Reducing Technical Debt with Cloud SaaS Solutions: Don’t Fall Prey to the Bad Debt Syndrome
Every company with a digital presence has some amount of technical debt that acts as a hindrance to their progress. The scope of this debt, however, is anyone’s guess.
“Technical debt is like dark matter: you know it exists, you can infer its impact, but you can’t see or measure it,”. This is what appears in a study by McKinsey’s Björn Münstermann and Sven Blumberg. The study involved 220 CIOs, 30 percent of who believed that 20 percent of their technology budget is spent on technical debt-related issues. They also reported that this debt amounted to 20–40 percent of the value of their technology estate.
The study hints at technical debt being like a self-consuming serpent. The higher the technical debt, the higher the number of failed IT efforts, which, in turn, results in even larger debt. In fact, the study states that high-debt companies are 40 percent more likely to have canceled or incomplete IT initiatives than those with low-tech debt. So it’s safe to say that as far as tech debt is concerned, the writing is on the wall.
Before we get too ahead of ourselves, let's first clearly define what technical debt is.
The Hot Mess that is Technical Debt
Software developer Ward Cunningham was the first person to use the phrase “technical debt” in the Agile Manifesto that was released in February, 2001. He didn’t realize then; the phrase he had created would be one of the most relevant buzzwords in digital commerce over two decades later.
Technical debt (also known as code debt or tech debt) is the result of development teams making brash decisions and taking actions to expedite the delivery of a project or functionality leading to faulty or imperfect code that needs to be revisited time and time again. This could include anything from legacy code and bugs to missing documentation.
Technical debt is not very different from a bad loan, believes Ward Cunningham. “With borrowed money, you can do something sooner than you might otherwise, but then until you pay back that money you’ll be paying interest. I thought borrowing money was a good idea, I thought that rushing software out the door to get some experience with it was a good idea, but that of course, you would eventually go back and as you learned things about that software you would repay that loan by refactoring the program to reflect your experience as you acquired it.” he reflects.
The impact of technical debt can be seen to have a direct, and sometimes irreversible effect on business performance. These impacts can be broken down into two major areas:
- Financial Impact
Technical debt can bring an organization’s financial progress to a grinding halt.
According to a study by CAST Research Labs, there exists roughly USD 3.61 of technical debt in every line of code. This amounts to over USD 1 million per system.
In fact, this led Gartner to conclude that the global IT debt had already crossed USD 1 trillion as far back as 2015, and large public sector agencies have an average tech debt of over USD 200 million. And the accumulation of this debt ultimately equates to building financial liabilities.
2. Business Impact
As discovered by many organizations, technical debt can also thwart an organization's ability to innovate and provide customers with better products and services. A few other examples of the impact of technical debt on business performance include:
- Reduced ability to leverage data as information to make better business decisions and enhance operations and services
- Service loss due to untimely outages
- Decreased ability to adapt to market trends and opportunities
- Decreased productivity caused by resources being occupied with operations and maintenance, rather than innovation and development
Nipping Tech Debt in the Bud with Cloud-Native Software Solutions
One of the main reasons that businesses fall prey to technical debt is because they think they have no option but to carry out development in-house. The heavy cost of technical infrastructure, manpower and development time, all put together set the precedent for technical debt. Couple this with a need for truncated timelines, and you have the perfect recipe for tech debt.
The reason for this could simply be that these organizations don’t know about cloud-native software as a service (SaaS) solutions, or don’t trust them enough. From the get-go, cloud software solutions help businesses get rid of the needless infrastructure costs and debt that come from maintaining, fixing, and upgrading physical data infrastructure. Cloud solutions help organizations reduce capital costs with pay-as-you-go options for ready-made solutions. Sure, these solutions may not come ready for organizational needs, but the time and cost involved in aligning these solutions to business needs is far less than building technical solutions from the ground up.
Here are some of the top benefits of cloud-native software from the tech debt PoV:
- Increase in project/product speed and agility
- Reduction in capital spending with pay-as-you-go options
- Frequent updates and upgrades enable businesses to easily adapt to trends, challenges and opportunities
- Drastic reduction in costs poured out towards owning, running and maintaining IT infrastructure and data centers
Understanding the Scope of Cloud Capabilities
While there is a lot of talk about cloud SaaS; most of it as a buzzword; not all software solutions are true to the idea. For a cloud-native SaaS to be truly effective, it must adhere to the below construct:
- The software should be made available to customers on a subscriber model
- The SaaS provider should host, operate, manage and upgrade the software, ensuring it is aligned with business requirements
- They must provide security for the software and all residing data
- The software architecture should be multi-tenant, with consolidated data structures and code bases
- The cloud SaaS should feature regular new releases that are opt-in and rich in functionality
That said, you must keep in mind that simply opting for a cloud SaaS doesn’t provide complete assurance against technical debt. Badly written software can still cause all the problems one would face with a legacy approach, leaving many more pieces to clean up in terms of technical debt. Starting with the right cloud solution is integral to ensuring minimum or no technical debt in the long run.
On the other hand, if you already have the burden of technical debt, you must take a few steps before considering a cloud SaaS. The first step would be to measure and understand the cost and scope of the existing technical debt, and forecast the possible implications of the existing debt. Once this is done, it becomes easier to design a remediation program driven by cloud-native SaaS.
Have more questions about cloud-native SaaS and how it can be used to drive out technical debt from your business? Speak to one of our experts at Amaze PXM.