IT Strategy Matters: The impact of technology debt is often most apparent during a crisis.

Welcome to the 4th ‘IT Strategy Matters’ newsletter. I’m delighted that you are on this journey with me.  

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Last month, I discussed the CrowdStrike issues on 19th July and how they remind us of the futility of working in IT.  Here's the post: 

https://www.itstrategy.coach/newsletters/it-strategy-matters/posts/it-strategy-matters-as-an-it-leader-is-it-your-responsibility-to-think-the-unthinkable

But as Delta Airlines found out, it’s events like this that expose the true cost of technology debt.

On 12th August, I published a LinkedIn post about how Delta Airlines’ issues with CrowdStrike seem to have been made worse by technology debt https://www.linkedin.com/feed/update/urn:li:share:7227212881677692930/ 

As I scheduled the post, I paused for a moment, wondering whether I was tempting fate by posting on that day as I would have just got off a flight with Delta from Atlanta to Cancun. I told myself not to be so superstitious! When I arrived in Cancun without my luggage, I slightly regretted my post. I really regretted it the following day whilst wearing jeans and a black t-shirt in 34-degree heat at 95% humidity! 😓 Thankfully it turned up after 24 hours and I was able to enjoy the rest of my holiday being as cool as I could feasibly be.... 

I don’t know the details of the issues that Delta has been facing, and I must assume that the journalism on which I based my LinkedIn post is correct. They seem to have experienced much worse issues than most of the other companies worldwide who were affected by the CrowdStrike problems, and those issues seem to have taken longer to resolve. The cause seems to be the technology debt that they have built up. 

Investing in repaying technology debt can be a difficult argument to win against your Finance colleagues. The result of what can be a significant investment is usually invisible to the business and doesn’t deliver any tangible return on investment. What it does do is to significantly mitigate the risk of an issue such as the one caused by the CrowdStrike update becoming more impactful than it might otherwise have been, or enable you to take advantage of something that you would otherwise not have been able to if you were still saddled with that technology debt. 

Let me draw a parallel with property as property can often feel like a liability rather than an asset and is a nice real-world example: If I own a property and the boiler suddenly fails, I need several thousand pounds most likely to fix the issue. My lack of previous investment in boiler maintenance or perhaps an insurance plan for boiler replacement is the property equivalent of technical debt. It was easy to ignore my lack of investment in the boiler whilst it was still working, but I regretted it when the boiler broke. 

Now imagine that rather than the boiler breaking in the middle of summer, it breaks in the middle of an extreme cold snap in the middle of winter. The extreme cold weather is a bit like the CrowdStrike issues: an unexpected event, outside of my control, the impact of which needs to be managed and recovered from. Most of my neighbours deal with the impact of the cold weather by turning up their heating, but I can’t do that as the technical debt that I have built up through lack of boiler maintenance has just been realised by the boiler breaking. My problems are suddenly significantly worse than those of my neighbours but could have been avoided had I not got into technical debt. 

Technical debt can also materialise to make an opportunity more difficult as well as a problem more serious. Imagine that a valuable opportunity came along like investing in solar panels at a discount thanks to some government funding only available for a limited amount of time. It’s a great opportunity to change the energy infrastructure of my house, to save energy bills in the long-run and to have a positive effect on the environment. Such benefits are often present in IT investments as well. However, my ancient boiler is not compatible with the solar panel system and the two cannot be integrated together. To take the opportunity of investing in the solar panels at a discount, I need to upgrade my boiler. This is doable but adds both time and significant cost to the project of installing the solar panels, all because of the technical debt that I have built up through under-investment in the boiler.  

Technology debt does not always need to be avoided. Sometimes we deliberately get into technology debt, in the same way that we might choose to enter financial debt, based on a calculation of the cost and risk that this represents. This will be offset against a benefit such as prioritising funds for another project which we think will be more impactful, or to temporarily limit spending on IT to help the cashflow or EBITDA of the business for the current period. That, like my under-investment in my boiler, is a choice that we as IT leaders can and often do make, but we should work hard to fully estimate the cost and risk of making this choice before we do so. 

