How federal agencies can measure the full cost of technical debt.

To accurately track and measure technical debt, agencies need to agree upon a standard definition of what it is, what specific components are included, and the methods available to remediate this debt.

Let’s start with a definition of technical debt. It includes the cost to renew legacy systems for current requirements and maintain software quality for acceptable risk, performance, and agility — in other words, to make these systems fit for today’s operating environment.

Accenture’s Technical Debt Model breaks down the component costs as follows:

  • Principal – This is the largest and easiest to measure and includes the cost to remediate and maintain legacy systems. Like financial debt, you make measurable progress in debt reduction by paying down principal.
  • Interest – These are the workaround costs such as staffing, delays, and redundant systems that must be maintained because decisions to integrate or retire older systems have been deferred. By not paying down principal, interest costs mount.
  • Liability - When systems are fragile and vulnerable, outages, breaches, or data corruption can occur, creating significant costs to patch software, restore systems, or in some instances replace hardware. Similar to deferred maintenance on a home, other issues surface that create additional, unforeseen expenditures.
  • Opportunity Costs – These costs are the most difficult to measure, but are nonetheless essential to understand, as they represent borrowing from the future due to the inability to support benefit-producing initiatives today. Current gaps in cost, performance, and security grow wider for every year modernization is deferred.

Assessing the impact

Not surprisingly, there is widespread consensus across the federal government to the significant challenges posed by technical debt. Respondents to the Accenture Federal Digital Decoupling Study reported:

  • 83% believe that technical debt greatly increases their organization’s IT costs
  • 80% believe that technical debt in their legacy systems severely limits their ability to augment or enhance these systems
  • 81% believe that technical debt in their legacy systems must be remediated before migrating to the cloud

Despite these constraints progress is possible as the Decouple to Innovate report highlights specific strategies that agencies can pursue to manage and remediate technical debt.

Dave McClure

Principal Director – CIO Advisory ​

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