Are legacy systems holding your company back? Do you have manual processes in place to fill the gaps from old technology that hasn’t been updated or maintained? Is your IT budget constrained by maintenance costs for old servers and operating systems within your ever-growing network? These are the various ways that technical debt is hampering innovation and progress within organizations. Tech debt is the hidden, back-office monster under the bed that everyone talks about but no one really knows how to attack it.
What Is Tech Debt?
At the height of the 2022 holiday travel season, Southwest Airlines experienced a massive outage of its scheduling system that affected 2 million customers and resulted in the cancellation of 16,900 flights. Southwest experienced an immediate 16% drop in its stock price and logged a loss of more than $800 million that fiscal year due to this outage.
Significant winter storms that year had disrupted air travel across the United States and forced most airlines to cancel flights and scramble to rebook their customers. While other airlines recovered in a matter of days, Southwest Airlines took weeks to return to normal activity. Its recovery from this event was significantly hampered because of its legacy IT systems. Its IT team and leadership had known for quite some time that their systems needed upgrades and critical maintenance, but this work was never given priority or funding. Southwest was assessed another $140 million fine a year after this event for its failure associated with the outage. The outage was pure tech debt, but the problem and the potential risk were never sufficiently addressed within the organization.
Why would executives accept such high risk related to their legacy systems? One probable explanation is that while they recognized that tech debt was an issue, no one was able to sufficiently measure it, and the systemic risk was not sufficiently quantified. This is a problem for most organizations today; they know that they have challenges from their tech debt, but they don’t understand the depth of those challenges, nor do they recognize the extent to which they are accepting systemic risk related to that tech debt.
The consequences of tech debt permeate the enterprise. They encompass hidden IT costs, increased operational risks, compromised security, hindered innovation, and challenges in adapting to change. Tech debt has evolved into a multifaceted challenge that demands the attention of leaders, from the CIOs responsible for technology strategy to the CEOs focused on the organization’s bottom line. Time-to-market decisions can cause tech debt to accumulate across the entire infrastructure in the same way that it does for custom code.
Enterprise tech debt is not always the result of poor decisions; it can easily accumulate within an enterprise as the result of a rapidly changing technology stack and extremely interconnected business-critical systems. The more tightly coupled enterprise systems are, the more prone they become to enterprise tech debt and the more challenging they become to update due to the interconnected interfaces, sharing of data, and intertwined data pathways. Thus, the maintenance, support, and improvement of these tightly coupled, critical business systems become much more challenging and expensive, and they often get deprioritized in favor of more revenue-generating activities. This lack of maintenance is one of the factors of accumulating tech debt and increasing the tech debt leverage (a measure of tech debt as a percentage of the entire enterprise tech stack) within an organization.
How Do You Measure and Manage Tech Debt?
As management expert Peter Drucker famously said, “If you can’t measure it, you can’t manage it.” Unless you track and measure your tech debt, how will you manage it? There are a number of steps to take to measure and manage tech debt. They are:
- Establish a clear definition for what your organization considers tech debt. Without a clear definition of tech debt, the term becomes a meaningless bucket into which everything that isn’t the new shiny technology can be dumped.
- Put in place mechanisms for measuring that debt across your enterprise. This involves:
- Evaluating how much time and effort is needed to maintain old systems
- Measuring the security vulnerabilities in those old systems
- Assessing the duplicative costs of similar but disparate technologies within your tech stack that exist in silos throughout the organization
- Bring all these measurements together into a single view so that you can present your tech debt leverage to the executive team and to the board and use this to clarify the systemic risk within the organization that you are accepting by not addressing the tech debt.
The corollary of Drucker’s famous quote still holds true and applies directly to enterprise tech debt: Once you measure it, you can manage it.
