Managing an Organisations Technical Debt

Many CIO’s are facing a growing problem of managing technical debt. Often forgotten about and not addressed, it can accumulate over time to become a major issue for businesses. Adopting cloud is seen as the answer to paying off that technical debt. But, it’s not quite that simple.

This article explains what businesses should do in order to address this growing issue.

What does the term 'technical debt' mean?

Technical debt arises when companies fail to invest in the normal maintenance of their IT systems (applications or infrastructure systems) over a certain number of years. At one point, this becomes a cost for companies; they have to remediate this technical debt by investing in large projects to catch up and stay up to date.

This is a very common issue because companies often don’t like to invest in areas that do not directly feed strategic goals. The maintenance tasks that are not considered to be important or urgent get neglected because the focus is placed on the high-value areas that are important to the business. But over the years, if systems are not invested in regularly, this lack of attention becomes of a truly high-risk.

The top risks companies suffer from not managing technical debt

Certain types of Technical Debt can remain identified as low priority issues for a long time: Potentially until the business asks for new functionalities in applications that cannot be delivered in certain old systems. Organisations can suddenly find themselves in a position where they have to upgrade everything; they have to create a large project or programme to bring everything to a new standard

Technical Debt risks increasingly come up on company risk register: Highly regulated industries with enhanced security risks, or even risks associated with regular compliance, businesses suffer an important risk of being out of compliance from not managing Technical Debt effectively. It is a very serious issue that encompasses the impact both in terms of brand and impact on the customers. Furthermore, many companies in these industries have a lot of integration requirements: many different applications and much integration to perform. It is in these cases when isolated large-scale upgrade programmes should be more aggressively avoided.

The risk that is felt the most by companies is the opportunity risk of not being able to perform actions that can improve a company’s strategic position.

These large programmes become a significant one-off cost and are more expensive than maintaining systems regularly. Not only it is a financially costly procedure, but it places a strong strain on a company’s limited resources.

Ideally, IT want all their manpower spending all their time on developing new functionalities and, more generally, on value creation for the business. However, to remediate technical debt in order to meet strategic goals or to reduce levels of risk, these resources have to be taken out of value-driving projects into maintenance projects.

This is what organisations are forced to do, but it is what they shouldn’t do. What they should really be doing is to make this part of the company’s regular maintenance programme. They should have an investment programme that is governed on a yearly basis; ideally per business unit, per application, where it is part of the regular maintenance.

Enablers of effective management of Technical Debt

In order to avoid costly, resource-straining, bulky technical debt remediation programmes, there are new technologies, tools and ways of working that can be harnessed to be able to aim to retire technical debt.

Cloud is supposed to take care of the problem of technical debt: The problem of replacing hardware vanishes because the cloud is built in such a way that it is upgraded regularly, without looking at the infrastructure underneath it
DevOps and Agile: In a cloud native IT department working in a DevOps way, the person who creates the code, creates and develops the application and also takes care of the technical debt. Granularity of ownership helps to become closer to retiring technical debt; as operations are handled by the developers, the problem managed proactively
New ways of working: By getting closer to IT, the business is participating in the progressive technical upgrade and will understand that regular maintenance and expenditures are a part of business

First steps to manage Technical Debt

Create a risk assessment framework

One of the mandatory first steps is to create an effective risk assessment framework that will be used to look at the IT landscape, with infrastructure and applications, to monitor what is out of date and what is not. Today, the best approach is to perform this at an application-level downwards. That is, looking at the application portfolio and the stack underneath it, up to the infrastructure to identify risks at any level. The risk can exist at the application layer itself, at the operating system level or in the machine.

This exercise is particularly hard but critical for integrated systems is to figure out the dependencies between applications that are all rather dependent on each other. With the risk assessment framework comes the risk analysis and the prioritisation of activities.

Secure funding

The risk assessment should come with a business case associated with the prioritisation of investments. Companies who have accumulated a lot of technical debt need to set up a programme to invest in.

When technical debt is managed in a gradual way, the steps to-follow are less rigid, although sometimes this is not possible if severity is too high.

Conclusion

Wavestone has a toolset that analyses both the infrastructure pieces and the applications in one go. This gives our clients a view in terms of risk, but also in terms of transformation budgets. Another aspect that many of our clients are really interested in is the identification of quick-wins. This answers the question of “what applications can I easily re-host part into the modern landscape?”

Our framework performs appropriate analysis and at the same time includes the business case, including the investments required to empower our client with a global, all-rounded view of their technical debt and how to manage it. Often, clients struggle pushing such a program internally, where our consultants, many with a background, not only in consulting, but with deep knowledge of infrastructure and application technical aspects, can effectively push these ideas and this prioritization within the organization.

Overall, Wavestone offers a success-proven toolset and mobilization process; two of the key benefits that our clients see.