In the fast lane: How technical debt drives agile business transformation

While debt can take various forms, the meaning remains: we owe something to someone in due time. But what if we told you that having some form of technical debt could help you achieve your business goals?

In this edition of The SoftwareOne Scoop, we will discuss technical debt, its role as a catalyst for accelerated business transformation, and steps to retire your debt. By doing so, you can turn challenges into opportunities.

What is technical debt?

To begin, let’s break down what technical debt really means. Technical debt can be described as the price companies pay for short-cut fixes in IT implementations – think quick solutions adopted during the pandemic. Until this lingering debt is cleared and paid, companies cannot succeed in digital transformation or even get good value from their existing technology investments.

According to McKinsey & Company, technical debt is defined as the “off-balance-sheet accumulation of all the technology work a company needs to do in the future.”

As stated by Forbes , technical debt consumes nearly one-third of technology budgets and more than one-fifth of technology professionals’ time. Further, 70% of CIOs and other technology leaders consider technical debt a pitfall when looking to innovate.

Taking this a step further, in 2023, SoftwareOne surveyed 600 IT leaders to understand better their IT spending, priorities, and goals for the year ahead. The results were unmistakable – technical debt hampers digital transformation. In fact, 92% of respondents stated that digital innovation will drive new revenues in 2024. However, this could be difficult due to the amount of technical debt they’ve accrued. To add to this, over 72% of those surveyed also stated they are behind on digital transformation because of – you guessed it, technical debt.

Unlocking insights into your technical debt.

You’re probably wondering, “With all of that in mind, how could technical debt possibly help accelerate my business outcomes?” Aside from the short-term fix of completing a project quickly, the first step to managing technical debt is being aware that it exists in the first place.

This realization on a deeper level can unlock many important clues and insights into how your organization is running and operating today. Some things to consider:

• Where is your technical debt primarily stemming from? Are developers facing tight deadlines resulting in building applications or quick solutions to meet project timelines?
• Are teams with limited experience or knowledge making quick decisions that could cost you down the line? Or are teams encountering cross-functional communication gaps, resulting in shadow IT or missed renewals?
• Are budget constraints causing teams to cut corners?

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Much like a doctor may talk to a patient about the lifestyle choices that could contribute to their symptoms and diseases, an organization investing in resources to look at the actions and outcomes of your organization on a deeper level could improve business processes, employee satisfaction and relieve technical debt.

Though many would argue there’s never a right time to go into technical debt, knowing when to release a feature or take out a loan for a project can help your organization reach that next milestone for success. Similar to how personal financial debt can assist in crucial investments like buying a house or funding education, businesses might incur technical debt. Nevertheless, it is crucial to effectively understand, oversee, and control your technical debt to prevent any detrimental impact on your business.

Start building a strategy to manage technical debt today.

Managing technical debt is a critical aspect of any software development process, and with the right team and resources, it becomes a surmountable challenge rather than an insurmountable burden.

Investing in tools and technologies supporting code analysis and refactoring can significantly expedite debt reduction. The right resources, both human and technological, empower the team to streamline development workflows, enhance code quality, and minimize the impact of technical debt on the overall system.

Ultimately, a well-managed approach to technical debt, supported by a capable team and ample resources, mitigates risks and fosters a more sustainable and agile development environment. This proactive stance ensures the long-term health of the codebase and allows the team to adapt swiftly to changing requirements and evolving industry standards.

Here are three steps to begin managing technical debt.

1.??? Examine your current environment and identify what part of technical debt you want to tackle first.

2.??? Consider moving workloads and applications to the cloud.

3. Deploy a FinOps practice to assess and comprehend the performance and capabilities of cloud platforms and services.

Ready to tackle your technical debt and learn more about the three steps above? SoftwareOne has helped many organizations reduce their technical debt and optimize what they currently own. To learn more about SoftwareOne’s Application Modernization Services, or to start a conversation about reducing your technical debt, get in touch with us today.

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