A Wake-Up Call for Business Leaders
Today, discussions around technology costs often center on how expensive a feature is to run, how difficult it is to implement, or how it should have been designed differently. We nod in agreement, recognizing that the code, process, or database could have been built more efficiently. This scenario plays out in nearly every company with every software development release. But why does this keep happening?
The answer lies in our relentless focus on velocity—delivering features quickly—often at the expense of strength, maturity, efficiency, and proper design. The result? A mounting accumulation of technical debt (tech debt)—a concept most technology leaders understand but struggle to quantify.
Why does tech debt matter? As companies continue investing heavily in new technology while maintaining decades-old applications, the cost of technology will keep skyrocketing. But what if you could reduce your technology spending by 25% or even 50% without simply cutting people or turning off servers?
The Total Cost of Code Over Time
One of the most overlooked aspects of technical debt is the total cost of code over time. When an inefficient process or poorly designed feature is deployed, the cost isn’t just in the initial implementation—it compounds over the years, affecting performance, scalability, and maintainability. As the business, data, and transactional volumes grow, these inefficiencies become exponentially more costly. Every inefficient process increases the load on infrastructure, requires additional support resources, and slows down future development, making long-term sustainability even more challenging.
The problem is that we rarely reject inefficient code or processes outright—we accept them because they “work.” But working is not enough. If a feature is costly to run, difficult to scale, or complex to maintain, it is already technical debt. We must change our acceptance criteria from being solely functionality-based to incorporating efficiency and long-term cost. By doing this, we will prevent unnecessary technical debt from ever reaching production, drastically reducing long-term technology costs.
A Real-World Example of Hidden Inefficiencies
We recently worked with a client whose core application was built in the late 1990s and now processes billions of transactions. One of their foundational processes, used globally, could be improved significantly. When I asked the application owner if they thought it could be 25% more efficient, they immediately agreed.
But let’s put that into perspective: What is the cost of processing transactions inefficiently for 25 years? Imagine taking the scenic route to work every day instead of the fastest one—how much time, fuel, and money would you have wasted? Now, apply that logic to technology at scale. The cost is massive, and the savings potential is even larger. As highlighted in The Wall Street Journal, outdated software inefficiencies represent trillions of dollars in unrealized value that could be reinvested into innovation and growth.
Why Aren’t We Addressing Tech Debt Today?
If we all agree that tech debt is a problem, why isn’t it a priority? Here’s what we typically encounter:
- Lack of Quantitative Measurement – While we understand what tech debt is, we lack a standardized method to identify, quantify, and prioritize it.
- Business Reluctance to Pause – The business cannot afford downtime. However, the reality is that without proactive remediation, inefficiencies accumulate and become more costly over time.
- No Clear Cost vs. Value Framework – Most organizations fail to present tech debt in a way that resonates with business leaders. Instead of framing the cost today, we should communicate the long-term value—how fixing these inefficiencies can improve margins, reduce operational costs, and increase agility.
The Path Forward: Prioritizing Efficiency
To unlock trillions in potential savings, we must bridge the gap between IT and the business. Here’s how:
- Reject Inefficient Code and Processes – Anything that is inefficient is already technical debt. We must shift our acceptance criteria to prioritize efficiency and cost-effectiveness, not just functionality.
- Dedicate 25% of Each Sprint to High-Impact Tech Debt Remediation – While innovation continues, allocate time and resources to fixing inefficiencies in mission-critical applications.
- Communicate the Business Value – Instead of focusing on today’s remediation cost, illustrate the long-term impact over five years, including cost savings, performance improvements, and increased capacity. By communicating the value versus the cost, the technology organization can become a value center, shifting from a cost-driven function to a strategic asset that drives business growth.
- Build a Culture of Efficiency in Development – Changing the development mindset is key. Efficiency must be a core principle upstream, not an afterthought downstream.
Executive Mandate: Take Control of Technical Debt Before It Controls You
Executives play a crucial role in dealing with technical debt. Optimized systems aren’t just about reducing costs, they drive long-term success, innovation, and competitive advantage. Technical debt quietly erodes margins, slows progress, and limits growth. Tackling it isn’t just an IT concern; it’s a business imperative that impacts efficiency, scalability, and overall performance.
Prioritizing the most critical technical debt today creates lasting financial and operational benefits. While change involves risk, the cost of inaction is far greater. Addressing inefficiencies now improves agility and frees up resources for strategic initiatives. This shift requires executive sponsorship, ensuring that efficiency and sustainability are valued alongside functionality. Organizations that act decisively will gain a competitive edge over those that continue to delay necessary improvements.
Developers and technical teams need leadership support to make real progress. Without executive backing, tech debt remains an ongoing struggle, often deprioritized in favor of short-term gains. By listening to and empowering technical staff, leaders not only improve applications but also foster a more engaged and motivated workforce. A culture that values long-term stability and performance will attract and retain top talent while driving better business outcomes.
Now is the time to act. Identify persistent inefficiencies, make them a priority, and drive measurable improvements. For a deeper look at the total cost of ownership in technology and how to shift your approach, check out my book, End of Abundance in Tech. Taking control of technical debt today will position your organization for a stronger, more sustainable future.