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Technical debt – the silent killer of enterprise modernization – affects 58% of organizations and poses a significant risk to the success of their digital transformation efforts, according to Deloitte research. Orbus Software CEO Gareth Burton and Tim Smith, US leader for Monitor Deloitte’s Technology Strategy & Business Transformation Practice, recently discussed how businesses can identify, manage, and overcome technical debt to unlock the full potential of digital transformation.
What is technical debt, and why does it matter?
Technical debt encompasses the compromises that organizations make in their IT systems, from skipping updates to taking shortcuts in development. While these actions might expedite short-term goals, they can lead to long-term challenges, including:
- Increased maintenance costs
- System outages and security vulnerabilities
- Operational inefficiencies
Gareth highlighted the scale of the problem: $1.5 trillion worth of tech debt needs to be fixed globally, with potential additional costs of $2.4 trillion due to operational failures. And Tim likened technical debt to financial debt: "It’s the interest you have to pay—not just in money, but in slowed agility and operational strain."
Barriers to digital transformation: Why technical debt tops the list
Digital transformation is not a one-time project; it’s an ongoing process. Tim highlighted how priorities are shifting: in 2023, 44% of organizations reported pursuing radical digital transformation, but by 2024, that number had fallen to 18%. He believes that this shift reflects a growing understanding that transformation is not about chasing ambitious, one-off goals but about making continuous, strategic progress.
However, this ongoing journey is often hindered by technical debt, which Deloitte has identified as one of the top five barriers to transformation. Alongside funding shortages, lack of strategy, security concerns, and misaligned incentives, technical debt is particularly challenging because it compounds over time. Gareth explained that even the most well-crafted transformation strategies can falter if technical debt remains unaddressed: "You can only move as fast as your slowest application."
To truly modernize, organizations must tackle transformation and technical debt together, treating both as interconnected, iterative challenges. Both speakers shared actionable strategies for tackling technical debt effectively. Watch the on-demand session recording for further insights.
The role of enterprise architecture in combating technical debt
Enterprise architecture plays a vital role in minimizing technical debt. Both speakers highlighted a correlation between enterprise architecture and technical debt, notably that the more mature the enterprise architecture function, the less technical debt is likely to accumulate. That is because, as Gareth noted, enterprise architecture teams provide the "guide rails" for managing standards and preventing the chaos of siloed, inconsistent development practices that cause technical debt to spiral.
Conclusion: Hope is not a strategy
To address technical debt, organizations must take proactive steps, leveraging the right tools and frameworks to quantify and remediate their debt effectively. As Gareth succinctly put it: "Hope is not a strategy." By embracing visibility, structured lifecycle management, and collaborative approaches, businesses can transform technical debt from an obstacle into an opportunity.
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