The Dangers of Technical Debt

Though you may not be familiar with the term, technical debt is a very serious IT issues afflicting some companies. Technical debt is the liability created when a company allows its technology to fall below the needs of the business and the best practices of the market. What this looks like in action is PCs running antiquated operating systems, servers with inadequate processing speed struggling to run their applications, and Internet circuits without the necessary bandwidth to support the needs of a location.

This technology debt carries cost and risk that can have significantly adverse effects on an organization.

businessman frustrated with computer

Financial Debt

Like traditional debt, there is an “interest” cost associated with technical debt. This debt manifests in different ways, from a significant loss of man hours spent servicing outdated equipment, to a loss of productivity due to underperforming technology. This is not to mention the superflous resources and money spent on workarounds needed to accommodate legacy systems. All of these weights of debt burden a company with additional cost and slowed workflow, meaning your company loses a competitive edge.

Risks

There are also significant risks associated with the use of antiquated technology. Outdated operating systems and software are no longer patched, creating liable securitiy systems. Several of the high-profile virus attacks of the past few years exploited known vulnerabilities in end-of-life Windows operating systems, costing global economies tens, if not hundreds, of millions of dollars.

Lack of Innovation

When technology falls significantly below the state-of-the-art, a business is often unable to innovate and integrate within the marketplace because their IT infrastructure can’t support it.  Software can’t be upgraded because it won’t run on older operating systems. The operating systems can’t be upgraded because the PCs are too old and under-resourced to support them. This creates a cascading effect that paralyzes a company’s ability to operate efficiently and competitively.

frustrated businessman

All of these factors – the cost of supporting the technical debt, the risk it presents, and the curtailing of innovation – restrain a company’s competitiveness and profitability. Competitors who are unhampered by the burden of technical debt can take advantage of more innovative solutions to deliver their products and services. They can be more efficient in their operation and effective in how they meet their customer’s needs.

Organizations saddled with technical debt often believe – incorrectly – that their way out of their situation is to expend large sums of money on capital improvements. A few years ago, this would have been true. But today, where nearly all technology can be delivered as a service for a monthly or annual subscription, operating expenses replace capital expenditures.  And because the costs for servicing the technical debt would be eliminated, the net cost of the services are reduced by those savings.

As with financial debt, the key to eliminating technical debt is to create a plan which strategically and methodically attacks each area of technical need, replaces outdated technology with state-of-the-art services, and ensures an organization can operate efficiently and securely. That’s what the team at TecFac specializes in. With over 20 years delivering innovative IT solutions to organizations large and small, TecFac understands how to attack technical debt to keep your company competitive and ahead of the curve.

Contact TecFac for a consultation today.



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