What is technical debt?

by | Feb 9, 2021 | Business

Loosely defined, technical debt is essentially all the problems related to your technology due to a lack of planning and investment. So, like monetary debt, technical debt accumulates over time and grows largely because your business does not have an IT process in place. And, like monetary debt, the issues with your technology become interest-bearing, and this interest manifests in compounding problems: slow computers, crashing servers, lack of security compliance and many other issues. This of course results in real dollar expenses once it is time to face facts and fix the IT.

Staying with the financial debt analogy, the best way to manage IT is by having a sound process in place. If you have issues with your finances, an advisor will tell you that you need a plan in place to slowly improve the business’s bottom line. The same perspective exists for getting out of technical debt. You will want to enjoy all the benefits of having a healthy IT infrastructure.

Another way we think about technical debt is to think it through from the perspective of a new business. Nowadays, if one was to start a new company; in some cases, that person could pull their credit card out and create the business in a lean way. They won’t have to carry forward all the stuff that the older business would in theory have to deal with.

You can imagine a business that grows to 20 people. Let’s say that imaginary business uses 10 or 15 cloud applications per person. Imagine how unruly that can become if it’s not managed well. But the point is, new businesses have a good opportunity to start off on the right foot and not accumulate debt along the way, whereas old businesses almost always carry debt forward. It can be more difficult to fix because they’re typically dealing with older technologies that are more difficult to manage.

As a business leader, recognize that if your IT is not functioning well and is causing you more problems than it is helping, then you are in technical debt and it’s costing you something. That cost is not always visible at first blush.

If you can manage your IT in a way that gets you out of technical debt and onto the positive side of things, then you gain. For example, instead of spending your time talking about when you’re going to replace your old server or how to make it stop crashing, you’re going to be spending your time talking about how to utilize technology in a more advantageous way, how to grow your business, and how to have a better work from home culture for your company. Working from anywhere will become secure and productive.

Managing your IT is a process, invest in that process, take it seriously and do not let debt accumulate because it is hard to get out from underneath it once you’ve set up.