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