Aware of what tech debt costs them, CIOs still can’t make it an IT priority

It’s among CIOs’ most persistent and underdiscussed challenges: embracing innovative technologies without losing sight of mounting — and potentially crippling — technical debt.

Tech debt can take many forms — old applications, bloated code, and aging hardware among them — and while the issue often takes a back seat to innovation and new technology, it is on the minds of a lot of CIOs.

Nearly four in 10 CIOs surveyed recently in a recent CIO Sentiment Survey by IDC said they expect to overspend on digital infrastructure over the next 18 months. And 47% percent of those who expect to overspend blamed excessive tech debt, including old apps.

Despite this recognition, CIOs ranked AI and cybersecurity far ahead of eliminating tech debt on their lists of priorities, according to the survey.

Tech debt is boring

Company boards and CEOs are putting pressure on CIOs to find innovative uses for AI, and the need for better cybersecurity never goes way. Therefore, always-lurking tech debt gets put on the backburner, says Daniel Saroff, group vice president for consulting and research at IDC.

“It’s not a sexy subject,” he says. “It’s not a subject the board are pounding their fists over.”

The trick for CIOs who have significant tech debt is to sell it to organization leadership, he says. One way to frame the need to address tech debt is to tie it to IT modernization.

“You can’t modernize without addressing tech debt,” Saroff says. “Talk about digital transformation.”

For example, some organizational leaders may balk at replacing an old ERP system because they see it as a back-office function, Saroff says.

“You don’t just say, ‘We’ve got an old ERP system that is out of vendor support,’ because they’ll argue, ‘It still works; it’s worked fine for years,’” he says. “Instead, you have to say, ‘We need a new ERP system because you have this new customer intimacy program, and we’ll either have to spend millions of dollars doing weird integrations between multiple databases, or we could upgrade the ERP.’”

Tie tech debt to other projects

An IT modernization and digital transformation angle for replacing old software and hardware can be a compelling argument, says Tim Beerman, CTO at IT services firm Ensono. Tackling tech debt on its own may not win CIOs a lot of supporters from higher-level management.

“A lot of it gets into even modernization as you’re building new applications and new software,” he says. “Oftentimes, if you’re interfacing with older platforms that have sources of data that aren’t modernized, it can make those projects delayed or more complicated.”

As organizational leaders push CIOs to launch AI projects, an overlooked area of tech debt is data management, adds Ricardo Madan, senior vice president for global technology services at IT consulting firm TEKsystems.

With business data in silos or hidden in dark corners of an organization’s IT systems, modern AI tools won’t have the information they need to return good results, he notes. CIOs at organizations launching AI projects should deal with their data debt before moving forward, he advises.

“It’s like a truth serum,” he says. “AI will let you know what that data state is.”

CIOs can also tie tech debt to other prioritized projects, such as cybersecurity improvements, Beerman recommends.

Old hardware and software can be vulnerable to attacks, and CIOs can work with CISOs to target systems that need to be replaced, Beerman says. Old hardware and software can also be expensive to maintain, and many organizations continue to run hardware and applications no longer supported by the vendor.

“In today’s market age where cybersecurity attacks are on the rise, hardware and software that’s not supported obviously leads to vulnerabilities that maybe can’t be patched,” he says.

Not all tech debt is bad

While old hardware, software, and code can create several problems for CIOs, both Beerman and Saroff advise CIOs to create a long-term plan to retire tech debt by focusing on critical needs. CIOs should take a balanced approach; in some cases, old systems can still run well and may not need to be replaced.

A certain level of tech debt isn’t necessarily bad, Saroff says, just as some financial debt can be useful to organizations.

“It’s when it starts to impact the function of the organization that financial debt is bad, and similarly with tech — when it inhibits your agility, increases your risk, or drains your resources, that’s when tech debt is bad.”

Some organizations may also have the veteran IT workers needed to deal with legacy hardware and code, adds Madan. Some legacy hardware and code tend to hang on forever, and organizations may keep old systems in place to retain those IT workers.

“Some technical debt is good to maintain because it is doing a more humane good for the sake of the employee or downstream potential,” he adds.

CIOs need to balance their priorities between new initiatives that create new revenue and the need to replace old systems, Beerman says. Old hardware that’s still running well may cost more to replace than the savings the replacement generates.

“As we sit down with clients and help them balance priorities, it is really looking at the more strategic picture,” he says. “If you have a good understanding of your business-critical applications, where do you get the biggest bang for the buck?”

Make a plan

Part of a long-term plan to address tech debt is showing company leadership the return on investment. For big projects, ROI is incremental, Beerman notes, with little savings building up over a series of months or quarters.

CIOs should create a “board-ready business plan” that shows both near-term and long-term ROI, he says.

“Something very complex, like mainframe modernization, is typically a multiyear effort,” he says. “What’s my near-term ROI, what’s my long-term cost savings, like increased efficiency, and where is there new revenue?”

These plans to retire tech debt also need to be flexible, especially when the plans stretch out over several years, Beerman says.

“These things aren’t flipping a switch,” he says. “You need to have an architecture, design, and plan that allows you to course correct along the way. As you learn new things, new technology is always popping up during the longer-term projects, and you have the ability to make a pivot if that’s the right thing to do.”

Madan suggests CIOs start small when tackling tech debt. The first step is to take an inventory of the organization’s IT assets and look for outdated or redundant IT systems, he suggests. For example, he sees many organizations that are running multiple container platforms or development tools, instead of settling on one.

“When people talk about debt and how a disproportionate amount of capital or OpEx is going to supporting old, high-cost, high-overhead systems and processes, we just want to see what we’re dealing with,” he says. “We just try to take an inventory and look for the redundancies and get those smart CIOs to really ask the right questions: ‘What’s not working well, where is most of your monthly budget going, and what’s the return that you’re getting?’”