How Technology Debt Leads to Larger Expenses Down the Road?



During times of economic uncertainty, organization's naturally have to take a look at expenses and make choices on where to make necessary cuts. It is inevitable that there will be times where your organization must make hard choices on where best to spend allocated budget dollars. We know that these decisions can be overwhelming and tough to make which is why we answered some questions about making tough budgetary decisions in the technology arena in our recent webinar titled "Optimizing IT Expenses in an Uncertain World". Watch the webinar on demand now.

One concept that we discussed during the webinar was Technology Debt. Jon Morningstar, President of Mapletronics, discussed 2 main types of Technology debt. The first refers to technology expenses that are inevitable but are postponed the second refers to shortcuts taken that will cause additional expense in the future.

The inevitable but delayed expenses are technology costs that will have to be made but can be delayed for a period of time. A good comparison would be getting an oil change in your car. While you can get by with not getting the oil changed immediately when it's needed, you will eventually have to spend that money and get that oil changed. The same can be said for some technology expenses. For example, say your organization needs new laptops every 5 years. Whether you put that off for a few months or a few years to cut costs or make the purchase now, you will inevitably need to make that expense.

Important things to note are that just like in your car, putting off replacement or maintenance to save money right now, can actually lead to a higher cost down the line. For example not changing your oil on time could lead to potential costly mechanical issues and not updating your laptops could cause a cut in productivity as that computer could cause productivity issues as it gets slower as it's outdated and could need more time getting fixed or worked on since it is older.

Comparatively there are also expenses that you can cut initial costs on such as getting less expensive laptops or buying refurbished instead of new. While this saves money for your organization right now, down the road it can most likely lead to MORE costs as a cheaper laptop will be slower, may need repaired more, and may lead to additional repair costs.

When we look at technology debt on an even larger scale, say looking at your server instead of just laptops, we can see how holding off on replacement or going a cheaper route could lead to issues that could cause lag time or disruptions throughout your organization at a much larger scale. If your out of date server crashes, your entire organization could end up down and out for a period of time.

While it can be tempting and sometimes necessary to cut or decrease costs in your technology budget, it's important to consider this concept of technology debt. While you may save money immediately there are certain technology expenses that you will inevitably have to spend the money on no matter what. By waiting to fix issues or replace outdated equipment you can ultimately cause your company to spend more money in the future.

For more information about technology debt and other things to consider when making IT budget adjustments watch our free webinar on demand.

You can also schedule a free consultation to discuss your technology needs/concerns or reach out to your CRM for more information.

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