The CFOs are highly responsible for the IT functionality. In several companies, IT department now directly answers to the CFO. Now CFO has turned strategic and their utmost important task is to avoid tech debt and enhance the processes and services as technology platform develops.
Tech debt isn’t a new term; basically, it refers to the lack of attention in building effective software development projects. Such insufficiencies are seldom produced when the future time isn’t considered or if shortcuts misfire. Financial officials, however, see tech debt and the aspects which cause inefficient usage of technology from a different perspective than the IT department does. The risk linked to running IT department poorly might result as the biggest threat to the company causing millions of dollar loss and a complete damage to the repute of the company.
Aspects of tech debt
The basic aspect of tech debt is inefficient tech leadership. Usually, 30 percent of the complete debt load depends on hiring an inefficient IT leader. Often the CFO fails to acknowledge the traits of an IT leader. Previously, companies use to put employees with high computer abilities in the IT team. But, in today’s time, this is not enough! The IT leader should know the right way to execute and handle key apps, deliver significant data and develop a good customer experience.
The second point is the poor oversight. Around 25% of the tech debt basically stems from the inefficiencies in reporting, discipline as well as strategic focusing. Malfunctioning and outdated systems stand third in the picture with 20% of the role in the tech debt total.
Irrational spending stands 4th with 15% of debt responsibility. It could be because of over spending, under spending, poor allocation of resources and more. You can set spending benchmarks by looking out for the expenses of similar sized companies in your segment.
Last but not the least factor responsible for tech debt is chaos, standing at 10%. Several companies have cross-functional procedures, incomplete data, separate systems which cause chaos leading to tech debt.
Get out of Tech Debt
Once you have evaluated the tech debt of your company, you need to look out for steps to improve it and encourage better inventions:
- Evaluate your IT functions. Go for a detailed study of your IT departments, its systems and structures, the budget details and project reports. Mark you present state including IT spending for the projects running as well as the new projects. Rank where prospective changes can be made for a better impact.
- Introduce general reporting processes. Standard IT reports monthly ending procedures should mark the present status and rank the IT initiatives, source updates, risk management issues, and monitoring data. You can hold people responsible for understanding the performance and status of the departments.
- Organize project governance. Review the priority list of your project for better alignment of the projects in sync with the business strategies.
- Assess and standardize IT spending. Tech debts are often reduced by evaluating your present IT spend.
Lastly, find out whether you’re investing the right amount of technology or not. Check online to find out how efficiently can you channelize your technology resources to reduces tech debt. Learning about credit card refinancing and going for it can be a smart move in order to have a tension free life.