DXC Technology Reveals New Insights from Global Executives on the Impact of Tech Debt and a Four-Step Plan to Pay Off Debt Today and Discourage It in the Future
ASHBURN, Va., Oct. 17, 2023/PRNewswire/ -- A study of business leaders by DXC Technology (NYSE: DXC), a leading Fortune 500 global technology services company, has revealed that nearly half (46 % of executives say that technical debt, or tech debt, is the silent saboteur that inhibits their ability to innovate and grow.
Tech debt is the implicit cost of rework caused by choosing an “inferior but fast” solution instead of the “right” technology solution. In other words, while a past investment may have worked at the time, it may not hold up well over time. Tech debt tends to be a series of trade-offs that lead to sub-optimization and become increasingly difficult to undo. While different from obsolescence or depreciation, it can be measured in the billions for most large companies and has far-reaching implications that cost a company its talent, reduce its productivity, increase its security risk, and, They ultimately disrupt the success of an organization and its stock price.
In a global survey of 750 senior-level information and technology executives commissioned by DXC Leading Edge, a team of seasoned professionals creating progressive thought leadership focused on business transformation. The Embrace Modernization: From Technical Debt to Growth study advocates reframing technology debt from a problem that needs to be solved to something that needs to be addressed as part of any organization's modernization efforts.
According to the report, there is an accountability crisis when it comes to tech debt. Of the executives interviewed, 99% acknowledged that technology debt was a risk to their organizations, even though three in four still believe IT leadership should take sole responsibility for addressing it.
Michael Corcoran, global analytics and engineering leader, explained: "We are in a time where technological innovation is accelerating rapidly. The way we build, grow and enable our teams and customers is changing and with that, our approach Towards Managing the modernization process must, too. Sometimes the spread of technology debt throughout the organization makes it difficult for leaders to break away from their team's vision, and this is when a neutral third party can provide a holistic view that allows leaders to consider a new perspective. "If business leaders do not commit to addressing technology debt now, it will lead to a loss of resources, productivity and talent, and will have enormous security implications."
Lack of awareness among business leaders also has a significant impact on their ability to manage technical debt. Executives were clear that there are barriers to progress that hinder modernization efforts in their organizations; 47% of respondents rated knowledge barriers as very or extremely significant, and 38% rated cultural barriers.
DXC has found that organizations can experience 39% cost savings through reduced technical debt while retiring 37% of redundant applications and has therefore identified a four-step plan to pay off current debt and discourage it in the future:
1. Rethink organizational debt as modernization
Clearly articulating organizational debt is one way to ensure clarity of vision on the path to modernization. Changing your mind towards future focus is essential. This is an appropriate time for candid executive conversations as you take stock of what you have.
2. Define opportunities
The first step in defining modernization opportunities is to widen the circle beyond IT responsibility. The CIO and CTO will lead the modernization, but the entire executive team is responsible for its success. Coordination between the business side and the technical arm of the organization is crucial. CTOs and CIOs are uniquely positioned to communicate the organization's debt effectively to senior management and broader business stakeholders, with support from the CFO. Presenting the arguments clearly and convincingly to enable effective collaboration is the next step for these leaders.
3. Remove your barriers
Each industry has a unique profile, as does each organization. Therefore, removing organizational barriers is a matter of defining them in light of your inventory and Wardley Maps. Use your industry profile as a basis and modify it according to the needs of your organization.
4. Organize for execution
Having changed the conversation, defined barriers, and achieved alignment, an organization can focus on desired objectives and the impact of activities. Modernization is a continuous collaborative process that involves not only the IT circle but the entire organization. When done correctly, the benefits are felt throughout the organization. From cost savings to carbon reduction and making employees' work lives easier, there are business arguments that can be made in all branches of an organization. When organizational debt is clearly seen and fully articulated, it can be flattened, understood, and carefully managed as part of a healthy company's balance sheet.
"Technical debt is a persistent issue at the intersection of business and technology; it has been known for a long time, but is often poorly understood. As it continues to accumulate, organizations around the world cite it as a challenge important, inhibiting their ability to transform and serve their customers in the future," said Dave Reid, research director at DXC Leading Edge. "Today we are releasing our landmark study to help our customers and partners address this issue head-on and begin reaping the long-promised but elusive benefits of modernization and transformation."
In addition to the four ways organizations can pay off tech debt, DXC has introduced the Tech Debt Audit that business leaders can perform immediately to understand the level of tech debt in their organizations and where their barriers lie to addressing the debt. technological debt.
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In 2023, DXC Leading Edge conducted a survey of 750 global IT executives, with a CI (confidence interval) of 95%. The survey comprises a senior group of 50% CIO or CTO respondents; the other half are leaders at the VP level or above. The survey has a global scope and companies range in size from $1 billion to $10 billion or more in revenue. Respondents are widely distributed across industries: banking and capital markets; Sure; Aerospace and Defense; Technology, Media and Telecommunications; Travel, Transportation and Hospitality; Energy, Utilities, Oil and Gas; Health care; Automotive; Consumer and Retail Trade; and Public Sector.
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DXC Technology (NYSE: DXC) helps global enterprises run their mission-critical systems and operations while modernizing IT, optimizing data architectures, and ensuring security and scalability across public, private, and hybrid clouds. The world's largest businesses and public sector organizations trust DXC to implement services that drive new levels of performance, competitiveness and customer experience across their IT assets. Learn more about how we provide excellence to our clients and colleagues at DXC.com.
All statements contained in this press release that do not relate directly and exclusively to historical facts constitute "forward-looking statements." These statements represent current expectations and beliefs, and there can be no assurance that the results described in such statements will be achieved. Such statements are subject to numerous assumptions, risks, uncertainties and other factors that could cause actual results to differ materially from those described in such statements, many of which are beyond our control. For a written description of these factors, see the section titled "Risk Factors" in DXC's Annual Report on Form 10-K for the fiscal year ended March 31, 2023 and any updated information in subsequent filings. the SEC. There can be no assurance that any objectives or plans set forth in any forward-looking statements can or will be achieved, and readers are cautioned not to place undue reliance on such statements which speak only as of the date on which they are made. We undertake no obligation to update or release revisions to any forward-looking statements or to report any events or circumstances after the date of this report or to reflect the occurrence of unanticipated events, except as required by law.
Sean B. Pasternak, Corporate Media Relations, 1-647-975-7326, firstname.lastname@example.org; John Sweeney, Investor Relations, 1-980-315-3665, email@example.com
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