NPI Technology Management Blog

Pay now or pay later: the case for avoiding technology debt

- February 4, 2019

It’s agreed, finance, IT and procurement, all say so: 50% of their high value assets need IT modernization. Their organization has fallen behind the tech curve and it will take billions of dollars to bring it up to date. What kind of business would let themselves get so woefully out of step with technology? Sadly, it is the US government. Speaking about aging tech in the military, Air Force General Paul Selva said, “…we have squeezed about all the life we can out of the systems we currently possess.”

Many SMBs also find themselves in a similar situation, albeit not billions of dollars behind. Hardware, software and systems can be so far out of date that they lack effectiveness and have become a security liability. At this point, the financial and human costs of replacing and updating technology are substantial, just as the government has learned.

No business starts out with a plan to not replace key assets. The decision to put off technology investments happens gradually over time. The roadblocks to modernizing include:

“It works well enough.” If equipment life can be extended with multiple workarounds–even if they cost value staff time—it’s a better choice than replacement. In this case good enough often seems, well, good enough.

“We don’t need fancy technology to run this business.” Sure, a company could still be run using pens, paper and calculators. But for any business to be competitive it needs speed, accuracy, efficiency and the ability to slice and dice data to make informed decisions. Without the technology able to provide these benefits, the competition will always be more innovative.

“It’s too expensive.” There’s no easy way to say this: well-functioning technology that contributes to company success costs money to buy and money to manage. Decisions to upgrade, replace, and migrate to the Cloud must be carefully considered and budgeted. Similarly, putting money into these investments and then not budgeting to monitor and manage them properly only solves half of the problem.

“This is too big a problem for us to solve” Instead of thinking of improved technology as a roadblock, plan ahead by creating a roadmap that allows for improvements in a systematic fashion. For example, plan to migrate to the Cloud before a server needs replacement to avoid having to quickly buy a new one due to failure. Or, stick to a timetable to upgrade software after deciding how many versions can be skipped without a loss of productivity or security.

Staying current with technology needs to be a planned process similar to tax or inventory activities. Postponing innovation year after year is a guarantee that some critical systems will become barely functional.