The pandemic has accelerated many large-scale digital transformations and driven growth in many technology companies. whether Instacart sales increase 230% in 2020 compared to 2019, or Zoom revenue increased 169% During the early days of the pandemic, many companies had to accelerate their digital transformations over the past 18 months.
This growth came at a cost, especially for Zoom. It was unexpected and attracted a lot of attention to the company, which led to many cyber attacks, including “Zoombombings—People snooping on Zoom meetings and flashing porn or other inappropriate messages.
Another cost is technical debt to support the growth of digital applications. Total cost of ownership (TCO) is the cost of developing the application plus ongoing costs of maintenance, updates, and support. When you incur technical debt in an order, that debt must be repaid at some point. Technical debt is paid off either once and for all by repairing or upgrading the application to remove technical debt, or it is paid off over time by increased maintenance, support, and opportunity costs.
Technical debt makes it difficult for leaders to innovate and create new and improved customer experiences from their technology. This pent-up innovation means lower long-term revenue.
What is artistic debt?
Technical debt is an increase in pending work required as a result of choosing an easier solution in the short term rather than a better solution that may be more difficult or more expensive to implement in the long term.
We are often faced with two choices to accomplish a task: to do the task completely or to do it in a limited way that meets a short-term need but requires rework at a later time. When we choose the latter, we increase the technical debt, because the required rework later adds to our backlog.
We can easily visualize the technical debt. Take a look at Figure 1, which is a perfect view of a fully executed project.
This represents an entire task of debt reduction rather than a short-term fix. On the left we see the status of the project before it started. Here, there is a planned project (the blue “project” fund) and the accumulation of existing technical debts. Having fully and completely implemented the project, we ended up on the right side, where the backlog was reduced. The backlog is smaller because the project was completed and some technical debts were settled during project implementation. The net result – total technical debt – is now lower than it was before.
But when we don’t invest in an entire project—when we take shortcuts to save time or energy—we end up with a project that looks more like Figure 2. This diagram shows what often happens when projects get done quickly, leaving additional technical debts on the table.
Here we start with the same project in the blue box and the same accumulation of existing technical debt, just as in the first example. However, this time we are implementing a faster, easier and simpler project that does only the minimum work needed to achieve our short-term goals, leaving a lot of work unfinished. The net result, shown on the right, is a smaller completed project, and a larger accumulation of technical debt.
Technical debt is not just required code changes and rebuilds. It can also mean infrastructure re-engineering, such as moving to a cloud-native architecture or moving an application to a container-based infrastructure.
Technical debt can also include the negative impact of the operations involved in people and equipment. This includes processes and systems related to customer support, manufacturing, order fulfillment, and shipping. Shortcuts in these processes can have the same costs as traditional code-based technical debt.
Technical debt cost
Increasing technical debt affects the company in many ways. for example:
- Technical debt can reduce your ability to innovate and implement new ideas. It’s hard to try something new when you invest in fixing something old.
- Technical debt can make it difficult to respond to threats from competitors. Your technical debt limits your ability to adapt and transform quickly to compete.
- Technical debt can make hiring projects more difficult. It can be hard to find developers willing to work with legacy technologies when they can work with your competitors’ latest technology.
Legacy processes and systems can increase total cost of ownership as well as implementation and manufacturing costs, resulting in lower profits. Old technology can also increase employee frustration and eventually lead to staff shortages. It can increase investor and shareholder dissatisfaction. Worst of all, it can lead to customer dissatisfaction, which reduces customer retention.
Common causes of technical debt
Many things can cause technical debt to increase, but some common causes include:
- Financial and employment constraints that prevent or limit an organization’s ability to make good technical decisions. When financial costs drive technical decisions, the result is often an increase in technical debt.
- It takes unreasonable time that requires projects to take shortcuts. Tight schedules lead to taking shortcuts, resulting in technical debt.
- Changing product requirements and changing environmental requirements. Projects can change requirements mid-way, often resulting in substandard designs and increased technical debt.
- Bad decisions made by unqualified development teams, such as the least expensive, smaller teams. Highly experienced development expertise is critical to avoiding long-term technical debt.
- Outsourcing development and critical decisions to non-stakeholders. Since non-stakeholders have less investment in the project, they will be more willing to accept larger technology debt to meet their requirements.
- Top-down management led to less ownership and less empowerment of the rank and file organisation. The less capable organization is more likely to accept shortcuts and trade-offs.
The impact of the epidemic on technical debt
Companies face technical debt swaps all the time, but they’ve encountered these tradeoffs even more so during the pandemic. COVID-19 has led to major changes in most industries.
Companies like Zoom and Amazon have seen a massive increase in business that has required them to quickly adjust their operations.
Companies operating in the travel and leisure industries have experienced the ups and downs of their business, and they have had to find alternative ways to make money. Take a look at the changes in the movie industry, where movie theaters have closed but movie streaming has boomed.
Many industries have had to quickly adapt their business operations to survive. When companies have had to make quick decisions to deal with these changing requirements, many have had to make major structural changes to their applications, systems, and back-end processes. They did not take the time to perform long-term planning and evaluation but instead chose the necessary shortcuts in order to meet tight schedules and changing requirements.
This generated a significant amount of technical debt in a matter of months. When the epidemic lasted longer than expected, the technical debt grew and stagnated, making the situation worse. These companies will pay this technical debt for many years to come.
A mountain of technical debt is one of the hidden long-term costs of the protracted worldwide pandemic.