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Is technology debt bankrupting your competitiveness?

It’s time to address tech debt to free up money and resources for innovation and strategic investments.

OVERVIEW

Technology debt is more than just the sunk costs of hardware, software and code. It is the inefficiencies, duplicate processes and extra work created by an outdated or out of control technology architecture. Recognizing the full scope of technology debt allows organizations to address it, and, in doing so, tip the balance from maintaining to innovating.

In response to the push and pull of innovation vs. legacy, enterprises try to address their technology debt with a short-term view. This approach is ineffective in managing debt, and may actually add to it. Instead, organizations must take a step back and plan strategically across all technology platforms, processes and people.


VIEW THE REPORT [PDF]
Application + Architecture + Infrastructure = Technology Debt

KEY FINDINGS

Legacy environments carry both an operating cost and a cost of change that becomes prohibitive as technology debt continues to pile up. Unmanaged debt increases organizational costs and reduces agility over time.

When it comes to reshaping industries, new digital entrants have the distinct advantage of being unburdened by legacy systems and technology debt.

  • Eighty-five percent of executives believe that legacy hinders their ability to move to a more digital model.

  • A typical IT budget may allocate up to 90 percent to maintaining the current state and just 10 percent on innovating.

Remaining competitive means winding down tech debt, but many organizations are not equipped to embrace this as an issue beyond IT.

  • Just 23 percent of high-performance businesses say their CFOs are active in identifying what technologies should be retired.

  • Only 6 percent of financial services board members have professional technology backgrounds.


85% of executives believe that legacy hinders their ability to move to a more digital model.


85% of executives believe that legacy hinders their ability to move to a more digital model.


READ THE INFOGRAPHIC [PDF]

RECOMMENDATIONS

To create a strategy for dealing with technology debt, executives must gain a full understanding of it, and of what it is doing to their organization’s ability to innovate and grow. An effective IT strategy should be built around these key steps:

Replace "buy and hold" with "asset light" when it comes to technology investment.

Replace "buy and hold" with "asset light" when it comes to technology investment.

Isolate technology debt and focus on paying it down through a “good debt/bad debt” approach.

Isolate technology debt and focus on paying it down through a "good debt/bad debt" approach.

Keep moving on the digital front by investing in digital plays or greenfield programs while winding down debt.

Keep moving on the digital front by investing in digital plays or greenfield programs while winding down debt.

Realign ownership for tech debt across the entire C-suite, and rethink the CIO’s role to get everyone vested in the debt vs. innovation decisions.

Realign ownership for tech debt across the entire C-suite, and rethink the CIO’s role to get everyone vested in the debt vs. innovation decisions.

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