NEEDHAM, Mass.–(BUSINESS WIRE)–#IDCResearch–Enterprise technical debt has evolved into a multifaceted challenge that demands the attention of all executive leadership, from the CIOs responsible for technology strategy to the CEOs focused on the organization’s bottom line. To help executives understand the profound impact of enterprise technical debt on their organizations, International Data Corporation (IDC) has developed a framework that outlines the critical steps required to measure and manage technical debt.
In its earliest form, technical debt was synonymous with coding shortcuts: hasty decisions that aimed to meet deadlines but often led to messy, difficult-to-maintain code bases. The concept of technical debt resonated with software developers and became a valuable metaphor for explaining the trade-offs involved in software development. It highlighted the importance of balancing short-term gains with long-term sustainability and quality.
Over time, the idea of technical debt expanded beyond custom code to encompass broader technology-related decisions within organizations, giving rise to the concept of enterprise tech debt. Organizations began to realize that tech debt can manifest in infrastructure, architectural choices, data management, and even the use of third-party software solutions.
Technical debt encompasses hidden IT costs, increased operational risks, compromised security, hindered innovation, and challenges in adapting to change. However, much like financial debt, tech debt can be the result of a conscious decision as well. Just as organizations can take on financial debt for strategic business reasons, they may also (mindfully) accept some levels of technical debt. The problem arises when it accumulates without making technological payments against that debt over time.
“As companies become more digital, they need to actively measure and manage their tech debt leverage in the same way that they pay attention to their financial debt leverage, and they need to ensure that they are making regular payments against that debt to keep from becoming too highly leveraged in their tech stack,” said Daniel Saroff, group vice president, Consulting and Research at IDC. “The concept of technical debt leverage is intended to help executives understand the impact of high enterprise tech debt to their operations and to help establish a common vernacular for addressing, measuring, and managing that tech debt so that the appropriate tech debt payments can be made over time.”
By proactively measuring and managing enterprise tech debt and establishing a common business language with which to contain that measurement, CIOs can elevate the discussion of tech debt within their organization. This approach allows tech debt to become a strategic lever that can help achieve business objectives, while enabling the executive team to consciously prioritize efforts to address tech debt interest.
To effectively measure tech debt leverage, organizations should evaluate each technology within the enterprise tech stack based on several operational and strategic factors. Key components include the supportability of the system, which is reflected in the time spent maintaining it, and the solution’s remaining life expectancy, which indicates how long the technology will remain viable and useful in the enterprise environment.
Once the tech stack is evaluated and scored, the results should show where an organization is highly leveraged, and which specific technological components need some attention to reduce that leverage. This creates a framework for managing tech debt that the board and executive team can use to understand its impact. It also offers a single ratio to measure, manage, and track tech debt across the organization over time.
Ready to turn your technical debt into a lever for success? Implementing the framework outlined in this IDC Guide will help tech leaders overcome technical debt leverage by establishing a common language for measuring and managing it. Download the IDC Guide, Enterprise Technical Debt: Liability or Lever?
To learn more about enterprise technical debt and the concept of tech debt leverage, visit the IDC blog, Nailing Jell-O to the Wall: Can You Really Measure and Manage Enterprise Tech Debt?
An IDC webinar, “Technical Debt: It’s Not a Curse Word, but a Strategic Asset,” will be held on September 18th at 12:00 pm U.S. Eastern time. Hosted by Daniel Saroff and IDC Adjunct Analyst Dr. Ken Knapton, author of Unveiling Tech Debt: A Business Leaders Guide to Measuring and Managing Enterprise Tech Debt Leverage, the webinar will provide actionable insights, strategies, and a methodology for turning tech debt into a strategic asset. Webinar details and registration can be found at IDC Webinars (zoom.us)
The IDC report, IDC PlanScape: Enterprise Tech Debt Leverage (Doc #US51849124), provides a detailed explanation of how to calculate enterprise tech debt leverage (ETDL) to establish a common language for discussing tech debt with the executive team and the board. Implementing the process outlined in the report frames the discussion in a way that executives and the board can easily connect with.
About IDC
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,300 analysts worldwide, IDC offers global, regional, and local expertise on technology, IT benchmarking and sourcing, and industry opportunities and trends in over 110 countries. IDC’s analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world’s leading tech media, data, and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights.
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