If you own, run or otherwise make key decisions for an organisation or business, take a few minutes to understand this existential threat.
This site is dedicated to exploring Enterprise Technical Debt , abbreviated to ETD, a concept which few have heard of, except in the City and Corporate boardrooms of the S500 where it is taken seriously.
Director's Briefing - Enterprise Technical Debt
Directors and executives are often approached about potential threats or risks which are nebulous or not quantifiable and sensibly spend no time on them until they become visible.
Enterprise Technical Debt is just the opposite. It is already present in organisations that depend on technology. It is measurable and predictable, with exact dates when risk escalates.
Despite this it is rarely presented to Board members in a coherent form or properly discussed, until recently. How much it matters to you and your organisation depends on the nature of the business, its ownership, attitude to risk and sensitivity to external factors such as regulation or reputational damage .
The Red Queen shook her head. "You may call it 'nonsense' if you like," she said, "but I've heard nonsense, compared with which that would be as sensible as a dictionary!" Through the Looking Glass
Do not be put off by the name, in depth knowledge of finance or technology is not required to understand ETD, only curiosity. Take the Whirlwind tour, it gives you all the essential ideas and only takes a minute or two.
If you feel the need to dig deeper to find out about ETD in your organisation, explore the 3 Big Questions challenge. Its free.
These allow you to create a view of ETD that is entirely tailored to your organisation. While the questions are easy to ask, the answers, you may find, are harder to come by. CrashesRUS case study gives insights and the Remedy section draws on real world lessons gained from working in this area here in the UK.
ETD - Just another acronym?
Likely this is one acronym that you have not heard of before.
Enterprise Technical Debt is not to be confused with its distant cousin, Technical Debt, a term much used in IT circles.
ETD is entirely different and is worthy of Board Room focus. Reason being is that if you have a lot of it - it can change the valuation of your organisation and how others view its long term viability.
Make no mistake it is a thing - and lessons described here are drawn from work done for major international and UK PLC companies.
Whirlwind Tour
ETD - What is it?
Since stone age man discarded used flints, we have to had to manage obsolescence and replace expended tools. So what's so special about Enterprise Technical Debt?
Legacy tech can work just as well as newer versions. However, once technology goes end of life, it can be difficult to fix, be more vulnerable to cyber-crime attack and face a scarcity of skills to run it effectively.
As long as these risks are kept under control, it's not too much of a problem. However as time passes layers of legacy tech can build up, creating an unseen pool of obsolescence. It's this accumulation of risks arising from continued use of out of date or otherwise obsolete technology that can come to a point where it threatens an organisation's core activity.
It is, in other words, a liability.
Not one that shows up in the End of Year Accounts of course, its usually invisible but one that, nevertheless, must be discharged. Hence the idea of a "silent pool of pending expenditure".
Those at the top of the company are often unaware of the true extent of this and it is rarely presented to them in a comprehensive long term view.
Why does it matter?
So why does it matter and to whom? Answer - because at some point, it will stop working and may be, can't be fixed for a reasonable price.
Perhaps you are your own boss and don't care. Others might be more concerned though. The likes of shareholders, private investors, trustees, creditors, trading partner, city analysts, private equity, banks. Let's not forget at the rear are cyber analysts, auditors and lastly, but not least. regulators.
If they think these hidden technology commitments are out of control they can judge them to be a financial black hole - in turn this affects valuation and even, opinions of long term viability. Someone in a city suit coined the term for this a" technology debt" and started using it as a marker of an organisation's health. It's a bit a vague, but the idea caught on.
So a more precise definition might be:
Enterprise Technical Debt - an accumulation of legacy and outdated technologies supporting critical activities for an organisation that threatens its prudent operation; requiring mitigation and hence recognition as a financial liability that must be met .
It is something that a well run organisation should have under control, or at least understand. Like the legendary iceberg that sank the Titanic, the true danger sits below the waterline.
Is ETD a Scaremonger's invention?
It's late 2026, the UK's Air Traffic Control body, NATS are back in the news, following another outage. An article in The Times about this also reveals that according to a source "..Britain’s air traffic system risks being “unfixable” if it breaks down from 2030, raising the spectre of a days-long paralysis of the nation’s commercial airspace.
The core flight processor for all the UK’s “enroute systems” — which manages any aircraft entering UK airspace — will be “unsupported” from 2030.