In my experience, the business case for an IT investment is often not completely fleshed out. We often do not include all the potential costs or benefits, and we put together a business case which is compelling, but not complete. Let’s go back to the example of my boiler: When I was choosing not to invest in the maintenance or upgrade of the old boiler, I probably estimated that the risk of this was that I would need at some point to urgently invest in a new boiler when the old one broke. I would have assumed that I would be able to source a boiler quickly and get a plumber to install it at short notice, and that I would be able to afford this at the time that it happened.  

If you had told me that the boiler would break in the middle of this cold snap, and maybe that this would be on Christmas Eve when I could neither source a boiler nor get a plumber, and it would happen just when my whole family was arriving to celebrate Christmas at our house, I would think differently about entering into the technical debt because the risk of doing so was greater than I had estimated.  

The same applies for the decisions that we make about technology investments. I am sure that the IT team at Delta had some idea of the risk that they were exposed to because of their technical debt and did intend to pay this off at some point. I am also sure that if you had told them that the implications of this technical debt would be that they would make headlines as one of the worst-affected victims of the CrowdStrike issues, and that impact of this would not only be reputational, but would cause significant operational delays, delayed and cancelled flights, disruption to baggage handling, customer dissatisfaction and costs in customer compensation such as the claim that I have made for my delayed bag, they would have thought differently about entering into that technical debt. 

Yes, hindsight is a wonderful thing. But as I said in last month’s newsletter, we’re going to have to think of evermore crazy scenarios and how to mitigate the risks that they pose to our technology operations and business continuity. We also need to think what risks might exist within our supply chains as well as directly in our own organisations.  

As an IT leader, you have a vital role to play in shaping and delivering the IT strategy that supports your organisation's goals and vision. You also must be ready to adapt and respond to the unexpected challenges and opportunities that may arise in the rapidly changing world of technology, and the unpredictable world in which it is used. This includes thinking more thoroughly about the risks that technology debt poses to your organisation and creating a more thorough business case for either consciously entering into technical debt, or for paying it off before its risk is materialised.  

Paying off technical debt can be a difficult thing to persuade the business to do though. Whilst you may be able to imagine and articulate the risk of not doing so, the true impact may not be understood or believed by the business. I have seen many examples of CFOs rejecting business cases for the repayment of technical debt because they cannot see the tangible return on the investment at that point in time.  

The dynamic of this discussion with the business will likely mirror the general relationship between IT and the business: If the relationship is strong, and the business trusts the judgement of the IT team and leadership, they are more likely to allow that IT leadership to prioritise their own spending, even if this is on repaying technical debt for no obvious or immediate ROI. 

In other cases, the business will want to be mor involved in deciding the priorities of IT spending, potentially micro-managing the IT budget. In these scenarios, my experience is that the best way to repay technology debt is the make it a pre-requisite for and an integral part of the business case for investing in something that will add significant business value and deliver a strong ROI. If you can make this align to a significant business priority or technology that is flavour of the month, like an AI investment, then all the better. This business case is reality. It is very likely that you will not be able to invest in this new technology to deliver the stated business benefit without first repaying your technical debt, but rather than presenting these as two separate investments, build a business case which connects them together.   

It may well be that repaying the technical debt has wider benefits than just enabling this new technology investment, but those wider benefits are probably more difficult to articulate. The benefit that the new technology to the business is likely to be significant, and more than enough to cover the cost of repaying the technical debt, so it's reasonable to allocate the full cost of the repayment to the business case of this new investment. And the business is more likely to say yes, to get the promised benefit if the new technology. 

 

 

 

Thank you for reading this edition of IT Strategy Matters. I hope you found it useful and informative. Please feel free to share it with your colleagues and friends who might benefit from it.  

Until next time, remember: IT strategy matters! 

 

Dan – The IT Strategy Coach 

 

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