69% of IT Leaders Consider Technical Debt as One of the Biggest Threats to Innovation

by Brian Pereira | Jun 19, 2021

Modern application platform developer OutSystems reported that 69% of IT leaders identify technical debt as a major threat to their companies’ ability to innovate, as seen in its latest report, “The Growing Threat of Technical Debt.” With COVID-19 exposing vulnerabilities in organizations around the world, this latest industry survey from OutSystems examines the cost of technical debt facing businesses across industries and geographies. And this impacts IT spending and budgets.

Key findings

A majority (69%) of IT leaders say technical debt poses a fundamental limit on their ability to innovate, along with 61% saying it drags on their company’s performance and 64% agreeing it will continue to have a major impact in the future.
There is a massive opportunity cost for businesses of all sizes across all industries as they dedicate time, money, and other resources into technical debt instead of innovation. On average, businesses spend approximately one-third of their IT budget addressing technical debt – this jumps to 41% for enterprises.
There isn’t a sole cause of technical debt, though IT leaders cite too many development languages/frameworks (52%), turnover within the development team (49%), and accepting known defects to meet release deadlines (43%).
Businesses continue to delay addressing technical debt, further exacerbating the issue. Only 20% say tech debt is something they’re currently managing well, though 36% report they’ll be able to manage tech debt in the future.
Technical debt compounds as companies grow. Enterprises spend 41% of their IT budget on technical debt, while small businesses spend 27%.

Technical Debt, IT Spending

Impact on IT Spending

“Technical debt can be particularly costly in the financial services industry, where companies thrive on their ability to innovate while providing fast and reliable services,” said Izak Joubert, JTC Group CTO. “Within JTC Americas, we’ve worked with OutSystems for years to develop software products that streamline financial transactions for our customers. They’ve helped us move beyond concerns about technical debt so we can focus on creating software that is predictable and secure as well as quick and easy to update.”

“For years we’ve seen the negative impact of technical debt on businesses’ ability to prioritize innovation and flexibility, which are critical elements to gaining and maintaining a competitive edge,” said Rui Gonçalves, Partner at KPMG in Portugal. “Through the longstanding partnership between KPMG and OutSystems, we’ve witnessed the significant capabilities that modern application development offers in terms of eliminating technical debt as well as empowering businesses to shift their resources toward innovation in a meaningful, successful way.”

Methodology

Findings in “The Growing Threat of Technical Debt” are based on a global survey of 500 IT leaders spanning enterprises, commercial companies, and small businesses around the globe. Fielded in partnership with Lucid, the online survey was conducted in May 2021 across the United States, Australia, the United Kingdom, France, Germany, Portugal, India, Brazil, the United Arab Emirates, and Singapore. Respondents span industries including finance, retail, healthcare, education, business services, government and public administration, media and telecommunications, utilities, and real estate.

To find out more about how and where technical debt is affecting business and IT leaders around the world, visit stoptechdebt.com or download the full report here.

OutSystems

OutSystems was founded in 2001 with the mission to give every organization the power to innovate through software. The OutSystems modern application platform’s high productivity, connected, and AI-assisted tools help developers rapidly build and deploy a full range of applications anywhere the organization requires. With more than 435,000 community members, more than 1,500 employees, 350 partners, and active customers in 87 countries and across 22 industries, OutSystems has achieved global scale while helping organizations change the way they develop applications.

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Brian Pereira

Brian Pereira is an Indian journalist and editor based in Mumbai. He founded Digital Creed in 2015. A technology buff, former computer instructor, and software developer, Brian has 29 years of journalism experience (since 1994). Brian is the former Editor of CHIP India, InformationWeek India and CISO Mag. He has served India's leading newspaper groups: The Times of India and The Indian Express. Presently, he serves the Information Security Media Group, as Sr. Director, Editorial. You'll find his most current work on CIO Inc. During his career he wrote (and continues to write) 5000+ technology articles. He conducted more than 450 industry interviews. Brian writes on aviation, drones, cybersecurity, tech startups, cloud, data center, AI/ML/Gen AI, IoT, Blockchain etc. He achieved certifications from the EC-Council (Certified Secure Computer User) and from IBM (Basics of Cloud Computing). Apart from those, he has successfully completed many courses on Content Marketing and Business Writing. He recently achieved a Certificate in Cybersecurity (CC) from the international certification body ISC2. Follow Brian on Twitter (@creed_digital) and LinkedIn. Email Brian at: [email protected]