Technical Debt Is Destroying IT

Franchisee Columnist Todd Michaud has spent the last 16 years trying to fight IT issues, with the last six years focused on franchisee IT issues. He is currently responsible for IT at Focus Brands (Cinnabon, Carvel, Schlotzsky’s and Moe’s Southwestern Grill).

A disease in this country is slowly destroying businesses from the inside out. Often misdiagnosed, symptoms of this devastating virus can be found in 95 out of 100 companies. This disease is called "Technical Debt," and it's the primary cause of IT failures in the last two decades. Put simply, Technical Debt is any technology decision that has a long-term negative impact on the business.

Although it would seem obvious that companies would want to avoid accumulating Technical Debt, I would say that, in some businesses, as many as 8 out of 10 technology decisions carry some level of Technical Debt. As Technical Debt accumulates, the results can be devastating.

Technical Debt has been classified into three different strains:

  • Orange Virus: Implementing technology not in alignment with long-term goals
  • Green Virus: Over-purchasing technology
  • Red Virus: Under-purchasing Technology

The Technical Debt Orange Virus, or technology not in alignment with long-term goals, affects technology decisions that are made considering only (or mostly) the short-term advantages the approach will provide. These decisions are often made at a department or region level and may be considered "one-offs" from the overall enterprise architecture (should one exist). Often developed by internal staff (possibly not even from IT), these systems rarely come with a business case that would hold its own weight under close inspection.

Other symptoms that indicate your organization has been infected with the Technical Debt Orange Virus include:

  • Replacing an existing system with no significant, quantifiable benefits (common after a functional leadership change)
  • Lack of documentation or training available for the system (possibly an orphan of an employee who has left the company)
  • Duplicate data that already exists in other authoritative systems (often because "we don't trust the data in that 'other' system")
  • Lack of enterprise-class infrastructure (possibly installed on a workstation underneath someone's desk)
  • Lack of integration with other systems within the same functional area or within a business process (often requiring people to take reports from one system and manually enter them into another)
  • More than 60 percent of the IT staff's time is spent on maintaining the current systems

Organizations that have been infected with the Technical Debt Orange Virus will often find a person with the role of "Application Portfolio Manager." The Orange Virus can be caused by the irritation around the merger of two business units or companies.

Often, applications or systems left out of an overall integration plan--and left unattended--will manifest into the Technical Debt Orange Virus. Similar results have been known to happen upon executive leadership change, where one system is abandoned (but never really retired) while a new system is put in place.

By implementing technology that is not in alignment with the long-term goals and vision, the organization is assuming Technical Debt. In most cases, the cost of supporting these systems over time far outweighs the benefit from implementing the system in the first place.

The Technical Debt Green Virus, or over-purchasing technology, is often found in larger companies where several different business units utilize a shared IT staff. Some of the symptoms of the Green Virus include requirements that contain the words "we might," "someday" or "we hope."

Functionality Surplus (when the system does considerably more than the needs of the business unit) and Bloated Budgets are also symptoms.

Additional symptoms of the Technical Debt Green Virus include:

  • Annual maintenance costs for a single piece of software are higher than an IT administrator's yearly salary
  • The implementation of a single brand of software takes longer than 12 months
  • Lack of documented requirements forced the purchase of a system that could handle any need
  • A small number of business requirements that necessitated the leap from a midsize approach to an enterprise approach were never validated with the business for their criticality

Often, the Technical Debt Green Virus can be seen in organizations that buy enterprise-level software for medium sized business. (Does a 100-person single-building company even qualify for an "enterprise" resource planning system?") The purchase of this system is often made at the recommendation of an outside consulting company.The Technical Debt Red Virus, or under-purchasing technology, has been known to run rampant in franchise organizations. The Red Virus manifests itself through the notion that, once purchased, technology should last forever and be instantly and freely upgradeable. Organizations suffering from the Red Virus are constantly negotiating with their vendors on "sunset dates" for longer support of software or hardware.

Additional symptoms of the Technical Debt Red Virus include:

  • Your organization is forced to purchase replacement hardware on eBay because that is the only place it is available
  • Recent college graduates are unfamiliar with the technology
  • Conversations with vendors start with, "What does the cheapest thing do..."
  • Purchasing two systems to solve "some" of your requirements when for an additional 10 percent you can address "most" of your requirements

Organizations suffering from the Red Virus generally feel that technology provides no competitive advantage and is merely a cost center that drains profits. Most organizations suffering from this strain of Technical Debt will have "IT Cost Cutting" programs formally or informally in place.

Each strain of the Technical Debt virus feeds off each of the other strains. Organizations infected with the Green Virus (over-buying) can often overreact to the situation and find themselves knee-deep in a strain of the Red Virus (under-buying). Without clear alignment to long-term goals, the Orange Virus (non-strategically aligned purchases) can easily mutate to either Red or Green.

So what is a company to do? Is every firm doomed to suffer the fate of being eaten alive by Technical Debt? The key is not to try and remove Technical Debt but to effectively manage it. Very rarely does a technology package exactly meet the business' need. One version of Technical Debt must be assumed as a result. The key is to manage that debt and understand the long-term impact of acquiring it.

Here are some additional things you can do to manage your Technical Debt:

  • Create a long-term IT strategy and vision. Align every project with that strategy. If a project does not align with the strategy, dump it.
  • Project the five-year maintenance cost of any technology approach. Do not allow these costs to be "just part of what Fred does every day." Fred might take another job tomorrow; then what will you do?
  • Define your requirements to a detailed level before you make your purchasing decision. Don't base your requirements on the first proposal you get. Know what you want/need ahead of time.
  • Challenge your business partners on the criticality of each requirement. If one requirement can be dropped and, in turn, save 25 percent of the long-term costs, is it worth it? (If done regularly, this one tip alone could probably reduce IT budgets by as much as 15 percent).
  • Knowing it's cheaper to have a human do something doesn't make it a better option. Understand the cost of data integrity issues and the timeliness of data.
  • Ask the question: How many other systems or departments will need the data that is captured or created by this system? If the answer is greater than zero, then understand the costs to extend that data before you implement (because trust me, someone will want it).
  • A saying in restaurant IT states that if a new system can't add at least one percent to the bottom line, quit wasting time on it. Plenty of others can. Just because it's a good idea, doesn't mean you should do it.

In general, businesses should make sure they understand the Technical Debt impact of each and every technology decision they make. Technical Debt is completely justifiable in many instances. Just make sure that it is carried throughout the life of the system.

What are your thoughts? I'd love to gain some additional perspectives. Leave a comment, or E-mail me at [email protected]. You can also follow me on Twitter: @todd_michaud. And don't forget to follow my Ironman training progress at