Developed by:
Jim Buttjer, American Digital Sr. SAP Account Executive, Michael “MJ” Johnson- Director of SAP Solutions
How do you get out of technical debt?
It can be challenging to plan a path for getting out of technical debt. But just like paying off other debts, the key is to simply start. Work with a partner on your strategy for resolving technical debt. Sometimes they both merit and can be handled as an independent project, while other times we can identify opportunities to pay those debts in an upcoming project or purchase.
If you can go big, start with the biggest or highest interest factor. For SAP customers, that usually involves getting your core transactional system of R/3, ECC, or S/4HANA current again due to the scope of its functionality, the complexity of its dependent interfaces, and the scope of maintenance involved. If you need to notch a win or two with smaller projects to gain political capital, momentum, and budget for the bigger technical debts, do that. Get current and stay (close enough to) current. The longer you let your software, infrastructure, and, yes, even your team’s skills get out of date, the more doors close on innovation options, efficient maintenance, performance and ease of operations, and employee (and consultant) retention. Eventually your technical debt will force a multiplier in the number of bigger decisions to be made, which cost more to execute, have a broader and deeper impact you may not be comfortable with, and often require extended time and effort to get current again compared to your industry peers.
Having a lot of technical debt frustrates executives when they attend a conference and hear that another company in their industry completed an upgrade to the latest version of their platform in six months and are already seeing the payback. They ask you about doing the same thing in your organization, but they get a frustrating answer. They hear a similar project in your company will likely take 10 to 12 months and require two to three times the cost. Meanwhile you’ll have to complete this prerequisite project first as well, which had been put off for years. How discouraging is that? When you’re told “we can’t do that” enough and you don’t get a second opinion, inevitably decision makers feel trapped and are less inclined to want to deal with it as the time, cost, and complexity rises each time they ask. And it’s easy for that mentality to let technical debt grow in your environment.
If your company has been accumulating technical debt, get help. One of the easiest ways to start the process is acknowledging the problem. Sometimes organizations get stuck doing things the same way—or not doing the right things in this case. And that needs to change. By investing part of your annual budget in wiping out technical debts, you’ll keep it in check while enabling your strategic investments to move forward efficiently and effectively.
One global brand had had enough and finally put the category squarely in their 2020 budget: “Capital Projects” and “Technical Debt”. And those were prioritized under the same ranking system. If you do that and see a mix of 70 percent maintenance and 30 percent innovation, you probably have some work to do to flip that more toward the range of 60 to 70 percent innovation and 30 to 40 percent maintenance.
Change Your Organizational Mindset to Become Proactive and Invest in IT Assets.
SAP is an enterprise investment in process integration, automation, and business enablement—today and tomorrow. By getting to fewer systems or just one system of truth, one standard for processes and data, a robust infrastructure platform, and a team speaking the same language and focused on continuous improvement, SAP has proven its value as a major enabler of ongoing enterprise transformation. But if it’s left to linger, that same asset can quickly accumulate technical debt that, if left unchecked, can derail even the best roadmap and opportunities to delight customers and win in the market.
By changing the mindset in the organization from allowing debt accumulation to proactive investment in assets, you can enable the switch from the threat of being an industry laggard to industry contender and leader.
- According to SAP Technology & Innovation Overview and Outlook, “organizations that lead in customer experience outperformed laggards on the S&P 500 Index by nearly 80%.”
On the flip side, the same research from McKinsey had foreboding findings for those companies that didn’t respond to disruptions, innovations, and digital transformations in the market:
- Digital disruption shaves 30% off company revenue growth and 25% off growth in EBIT when they don’t take action.
It’s terribly hard to execute your digital strategy and transformation when your organization has a significant amount of technical debt or even a moderate amount in a critical spot in your technology ecosystem like SAP.
What You Can Do Next
It’s always a good time to have an external review or assessment of where you’re at vs. where you could be, whether that’s in line with current recommendations and support levels or measured against progress toward a target achievement in your digital strategy.
Next, if it has been more than a year, review your roadmap considering the pace of innovation, change of leadership, strategy, and market conditions. (I bet no one had a global pandemic on their roadmap a year ago.) As you review your roadmap, ask yourself: Is this roadmap still relevant or could it be with a few tweaks? Does it include maintenance, and does it address technical debt now or soon? Do you see dependencies between growing technical debt and the ability to accomplish the remainder of the milestones on your roadmap? If your roadmap doesn’t take process, people, and technology into consideration for how that milestone will be accomplished, it’s a good time to review it with a trusted advisor.
One client knew they needed ongoing guidance to stay on course. Shortly after implementing Environment Management (as a Service) to better align and coordinate disparate interests and needs between the SAP program, production support, business operations, and IT departments, they not only avoided a major collision late in the SAP implementation project but also reduced risk by rolling it out in stages. They were still able to retire the old storage system two months ahead of plan and saved $500,000 on premium out-of-lease payments with the vendor. They wiped out that technical debt, accelerating the path to adoption and payback of the new storage platform’s innovations.
Bottom Line
Technical debt is a relatively new term. But make no mistake, in the case of SAP and general IT, it all comes down to credits and debits in the technology ledger. Technical debt can take the form of simple red entries that are easy enough to cancel out quickly or major swipes of red ink that bleed through the ledger if left to linger. By keeping your ledger neat, regularly addressing technical debt and not letting it accumulate, you’ll both enable the pace and rewards of innovation and digital transformation while minimizing the cost to do so along the way.
Also, if you’re interested in learning more about this topic and being part of a virtual roundtable discussion, please join us July 29th at 10:00am cst. for our Technical Debt webinar.
All attendees will be entered to win one of three Keurig Drinkworks Beverages Makers- a $349 value. Check out this artisanal beverage maker here