One source at Nats, the air traffic control service, likened the situation to having a piece of kit for which “the manufacturer is no longer around and parts and knowledge aren’t available. If it works, fine, but when it breaks, it’s gone.”
This does of course make great news copy to frighten readers of the Sunday Papers, but in itself is not too surprising given the niche requirements of ATC systems, which may only totally replaced only once or twice in half a century. It is, however, classic ETD in action - thank goodness NATS have a plan, although The Times goes on to say: "NATS Chief Executive Martin Rolfe has compared upgrading the software to "trying to change the wheels on an F1 car while driving down the home straight at full speed". Because it is safety-critical national infrastructure, it cannot simply be turned off to install updates." Oh dear, sounds like this changeover might be tricky.
Chances are your organisation is not responsible for activities as safety critical as the ones that NATS carries out , so is ETD still relevant? Let's try looking at a more everyday example.
We start with a company called LetsGetPaid that is in the business of making payments on behalf of clients, and is successful with several hundred accounts and over a thousand payment runs each month. It uses a once state of art but now little used database and mid range platform for processing, The original vendor of this product have long ceased trading and its product set now belongs to Megacorp where it sits in its back catalogue, with a small but loyal following; a mix of corporate and government clients. Problems with this system are rare and the in-house team deal with them in almost every case.
Out of the blue, the system freezes, no warnings, no errors - for hours on end. A pattern that repeats over many days. The inhouse team are baffled and contact Megacorp for support; their teams prove ineffectual and lacking in product expertise.
Outsourced payments carry stringent conditions, penalties for missed deliveries and the right of audit if services falter, so by now this IT problem is becoming a serious business issue, that may result in losses and significant reputational damage if not contained. Business continuity plans are dusted off.
In desperation, access to the core product development team is requested, and declined by Megacorp. Global CEO to CEO contacts take place and a phone call with the group in California arranged. The meeting does not go well, instead of using one big database for payment servicing, it turns out that as it grew LetsGetPaid created one for each client, so by now are running up to 1000 separate instances all at once on their single platform, a scenario never imagined or tested by Megacorp. The developers are appalled and refuse to diagnose or support such a scenario.
End of story - well not quite. Back at base, it is noticed that the freeze comes on late morning just before lunch. Inquiries show that office staff have decided to hoard the day's batch items and set them off all at once and then take an extended lunch break, creating the computer equivalent of Mr Bean and several other people trying to pass through a narrow doorway at the same time, with inevitable comical results. After shouting at the humans involved, normal service resumes.
All good you might say, but looked at through the lens of Enterprise Technical Debt, there are red flags everywhere. The outdated platform used for a critical business process, over reliance on the competence of the inhouse team, weak support and indifference from Megacorp, the mad architecture of system itself, lack of resilience and understanding of the consequences of even a small disruption. Worst of all, there is no plan to mitigate these issues or to replace the core system at the time of this incident. LetsGetPaid is content to milk the cow but not invest in the future of the farm. Quod erat demonstrandum ETD.
If it's a Thing, Lets fix it!
ETD is measurable both in terms of size and impact - with some homework its size and impact can be quantified. Even better, product life spans follow their maker's schedule, so it's possible to predict exactly when exposure will increase beyond accepted limits. Easy then, to do just that and make fixing it a routine matter, that can be planned in advance.
Few risks or threats are so convenient! You might think? Actually, many well run companies do just the opposite and ignore these risks. Exactly why they do this is a conundrum, but you can avoid this mistake and have the courage to ask 3 Big Questions to reveal all before it is too late.
Listen closely to the answers your experts give - ideally with your nonsense detector head on. Do they stack up? Is detail missing? Persist!
If you have got this far, you may need to decide what to do next. The CrashesRUS case study offers insights into how these topics might surface in a real life setting and there is detailed guidance in the Remedy section.
What's behind this Pitch then?
By now, you may be thinking this content is some sort of sales ploy for one of the big tech companies - it isn't.
Or possibly a lure for a mega consulting firm, such as McKinleys or Delights. No, not for them either.
For 9 out of 10 people, you can learn enough from this site to get on with solving this problem, if indeed it needs it, without further assistance.
If you are an exception, then raise issues on Moot or alternatively, contact us direct: info@techdebtprime.com and we can see what we can do to help.
That's it. No huge PowerPoint slide-fests or suave lunches with partner types (sorry) - just all you need to know, with no padding.