdened by legacy code and outdated systems, realizes its developers are spending more time fixing bugs and addressing compatibility issues than working on new features. This delays product development and diverts resources from strategic projects.
Escalating costs: The longer issues persist, especially in interconnected systems, the more costly they become. Imagine an online retailer that ignores database updates. Over time, the system becomes inefficient, leading to longer loading times and frequent crashes. The cost of overhauling the system later, coupled with lost sales due to poor customer experience, far exceeds the initial savings.
Reduced agility: High technical debt can impede adaptability, a critical setback in hybrid environments where flexibility is essential to respond to market shifts. Many companies using a patchwork of legacy and modern networking systems often struggle when quickly implementing new technologies. This lack of agility would hinder that company’s ability to adapt to new market trends, hindering competitive advantage and revenue opportunities.
Lower morale: Teams grappling with high technical debt in complex systems may face demotivation, impacting overall productivity. For example, software engineers at both tech startups and established DevOps teams often are “firefighting” issues in a hastily built application. Without a cloud-native solution for platform engineering, the ongoing stress and frustration will create decreased job satisfaction and higher turnover rates amongst their developers, further impacting the company's ability to innovate and grow.
CIO Strategies for Mitigating Technical Debt
Here are three practical ways a CIO can mitigate their tech debt:
Prioritization: Recognize that not all debt is detrimental. Focus on reducing debt that significantly risks productivity or security, especially in hybrid systems where complexities are greater.
Dedicate time for refactoring: Allocate regular intervals within development cycles for refactoring and addressing technical debt, crucial for maintaining the health of hybrid architectures.
Prevent future debt: Establish robust coding standards, conduct thorough code reviews, and ensure continuous training to prevent new technical debt, particularly important in diverse and evolving hybrid environments.
While managing technical debt is an inevitable part of any IT strategy, it doesn't have to be daunting. As a CIO or IT decision-maker, you can turn this challenge into a strategic advantage. By implementing the proper steps, organizations can mitigate technical debt and further increase business agility and competitiveness.
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