Technology debt is, to a business what any out-of-control financial debt is to any of us – overtime it is debilitating, suffocating and it becomes one of the determining factors in the speed at which a business can grow and develop. No one starts off with this ultimate position as being the strategy, but it is easy also to ignore the signs when heading towards the debt trap. Once in the trap, getting out of it takes time and is much more expensive than anyone first considered it would be.
In business we dress the signs up as ‘asset sweating’ or ‘ROI extension’ and for the most part it happens when there is a long-term freeze on Capital Expenditure. That’s not to say that Capex Freeze is not a legitimate strategy. Most debt, technology or otherwise is forced upon us by circumstances and freezing Capex is always the first reaction. Following the financial crash in 2008 many businesses accumulated technology debt and like the era of austerity it lasted a decade. Right now, because of Covid we could expect to see the previous decade being repeated. But if we have learnt anything in the past 10 years, it’s got to be that any debt costs money and if it’s out of control it can take a long time to recover from its consequences. Capex freeze is a blunt instrument for solving a business problem – short term effective but long-term drives business right into the technology debt trap.
Classic characteristics of the debt trap is IT infrastructure decay – unsupported OS versions, out of date applications, hardware out of support, firmware update ‘lag’, incompatibility with the latest vendor/ISV productivity tools. The consequences are – no upgrade path, unable to move apps onto the latest platform, data at risk, noncompliance with regulatory bodies. These are signs that must be heeded to avoid the trap. For business it can mean slow development, lost competitive advantage and ultimately market share. In all the acquisitions I have been involved, we never took a business over that had a better IT infrastructure than our own.
Since the Financial crash there has been an escape route and in the past 10 years those businesses wanting to avoid the trap have changed the way in which they have consumed IT. If it wasn’t obvious before it has become so, that IT itself is not important – it’s the business outcome and the result which is the paramount concern of business owners and management. So why allow IT and technology debt determine whether a business can compete with its peers or achieve its aspirations? Post Covid to avoid the trap there must be another way.
Another characteristic of a business in debt is the need to transform IT. If there’s a transformation plan for IT, it means there’s been a wakeup call – someone has bravely raised their hand and said, “we are in trouble, we have a problem”. It’s the first step to get out of debt but it’s painful. Transformation by its nature is an abrasive process, it has negative connotations – it means change that will be painful and itself, costly. What if you could avoid ever having to do another Transformation – becoming free of ever falling into the debt trap.
Meridian can help an organisation avoid Technology Debt. We enable customers to continue to develop competitive advantage, deliver growth and reduce costs, even in a tough economic environment as the one we face right now. Our partners such as Red Hat, Arcad and IBM deliver the latest technology and utilities which will prevent a customer adopting those characteristics that cling to a business which has fallen into the debt trap.
We help customers avoid the need for transformation – the route to get out of technology debt and take advantage of innovation – the path to keep you debt free in the future. If you have any questions, the experts at Meridian are here to help. For more information contact our experts by phone at +01564 330650 or send an email to firstname.lastname@example.org for more details.