Technical debt is a debt you pay interest on every day

In the boardroom, conversations about technology almost always start with cost. Not with what an organisation wants to achieve, but with what it will cost. That makes sense, because costs are at least visible on paper. Our research into the digital reality of European organisations shows that most organisations have a solid understanding of their overall IT spend and a rough idea of where the pressure points lie. What they rarely do is bring cost, value and risk together in a single decision. The insight is there. What is often missing is a clear path to improvement.

 

“Insight is rarely the problem,” says Steven van Dam, strategy consultant at Conclusion. “The challenge is turning that insight into a decision.

Technical debt may sound like a technical issue, but it is not purely an IT problem. It affects the entire organisation. It works like a debt that builds up when you choose the quick solution over the right one. In the short term, that choice is often understandable. It may be the cheaper option, leaving budget available for something else. Or it may be a decentralised initiative that sits outside agreed architectural principles but gets you operational quickly. Either way, you end up in a suboptimal situation with a limited lifespan. That is the debt you accumulate.

 

And debt comes with interest. In this case, that interest does not appear as a figure on a statement. It is more subtle: changes take longer, work becomes frustrating, and eventually a business requirement no longer fits the system or a security vulnerability can no longer be properly resolved. “The bill always arrives,” says Steven. “You just do not know when, or how high it will be.”

When systems start to creak under pressure, the usual response is a workaround. One more adjustment that creates just enough breathing space. “Optimising within an outdated landscape is postponing transformation,” says Steven. “You are doing the same things slightly better, instead of doing something fundamentally different.” Every workaround increases tomorrow’s debt. Before long, organisations become trapped in their own landscape and their ability to innovate gradually erodes. Future costs, such as migration costs, continue to rise. So does the business value left unrealised. And those are often the most significant items on the technical debt bill.

The most difficult decisions around technical debt concern what cannot be calculated precisely. “Executives want to know: what are my options, what will they cost, and what happens if we do nothing and leave things as they are?” says Steven. “Growing security risks and missed business opportunities cannot be fully quantified. But the risk of incidents increases every day, and the opportunities you miss continue to accumulate.”

 

Waiting may feel rational, but in reality it means allowing the interest to keep growing. “You can choose not to invest and consciously accept the risks. If you do, make sure it is an explicit decision, taken with a clear understanding of the consequences.”

Control does not emerge from reports. It emerges from the conversations where strategy, business and IT come together to weigh cost, value and risk. “Too often, those three groups are still talking past one another,” says Steven. “And strategy is just as much about deciding what to stop doing as it is about deciding what to pursue.” The question is not whether you have technical debt. Every organisation does. The question is where it is holding you back today. Start by mapping your technical debt and the risks associated with it. Then prioritise your actions against your strategic objectives. Which solution delivers the greatest value to the organisation?

 

As long as decisions about technical debt are postponed, both the debt and its interest burden continue to grow, making intervention tomorrow more expensive than it is today