How Ineffective Sourcing Strategies Affect Your Tech Debt Index
We all know Ward Cunningham’s definition of tech debt in software terms. However, in the modern age, technical debt goes beyond just software and coding strategies. The root of it stems from business and IT decisions you make without realizing the long-term enterprise operational implications. Just like a credit card balance or a student loan debt that you cannot eradicate, tech debt does not disappear without action; you must pay it down. Not only that, after you pay it down, you must continue to manage tech debt effectively to avoid unrestrained accrual. Sorry, there is not going to be a presidential technical debt forgiveness program, no matter how hard you try to avoid acknowledging the hard work you must do to address the big elephant in the room. Just like the current situation where the student loan forgiveness program is doomed and faces countless legal hurdles, the only way out of technical debt is to pursue a workable path — that is, effective debt management and understanding how to make smart enterprise software and IT application decisions now, which impact your future enterprise landscape and business operations.
Not all tech debt is bad. We don’t want to create such stringent tech debt management strategies that we stifle innovation. Just like not all financial debt is bad (think real estate mortgage debt, which is beneficial as it helps you build long-term equity and generational wealth), not all tech debt is bad, either. True innovation measures absolutely require that you take risks — and taking risks implies that you will have to make initial software build, implementation decisions, or deployment strategies or test the market with your MVP, with the understanding that you are building long-term equity with strong future returns or possible high future valuation. Early risks here pay in spades later. Tech debt in this scenario is an afterthought — although only at the initial stages.
But when does tech debt turn into a problem? At some point tech debt needs to be addressed as it can further inhibit future innovation; that’s why it’s said that innovation is never linear, but rather a continuous cycle. In fact, the COVID-19 pandemic exacerbated the situation. The pandemic caused customers to go on a spree of modernizing their applications, buying new tech and bingeing on cloud consumption. On the way, they tried to adopt a mix of best-of-breed software, tools, and practices, which in turn has led to a complex tech debt management problem at hand.
Look beyond software strategies for long-term solutions. If it is true that today’s technologies are tomorrow’s technical debt, how can enterprises modernize without sowing the seeds for future deficits? One fundamental and indispensable aspect to avoid future tech debt in your modernization and transformation journey is to look at your partnerships and the vehicles that drive that partnership: your RFPs and contracts! This poses a challenge, as unfortunately most are rooted in old traditional ways that have not matured to catch up to fast-changing enterprise software market dynamics. They also do not address long-term impacts on your market success as an organization and on your business outcomes.
Organizations should embrace alternate approaches to sourcing, RFPs, and contracts as another tech debt management strategy. To get an in-depth analysis, take a listen to this episode of Forrester’s What It Means podcast: Unique Solutions To Reduce Technical Debt.