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For too many small businesses, key technology decisions are often made without the proper consideration of long-term impact. These important decisions have a cost that doesn’t readily show up on the balance sheet, but they will negatively affect your business in significant ways.
In this article, we will look at what technical debt is, the ways it hurts your company, and how you can reduce and overcome it.
Technical Debt Examples
Technical debt is the accumulated cost of choosing speed or convenience over strategic technology decisions that would better serve your organization in the long run.
Some common examples of company behavior that cause technical debt include:
- Applying fast, temporary fixes instead of resolving root-cause problems
- Using outdated or unsupported software
- Not refreshing hardware consistently
- Weak documentation practices and poor system configurations
- Customizations that aren’t followed through on
Similar to financial debt, technical debt will accrue costly interest. In general, the longer the causes of technical debt go unaddressed, the greater the negative impact will be. The cost to fix the problems caused by technical debt will also be higher the longer you wait.
Major Costs of Technical Debt
Decreased productivity
Technical debt can result in thousands of lost work hours for your company each year. Because of your company’s inattention to technology issues, employees will have to deal with slow computers, outdated and unreliable applications, and unsecure networks. Without sufficient automation, employees will also spend too much time completing tasks manually.
When employees have to restart computers frequently during the day and spend valuable time completing menial tasks, frustration will become rampant. Your team will spend too much of their day handling technology issues instead of serving customers or improving your business. The inconvenience caused by technical debt will result in poor morale, employee attrition, and decreased productivity.
Increased downtime
Technical debt increases the likelihood of system outages and failures. A company with outdated hardware and software will face problems more often and with greater impact. Companies with technical debt are forced to rely on reactive IT support and will experience more complex troubleshooting, higher emergency repair costs, and longer downtime.
Greater cybersecurity risk
A particularly concerning aspect of technical debt is how it dramatically increases your cybersecurity risk.
Technical debt can result in software without necessary patches and updates, weak access controls, poorly managed operating systems, and a lack of visibility into your network environment.
These critical problems make it easier for cybercriminals to exploit vulnerabilities and breach or compromise your company’s network.
Compliance and cyber insurance issues
For the growing number of small businesses subject to strict compliance requirements—such as CMMC, HIPAA, and PCI DSS—technical debt can hinder the ability to achieve necessary certifications.
Companies with legacy or outdated systems will often not satisfy requirements in the areas of access control, encryption, documentation, and system monitoring.
Businesses that fail to provide proof of modern security controls will fall short in their compliance efforts and will also have difficulty securing adequate cyber insurance at a reasonable price.
Restricted business growth
Legacy or outdated systems stifle growth because they are limited in scalability, integration, and adaptability. Technical debt makes your business less able to support modern applications, take advantage of cloud services, or enjoy the benefits of automation.
Your small business will have trouble growing when it can’t employ the latest business tools, add new employees quickly, easily support remote work, or rapidly respond to any changes in your industry.
Higher IT costs in the long term
Small business leaders often justify their short-term cost-cutting that leads to technical debt because of the need to keep IT costs low. However, these actions will almost always cost more in the long run because of the resulting emergency repair fees and upgrades, increased maintenance costs, and compatibility issues with newer tools that cause longer downtime.
Your company may delay spending, but it will ultimately be more expensive when outdated systems fail without warning and must be replaced. In short, technical debt often results in large, unexpected IT expenses in contrast to the benefits of a planned, longer-term investment.
Technical Debt is not only an IT Problem
Some business managers may dismiss technical debt as a concern for their IT Department to worry about, but its negative consequences impact every aspect of your organization.
Technical debt causes systems to be unreliable, which results in customers suffering from delays and poor service, and employees experiencing less confidence in company processes. In addition, weak IT forces company leaders to make decisions without accurate data.
Technical debt impacts a company’s competitiveness, reputation, and bottom line. As a result, small business leaders need to understand the sweeping impact of poor technology and work to handle IT as a strategic, long-term investment.
Key Steps to Reduce Technical Debt
IT experts recommend a gradual, proactive approach to reducing technical debt.
Important steps include:
- Conducting regular assessments to identify IT weaknesses and risks
- Prioritizing and scheduling IT upgrades based on business impact
- Making cybersecurity a priority
- Standardizing systems and configurations
- Automating menial tasks
- Improving documentation procedures and system visibility
Work with an Experienced IT Partner to Overcome Technical Debt
Small businesses must resist the temptation to solve IT problems quickly and cheaply by reacting rather than investing and planning. A trusted IT Support partner, like Network Depot, can help you recognize and meet the challenges in establishing a solid IT foundation.
Your reliable IT partner will work closely with your company to treat IT as a strategic investment with a gradual approach that will respect your budget and still be effective. With your understanding of the impact of technical debt and the assistance of your IT partner to overcome it, your small business will be more secure, productive, and well-prepared to meet your unique objectives.
