Firms' technical debt rising after lockdown rush for digital upgrades - report

6:58 pm on 5 February 2021

Many businesses that rushed out to buy new software ahead of the first lockdown are finding themselves with expensive technology they no longer have use for.

Open plan office.

Technology market research firm IDC some firms are paying the price for not doing their due diligence in the rush to digitise ahead of the first lockdown (File image). Photo: 123RF

A report from technology market research firm IDC has looked at the current digital landscape and how it may change over the next five years in New Zealand.

One issue singled out is rising technical debt, which are the costs associated with managing the upkeep of a technology that is not fit for purpose or appropriate for the businesses' needs - be it cloud computing or messaging tools.

The consequence being that firms did not receive the value for their money, and worse, there was not an immediate way to opt out of the licensing agreements.

"Through 2022, coping with technical debt accumulated during the pandemic will shadow 50 percent of chief information officer, causing financial stress, inertial drag on IT agility and 'forced march' migrations to the cloud," the report said.

IDC New Zealand director of research and country manager Louise Francis said some firms were paying the price for not doing their due diligence in the rush to digitise ahead of lockdown.

"Businesses have spent all this money and now they are realising it's not really suitable for what they want to do in the longer term."

Francis said the firms who were already undergoing a digital transformation of their business were prepared for the quick decisions that needed to be made when Covid-19 emerged.

"It's the ones who just went out and did it, and didn't think of the consequences in the long term, they didn't have the luxury of doing that unfortunately."

Francis' advice for firms who felt like they were saddled paying for technology, was to talk with the vendors.

She said sometimes firms procured software for a specific purpose and did not make use of all that it had to offer.

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