Sherif Mansour, Banking and Capital Markets Transformation Director, Middle East & Africa, DXC Technology, has penned an exclusive opinion piece which examines the growing issue of technical debt for enterprises across the region.
In the ever-evolving landscape of technology, businesses in the Middle East find themselves at a critical juncture. The rapid expansion of cloud services and the introduction of new technologies have created an urgent need for organizations to modernize at an unprecedented pace.
To stay ahead of the curve, companies often invest heavily in IT to drive innovation, enhance efficiency, and reduce costs. However, the short-term focus on meeting immediate targets to maximize assets and revenue while minimizing operational cost has led to an explosion of technical debt and no coordinated plan to address it.
The Challenge of Technical Debt
Technical debt is the incurred cost of rework caused by opting for a quick but inferior solution instead of the right technology solution. In other words, while a past investment may have worked in the moment, it could fail to hold up well over time. Tech debt comes down to a series of trade-offs that lead to inefficiency across a business and becomes increasingly hard to undo.
Despite its intangible nature, it significantly hinders innovation and slows down growth. A global study of business leaders by DXC Technology, Embracing modernization: From technical debt to growth revealed that 46% of C-suite information and technology executives acknowledged tech debt as a barrier to innovation and growth.
Tech debt encompasses more than technical aspects, extending to infrastructure, applications, user experience, data, and processes. Suboptimal decisions over time, limit an organization’s adaptability to change, deterring the pursuit of digital transformation. The report found that 47% of respondents identified knowledge barriers as highly significant, while 38% expressed the same for cultural barriers.
Impact of Tech Debt Across Dimensions
It is, however, crucial to recognize the broader implications of tech debt.
- Cost to People: Global employers face urgent challenges in talent attraction and retention, particularly in IT. Legacy technology, lack of integration, and outdated organizational processes hinder employee motivation to innovate, potentially losing key talent to competitors.
- Cost to Process: Legacy systems and incompatible technology impact productivity. The challenge is when these work arounds become embedded in the company culture and inefficiencies become “just the way we do things here”. This makes it more difficult to modernise.
- Cost to Innovation: Tech debt also inhibits organizations from leveraging new technologies like AI or automation, making adoption challenging and costly. DXC’s research 46% of executives find tech debt impacts their ability to transform and grow.
- Cost to Security: Outdated or siloed technology complicates security and compliance, exposing organizations to significant risks.
Reframing the Conversation: From Tech Debt to Org Debt
Tech debt has broader consequences on people, processes, security, and innovation opportunities, beyond just financial implications. Reframing tech debt as organizational debt (org debt) offers a more comprehensive perspective, including infrastructure, applications, user experience, data, process debt, and knowledge debt.
A Path to Modernization
In today’s dynamic environment, a solution that was once perfect may also become problematic. Addressing org debt requires a mindset shift, fostering flexibility within the organization and empowering individuals to understand the impact of debt on organizational adaptability.
This involves a four-step plan:
- Reframe Org Debt as Modernization: Clearly articulating org debt fosters a future-focused mindset, essential for successful modernization efforts. This strategic shift paves the way for candid executive discussions, providing a comprehensive overview of existing assets.
- Define Opportunities: Modernization requires collaboration between business and technical sides. While the CIO and CTO spearhead modernization efforts, effective communication of organizational debt to the C-suite and broader stakeholders is essential.
- Clear Barriers: Every industry has a unique profile, as does every organization. Identifying this profile and clearing industry-specific barriers helps address org debt.
- Organize for Execution: Modernization is an ongoing, collaborative process benefiting the entire organization. By aligning objectives, addressing barriers, and fostering collaboration, the benefits of modernization can be realised across the organization, from cost savings and carbon reduction to enhancing employees’ work experiences.
Today, the Middle East is focused on ensuring the growth of innovation and technological advancement. The UAE Digital Government Strategy 2025, Qatar National Vision 2030, Abu Dhabi Digital Government, Saudi Vision 2030, and more underline the region’s commitment to digital transformation. Businesses play a key role in this fast-paced and rapidly progressing landscape of the Middle East.
It is now therefore more imperative than ever to manage tech debt to sustain the region’s growth and competitiveness. Organizations can redefine their stance on tech debt, integrating it as a vital aspect of the modernization process. Recognizing that tech debt stems from diverse trade-offs and substandard decisions empowers leaders to address it more strategically.
As a starting point, business leaders can take The Tech Debt Audit to immediately understand the level of tech debt in their organisations and where their barriers to addressing tech debt lie. As technology evolves, the effective management of organizational debt will ensure that innovation flourishes, and the region progresses on its journey of growth and technological excellence.
