Digital transformation: 5 tricky ways technical debt holds you back

Digital transformation: 5 tricky ways technical debt holds you back

Surprise: Not all technical debt is bad debt for companies doing digital transformation work. But some can leave you facing bankruptcy at a bad time

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4. Assuming technical debt is only for old companies

You can accumulate debt even with cloud-based software.

Legacy systems that have atrophied over the course of decades are one form of technical debt, but that is not to say younger organizations and cloud software do not accumulate burdensome debts in the choices they make.

Lorenzo White, former VP of IT at Emergent Capital and current virtual CIO consultant to small and midsize businesses, recalls that one organization he worked with had adopted NetSuite’s cloud software as its CRM system but implemented it in such an undisciplined way that it became a drag on the business. One problem: a pattern of adding custom fields to the CRM system without much consideration, often at the insistence of the head of the company. This continued until the organization had used the maximum number of custom fields that the cloud system supported at the time – meaning that for any new field of data the company wanted to track, something had to be removed.

In addition, the system had been built up around the assumption that records needed to be tracked and analyzed by the customer, and new business processes made important to be able to view and analyze the data by product. These issues, combined, inhibited the organization’s ability to introduce new products and develop new revenue streams.

“Eventually, we decided we had to bankrupt this and start fresh,” White says. At that point, he had to intervene to stop a rush to judgment about what the next system should look like. The customer moved to a CRM with more industry-specific features baked in, limiting the need for custom development.

5. Failing to plan to address debt later

When an organization creates new applications and systems to deliver on its digital transformation vision, it may create the kind of technical debt Ward Cunningham was thinking of when he coined the term. Again, taking on a moderate technical debt load may make sense if it allows the organization to beat the competition to market with a revolutionary capability that opens up new markets.

The problem comes when the organization fails to plan to address those debts later, allowing them to lay the seeds for future problems with flexibility, scalability, or security – potentially eclipsing the gains of the digital transformation initiative.

Large organizations may achieve success by keeping those programs separate from the rest of the organization, often with separate funding and their own independent IT teams, Scavo points out. “That allows them to get going faster, but then they run into problems with integration with the rest of the organization.”

Overall, the trick is to use technical debt in ways that give your organization leverage to achieve its goals, including long-term goals that will be achieved only after those debts come due.

[ Get answers to common digital transformation questions and lessons from top CIOs: What is digital transformation? A cheat sheet. ]


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