Technical Debt And Its Consequences On Organizations

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78% of companies took on more technical debt last year, with more than half (56%) stating that they accepted the burden of technical debt because they were obliged to act.

Technical debt reflects the implicit cost of additional rework caused by choosing a simple, limited solution, rather than a better approach that would take longer. Simply put, it is the result of prioritizing fast delivery over perfect code.

The results of Software AG’s 2022 Situation report show that only 58% indicate a formal strategy for managing technical debt.

According to a report by OutSystems, companies spend more than a quarter (28%) of their IT budgets on dealing with technical debt, compared to about a third (33%) who channel resources into innovation and building new skills.

The problem is more complicated in large businesses, where about 40% of the IT budget is earmarked for technical debts. 69% of respondents state that the consequences of technical debt significantly limit the innovation capacity of companies. 60% of respondents state that technical debts ultimately affect performance.

The sources for this piece include an article in CIO.

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