Technical debt spend is increasing – and here’s why

When it comes to digital transformation, one of the largest (if not the largest) factor in its success is spend. How much is forecast vs. the real thing can be a very unpleasant surprise indeed if there’s insufficient planning. Technical debt is one of these unexpected costs. And where project managers are unaware of technical debt and its impact, the greater the cost is going to be. A greater cost of a digital transformation project leads to delays, unhappy customers (and investors), and sometimes a sub-par end product because the money ran out.

Insurers in particular, as they grow over time, will introduce new systems, sunset older ones and continue support for others. A patchwork architecture evolves and, as most are business-critical systems, they continually crave attention and upkeep. Many of those systems need to interact, and many need a significant amount of technical (and non-technical) resources available to maintain them.

Some debt is inevitable; however, there are aspects of technical debt (similar to regular, financial debt) that can be avoided with careful planning and attention to detail. It is to be noted though that technical debt is rarely accrued through malicious intent or obvious incompetence. Usually, it’s amassed inadvertently when people haven’t been keeping their eyes on the ball.

CIOs believe technical debt spend is increasing

technical debt spend


Culprits of technical debt

Common culprits behind technical debt problems include:

  • Insufficient project and programme planning
  • Lack of appropriate talent
  • Lack of shared values
  • Insufficient understanding of the problems caused by technical debt – especially that of the bigger picture
  • Lack of communication between teams on the programme (and IT)

….and more. The list can go on and on, ultimately it’s these common poor practices that accrue technical debt; which is increasing the unwanted spending on programmes.

Investment in technical debt vs unnecessary spending

Investing in Technical Debt is different to increasing spending. The costs of fixing issues caused by technical debt cannot always be planned for; tend to happen after the damage is done, so the budget needs to be scraped together at the last minute (and taken from elsewhere).

Investing in technical debt spend is different. This is part of the planning process. especially if you’re producing a product that needs to go to market quickly, technical debt can be deliberate and planned for. The cost of speed vs later fixes can be budgeted suitably.

Other undesirable technical debt costs include an impact on performance. As code becomes more complex, it will begin to perform poorly. Often, no one has looked at the application since the early design phases, so inefficiencies are common (but avoidable with the right Solution Assurance partner). Ineffective applications will cost you in more ways than response time and slowdowns (which also cost you customer loyalty).

For more information on the different types of technical debt (and how to avoid accruing it), check out our whitepaper here. We’re Solution Assurance experts and know a fair thing or two about how to plan for and around technical debt problems.