Manage Tech Debt Urgently To Prevent Tech Bankruptcy – CDOTrends

Technical debt is a growing issue for many organizations. Forrester’s Q2 2024 Tech Pulse Survey revealed that only 21% of U.S. IT decision-makers report no significant technical debt. In contrast, 49% face moderate levels, and an alarming 30% struggle with high or critical debt. This growing burden — caused by past decisions, time constraints, or external pressures — competes with the ability to pursue new initiatives. Like financial debt, tech debt accrues interest, too. The longer it remains unresolved, the more resources are required to fix it. It impacts the delivery of new projects and weakens operational resilience, including security.
The first step in managing tech debt is acknowledging its presence and recognizing that not all is bad. Sometimes, it’s taken on intentionally to meet deadlines, with a plan to address it later. Application portfolio rationalization with architecture reviews helps identify redundant and overlapping applications. They offer opportunities to consolidate and merge functionality, reducing overall complexity. Analyzing bugs and service tickets can also help identify potential problem areas. From these insights, immediate action plans should be developed to address the identified issues.
Tech debt can act as an innovation killer by diverting resources from new ideas and projects. In Forrester’s Modern Technology Operations Survey, 2023, 16% of global digital and IT professionals said that their firms do not prioritize addressing technical debt, negatively impacting stakeholders. To tackle this challenge, companies can benchmark operational costs against industry best practices, implement sustainable cost optimization programs, and closely monitor and analyze regular maintenance expenses.
Early intervention is the most cost-effective way to prevent tech debt from spiraling into tech bankruptcy. Tech bankruptcy occurs when debt becomes so overwhelming that maintaining or upgrading systems is no longer feasible, requiring drastic measures like complete overhauls or abandoning outdated technologies. To avoid this, incorporate technical debt into the same product backlog as new features, tracking it by time to resolution. Escalate and investigate any significant delays, as failing to address this backlog poses a serious risk.
Managing tech debt is an ongoing process that requires commitment from the entire development team and its stakeholders. By acknowledging and strategically addressing tech debt, organizations can maintain the agility and health of their software systems, ensuring they continue to meet the needs of users and the business. In our survey, U.S. IT and technology decision-makers indicated that, on average, their firm dedicates 20% of its IT budget to this cause.
The original article is here.
The views and opinions expressed in this article are those of the author and do not necessarily reflect those of CDOTrends. Image credit: iStockphoto/artisteer
Biswajeet Mahapatra is the principal analyst at Forrester. He focuses on initiatives enabling CIOs to ramp up their digital transformation journey, including building the digital strategy/roadmap, adopting new technologies and best practices, extracting more value from existing investments, prioritizing key initiatives, negotiating critical contracts with vendors, and managing vendors. 
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