In the last several decades, there has been significant advancement in technology, and it is now a key element in every organization. Many of these advancements have revolutionized the way things are done, which gives technology – systems, applications, hardware, etc. – a short shelf life and competing companies are disrupting their industries with the latest, biggest, most advanced digital platforms. It’s keeping up with the Jones’s but for tech. The internet is now an important part of any business, and it is less and less common for a company to not
have an internet presence. All the new technology and the need to innovate to grow can cause, you guessed it, tech-bleed.
Technology, more specifically, technological changes and costs, are often considered a taboo subject in meeting rooms and around the office. The topic may be taboo, but extremely crucial for business growth and stability. You may be wondering what exactly tech bleed is: tech-bleed, or technical debt, is when companies do not realize that their tech platforms and / or applications are more cost intensive than need be. Dean Bourque, the Director of Digital Strategy, Transformation, and Engagement at RNDC said, “Technical debt is cumulative, where issues build up over time. It’s very much like credit card debt in that you are getting taxed over and over again and people have the desire to only pay the minimum”. The lack of efficiency and effectiveness in outdated tech along with the rising costs of maintenance and fixes, especially when there are fewer and fewer employees that are trained in maintaining older systems and platforms, is costing companies millions in potential revenue, overhead, and efficiency. The short-term costs of modernization are high, but long-term savings, efficiency, and effectiveness are a greater value.
Examples of Tech-Bleed
- A company has outdated hardware and / or legacy systems that require antiquated skillsets and individual resources, which are limited, instead of modernizing and digitizing the systems into a single application that can be managed and maintained by a single resource.
- A company acquires another company and now has multiple ERPs (enterprise resource planning tools) that do not connect with one another to provide consolidated performance reporting. Thus, reporting and analysis are more time-consuming and there are more maintenance costs.
- Departmental / product expansion can leave a company with multiple, small databases to manage various datasets. This creates more overhead and maintenance while creating more work for management and users to view and compile data.
- Rogue / ‘impulsive’ IT purchases that then need to be folded into an Enterprise situation.
- Reduction of focus on legacy technology and ballooning costs for end-of-life hardware/software becomes a “financial surprise” regardless of the number of warnings and time prior.
One of the biggest challenges an organization faces when adopting innovative technology is that it is exceedingly difficult for the employees and organization to do business while running the organization and dealing with a tech transition. The initial phase of any modern technology adoption can affect customer satisfaction during the implementation so to mitigate this challenge, organizations and their employees need to realize and accept that technology growth and improvement need to be budgeted items. You need to be ready for technical growth and change because it is inevitable: “Everything we create will be destroyed – no system or process is timeless” (Bourque, D. RNDC 2021). While the thought of a migration to a new platform or the transition from one reporting system to another can be daunting and sounds tedious (because it is), the costs of NOT facing facts and making a change are so much higher than the potential costs of remaining with the less-than-effective-status quo.
Costs of Tech Bleed:
- Loss of efficiency – more time spent on fixes and gathering data from multiple, often slower, systems.
- Financial cost – time and money spent on patches for issues that inevitably arise in older technology as well as time spent self-teaching and research on the system.
- Slowing new development / projects – most organizations are not staffed for true development / operations split, which causes the same resources to be pulled into the needs of today while straddling the demands for the future.
- Loss of business – inability to take on new projects and clients due to a lack of resources as employees are bogged down on previous projects and technology limitations.
- Reputational damage – Client dissatisfaction due to poor efficiency and potentially poor results caused by antiquated systems and burned-out employees.
- Dissension among the ranks – non-IT employees can become frustrated with the IT staff due to a lack of communication regarding IT priorities and issues. Falling behind in tech & playing ‘catch-up’ can damage departmental trust and the company’s reputation.
- Employee turnover – working overtime on a regular basis to keep up with client demand while struggling with the inefficiencies of the company technology can lead to employees seeking other employment.
- Additional manual processes – as systems begin to break down and become less efficient, manual processes are often added into everyday workloads to ‘band-aid’ the issue.
Being in a state of tech-bleed and not having those crucial conversations can create a cycle that could potentially destroy the business. Clients become dissatisfied, users are overwhelmed and turning to IT. IT becomes frustrated and turns to management and management spends time trying to placate clients, motivate both the workforce and IT while often avoiding the cash expenditure that could fix the issues. The cycle repeats until either the company loses too much business and folds, or they work to solve the problem and purchase / upgrade systems to integrate data and increase speed, efficiency, and performance, thus increasing client satisfaction and growing the business.