DXC Leading Edge has published a new study that shines a light on a crucial issue with profound implications: technical debt.
Our survey of 750 IT executives across industries and around the globe revealed this stark reality: A significant majority of businesses are burdened with substantial technical debt. Ninety-nine percent of respondents indicated that tech debt was reflected directly or indirectly on their risk registers. This debt can become a barrier to progress, limiting organizations’ ability to scale, operate at top speed or respond to evolving market demands.
We firmly believe that confronting technical debt head-on, across the organization, fosters greater agility and forward-thinking. Our report, Embracing modernization: From technical debt to growth, lays out our remedy for tackling the issue, which includes reframing technical debt as an integral facet of modernization efforts.
Achieving this transformation requires collaboration between IT leaders and business colleagues. When executives shift from seeing tech debt as an isolated IT issue, collective accountability increases. Indeed, technical debt is better termed as organizational debt. It is an umbrella term that covers infrastructure, application, user experience (UX), data and process debt, combined with knowledge debt — a drain of systemic intelligence.
Think about it this way: When UX debt makes a customer’s journey seem like a trip back to the 1990s, it’s a marketing problem, not just an IT concern. Process debt creates the potential for organization-wide disconnect. As for knowledge debt, an organization’s collective amnesia can make change even harder to effect.
Today, CIOs and CTOs are responsible for dealing with tech debt, according to more than 70% of survey respondents. In order for the organization to be well-positioned to corral and control debt, business leaders need to own the issue, as well.
Reframing debt as opportunity
As you’ll read in our report, we see tech debt as an opportunity to innovate, adapt and grow. With the right mindset, tools and collaboration, organizations can harness it to their advantage. The objective isn’t to eliminate tech debt but to continually modernize, adapting to new requirements.
Nearly two-thirds of those surveyed, however, noted that their modernization programs would be “completed” within 3 years. That can’t be true. Modernization must be ongoing — a cycle of continuous evolution. It requires strategic thinking about technology’s role in an organization. Veering toward efficiency might sacrifice flexibility, while favoring innovation could lead to costs spiraling out of control if not managed astutely. Achieving balance that reflects an organization’s strategy requires periodic reevaluation.
Modernization moving forward
When asked about how to move forward to modernize, IT executives prioritized the following activities:
Architecture tops the list, but it’s a very tight grouping. Building cloud-native systems is the driving force behind replacement (the second most selected). Positions 3 and 4 went to automation (preparation or retooling processes). Digital products and pipelines are in the final position.
In our report, these activities are placed into context by industry and by the area in the business where projects are underway.
For example, in aerospace and defense, supply chain interests resulted in a focus on reinventing processes to support digital projects and pipelines; changing the workflow/process to enable automation; and replacing with net new applications/platforms. In insurance, customer relations activities prioritized improving user interaction; modifying the architecture; and replacing with net new applications/platforms.
Dealing with realities
The illusion that modernization can be completed, and all debts settled, is dangerous. Both black swan events and advancing technologies can be unpredictable. What you can control is making your organization agile and adaptable.
In one case mentioned in the report, a retailer’s move to cloud, driven by compliance needs, banged up against expiring technology. With the right approach, the retailer revamped by moving to a more modern architecture organized around business capabilities that proved a win for tackling org debt. Similarly, a health insurer needed a cloud-based revamp, with flexibility being crucial. The insurer’s solution? A series of sprints that improved continuity and efficiency.
Those who have bounced back share one trait: They spoke about their debt, loud and clear. It’s time to measure, verbalize and act, because in the end, org debt isn’t just an IT issue; it’s a business reality.
In our report, you’ll discover one way to enable discussion — using a guide developed by DXC Leading Edge that will help you consider the multiple dimensions of debt and how you can engineer in options for flexibility. (See Figure 3 in the report.)
Embracing modernization: Taking action now
Org debt is primarily a result of delaying adaptation to an ever-evolving environment. Accordingly, resolutions are centered on restoring the organization’s ability to accommodate change. Our report lays out four prescriptive steps to take now to empower you to streamline processes, fortify technological infrastructure and cultivate a culture of continuous improvement:
1. Reframe org debt as modernization
2. Define opportunities
3. Clear your barriers
4. Organize for execution
The report includes details about implementing these steps, which are critical to driving the ongoing and collaborative process of modernization. When modernization is done properly, the benefits are felt across the whole business. When viewed clearly and articulated fully, org debt can be flattened, understood and managed thoughtfully as part of the balance sheet of a healthy business.
We encourage you to read the full report and discover more about how to confront the challenge of tech debt and move forward to shape your organization’s future.