The topic of technical debt and the challenges that are arising with it is surfacing among new executives in role.
So what is technical debt? And how do we address it?
Understanding Technical Debt and Its Rising Expense
Technical debt refers to the hidden costs businesses incur when software or systems are developed quickly, prioritising short-term delivery over long-term maintainability. Quick fixes often lead to scalability and maintenance issues, resulting in long-term financial burdens.
Recent research has found that the consequences of technical debt can surpass even cybersecurity costs.
Comparing Technical Debt and Cybersecurity Costs
For years, organisations have focused on cybersecurity to protect against breaches. However, the financial strain of technical debt is becoming a bigger issue.
1. Technical Debt Benchmarks: Gartner estimates the global cost of technical debt was at $1 trillion in 2021, rising to $1.5 trillion by 2025. McKinsey suggests technical debt consumes 20-40% of an organisation's technology estate, while Forrester estimates that 30% of IT budgets are spent on managing it. CIO Magazine reports that some companies spend up to 60% of their IT budgets on maintaining outdated systems. These numbers highlight how technical debt outpaces cybersecurity costs.
2. Cybersecurity Costs: In comparison, global cybersecurity spending is expected to reach $266 billion by 2027. Although significant, this is dwarfed by the growing burden of technical debt.
Addressing and Mitigating Technical Debt
Technical debt silently accumulates over time, making systems harder to maintain and leading to frequent failures and delays in product launches.
To mitigate technical debt, organisations should conduct regular code reviews, refactor outdated systems, and focus on scalable solutions. Agile methodologies help manage projects in small, manageable components. Allocating budgets specifically for tech debt reduction ensures ongoing maintenance and prevents future rework.
Addressing technical debt proactively can save organisations from costly repairs, help maintain agility, and prevent long-term operational issues. The investment can mitigate vulnerability risks, improving cybersecurity.
Want to chat more about technical debt and the impact it could have upon your organisation? Feel free to contact me here.
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