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Is technical debt costing your firm?

Cedric Christie

If you’re going to be agile enough to compete with digital natives, you must get out of technical debt, write Adam Burden, Edwin van Ouderaa, Ramnath Venkataraman, Tomas Nyström and Prashant P Shukla for MIT Sloan Management Review.

You’re under constant pressure to keep up with the relentless pace of IT, but you can’t bring yourself to fork out for a long-term solution, so you opt for a never-ending series of short-term fixes. It’s understandable. It’s human. But all you’re doing is building up what the authors label “technical debt”.


This debt will ultimately create an “untenable IT environment”, preventing your company from competing with newer, more tech-savvy competitors. A recent Accenture survey of more than 1,000 executives showed that 70% believed technical debt limited their company’s ability to innovate.

Like 91% of executives, you might be aware of the issue of technical debt and attempting to tackle it, but know there are no easy solutions. According to a survey of executives conducted by the authors, 67% want to replace core legacy systems, and 70% would like to keep them as long as possible.

Fortunately, there is a solution: “digital decoupling”, a process of decoupling the critical parts of the old systems and making them work harder for you by building new digital systems on top of them.


Follow these four steps:

1) Decouple data from legacy systems. Move data from legacy systems to a “data lake”, a centralised data storage system. Wall Street investment bank Goldman Sachsdesigned Marquee, a platform that uses machine-learning algorithms to derive insights from its data lake.

2) Decouple applications from the legacy infrastructure. It takes a lot of computing power to run bundled applications on your legacy infrastructure. Why turn on all the lights in your house when the whole family is sitting in the living room?

3) Decouple business process systems from one another. It no longer makes sense to run all your software on one machine. Separate software required for different departments, e.g. R&D, sales and supply chain.

4) Decouple IT talent and budgets from traditional silos. Build “cross-functional” teams that incorporate both IT and non-IT talent. Collaboration is key to innovation.


The process of combating technical debt doesn’t end with digital decoupling. “Continuous investment is the name of the game because it allows you to clean up the IT systems required for you to innovate,” conclude Burden, van Ouderaa, Venkataraman, Nyström and Shukla.

Source Article: Technical Debt Might Be Hindering Your Digital Transformation
Author(s): Adam Burden, Edwin van Ouderaa, Ramnath Venkataraman, Tomas Nyström and Prashant P Shukla