IDC Shows IT and Business Executives How to Understand and More Effectively Manage Enterprise Technical Debt
September 13 2024 - 9:00AM
Business Wire
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
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Michael Shirer 508-935-4200 press@idc.com