Nearly half (46%) of executives across the globe say that technical debt, or tech debt, is the silent saboteur inhibiting their ability to innovate and grow, according to DXC Technology.
Tech debt is the implied cost of rework caused by choosing an “inferior but quick” solution over the “right” technology solution. In other words, while a past investment may have worked in the moment, it could fail to hold up well over time.
Also, tech debt tends to be a series of trade-offs that lead to suboptimisation and becomes increasingly hard to undo.
While different from obsolescence or depreciation it can be measured in billions for most large enterprises and have far reaching implications costing a business its talent, lower productivity, increase its security risk and ultimately be disruptive to an organisation’s success and stock price.
In 2023, DXC Leading Edge conducted a survey of 750 global IT executives, half comprising a senior group of CIO or CTO respondents and the rest are VP level or above leaders.
According to the report, there is an accountability crisis when it comes to tech debt.
Of the executives interviewed, 99% recognised that tech debt was a risk to their organisations, even if three in four still believe that IT leadership should shoulder sole responsibility for fixing it.
“If business leaders don’t commit to addressing tech debt now, it will lead to loss of resources, productivity, talent, and have huge security implications,” said Michael Corcoran, global lead of analytics and engineering at DXC.
Lack of awareness among business leaders also has a significant impact on their ability to manage technical debt.
Executives were clear that there are barriers to progress which hinder modernisation efforts in their organisations — 47% of respondents scored knowledge barriers as very or extremely significant, and 38% did so for cultural barriers.
Further, DXC found that organisations can experience 39% in cost savings from technical debt reduction, while being able to retire 37% of redundant applications.
“As technical debt continues to accumulate, organisations around the world cite it as a top challenge, inhibiting their ability to transform and serve their customers into the future,” said Dave Reid, research director of DXC Leading Edge.