8 ways to mitigate tech debt
How companies can use ongoing performance improvement to mitigate their technology burden and improve productivity
CEOs discussing information technology (IT) are used to hearing familiar complaints in their organizations. “I don’t know why this solution is so difficult,” or “this technology is very slow.” Some describe the accumulation of various forms of IT as “a highly entangled ball of yarn.”
The complaints suggest a sense of powerlessness over how to manage technology sprawl. But they also indicate a lack of awareness of tools and processes that can help relieve organizations of such technology burdens. Accumulated technology can slow growth in the same manner aging technology can slow efficiencies and depress productivity.
Managing technical debt or “tech debt” – the cost that accrues from quick IT fixes that eventually require more expensive, comprehensible solutions – is a multimillion-dollar corporate undertaking. Tech debt often results from mergers and acquisitions due to multiple inherited technology platforms and the failure to achieve expected synergies, impeding value creation and growth.
Tech debt questions
Here are the key questions you need to ask yourself about tech debt.
- How do you know if you have a tech debt issue?
- How do you measure technology costs today to quantify the debt?
- What’s your history of acquisition either through M&A or vendor sun setting?
- What is your history of acquiring technology, and is it still needed?
One example is the automotive industry. Connected vehicles have become the industry standard due to the comfort and safety they provide car owners, such as GPS and multiple sensors that detect engine malfunctions. But a connected vehicle requires hundreds of software components to manufacture and keep it running. As a result, many automotive suppliers have become software companies that invest heavily in research and development and accumulate huge amounts of tech debt. They struggle with balancing demand for an increasingly complex product while managing a heavy tech debt load.
How continuous performance improvement can help
Continuous performance improvement (CPI) is about increasing productivity and efficiency in existing, sometimes already great processes—doing things faster, better, and with less labor where possible.
CPI can involve anything from automating a repetitive process step to redesigning workflows to rewriting job descriptions. Your plan should have a clear and specific goal—reducing processing time by a specific percentage or eliminating unplanned overtime expense.
Measuring and monitoring help an organization determine the cost of operations as well as the impact on growth and the balance sheet. As a result, organizations may also be able to calculate the impact of accumulating additional tech debt through a merger or acquisition on the enterprise architecture.
Ways to mitigate tech debt
You can build CPI into your tech strategy to help alleviate tech debt. Following are 8 ways to improve the value of your technology:
1
Process standardization
Companies that document and standardize processes can reduce the risk of errors and improve accuracy.
2
Automation
Companies that centralize automation technology can help share solutions across teams, reducing manual work and the potential for tech debt accumulation.
3
Continuous monitoring
Companies that implement real-time KPI and performance tracking help identify areas that require immediate attention.
4
Align teams
Sustainable improvement occurs by assessing and improving governance processes and ensuring the workforce is aligned with a continuous improvement culture.
5
Optimize technology
To optimize existing technology investments, companies should streamline technology investments and incorporate advanced technologies like GenAI.
6
Reduce errors
Companies that focus on error reduction in processes can benefit from more efficient operations.
7
Manage workloads
To avoid overburdening teams, leading to rushed work and increased tech debt, companies must focus on effectively managing workloads.
8
Hire strategically
New talent with fresh perspectives can help focus on reducing existing tech debt and prevent future accumulation.
KPMG offers frameworks to analyze your tech debt challenge with an eye on continuous performance improvement instead of reacting to the latest problems. We can help you learn to continually assess and make continual changes, not one at a time.
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