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In our first two posts on technology debt, we explained what technical debt is as well as identified the top causes of bad technology debt.
As a quick review, bad technology debt as the spending of money and resources that do not increase revenue or market share and/or have no lasting value on decreasing costs or improving your company’s ability to go to market faster on future endeavors. Bad technology debt can also be any type of project or system that has extremely high support costs and/or project queues going forward that will consume your technology budget and resources.
The top 5 originators of bad technology debt include:
Now that you know what technical debt is and where it originates, what can you, as a CFO, do about it? As the leader of financial strategy for your company, you are in the ideal position to utilize your strong relationships with the CIO and business leaders to ensure the company is making the right investments, in the right ways, to make a positive impact on your business and your customers.
Here are the top three things a CFO can do to help lead their company out of bad technology debt:
As the CFO, you’re the party that both groups go to for funding to move their projects forward. While you are not there to challenge why they are doing something, it is your responsibility to make sure the investments made by both groups are aligned and indeed “investments” as opposed to more bad technology debt. Make it a requirement for some group within your company to understand and catalog all projects within the company, who they impact, what systems they touch, and why. This degree of rigor is required for you to keep your company's investments on track.
The CFO is responsible for ensuring that the company’s financial success is moving in a positive direction. As part of your company’s budgeting and investment process, make sure you are evaluating the actual impact a project or investment will produce. If your company is continually spending millions for system upgrades with no benefits other than escaping a possible system crash, you may want to have have some strategic conversations as to how you can get out of this vicious cycle. Ensuring that the majority of your investments are truly making an impact to your company and your customer is crucial to your success. In today’s market, staying the same is no better than going backwards.
One of the biggest impacts a CFO can have is partnering with other executive leaders to minimize their on-premise applications and capitalize on the cloud. There is little reason for a company to endure the exceedingly high costs of supporting the software and hardware needed to keep on-premise solutions up and running. It also burdens your company with the need to focus resources on keeping your systems operational as opposed to creating the innovation and customer experience required to stay competitive and win new business. Moving to the cloud eliminates your hardware costs and a majority of support costs, allowing your company to focus on adding value to your business and your customers.
Going to the cloud can also substantially reduce development time and project queues, which in turn decreases your project time and cost, while increasing your ROI. Think about how much money your company spends on recreating the mobile experience to match the online experience, in addition to making sure your company’s mobile apps continue to work on the latest OS updates. By moving to a cloud leader such as Salesforce, your organization can develop an application once and know it will continue to work with the latest browsers and mobile operating systems with minimal effort on your part.
By implementing these three regimens within your company, the CFO can not only reduce their company’s bad technology debt but, can also increase your influence as a strategic leader, helping drive your business towards increased financial success.
