Forbes Magazine recently published an article that identified Technology Debt as a significant and real challenge for all businesses. Technology Debt is a concept used to highlight the cost of addressing all technology modernization gaps in a business. This concept becomes a more of a reality as businesses seek to drive business valuation and/or seek private equity funding or acquisition but has tangible impact regardless.
According to a study conducted by McKinsey, IT budgets are not keeping pace with the growing IT demands, security threats and compliance requirements which are being pressed onto small businesses at an exponential clip. And the larger the Technology Debt, the risk and exposure for that business grows too. Quantifying tech debt can be a challenging process. While fixed asset borrowing is repaid with interest over time, tech debt grows silently off the books…so seldomly does a company that gets behind, truly make up the budget gap in the following years. They typically just reallocate the same budget to the highest priority each year while certain areas of the IT initiative get left behind.