78% of organizations have accrued more technical debt during the pandemic, says new Software AG Research

- However 58% have no formal strategy for managing it

- Companies have been more open to accruing technical debt during the pandemic in order to act more quickly

Software AG (Frankfurt MDAX: SOW) today announced the results of a new global survey, revealing that 78% of organizations have taken on greater levels of technical debt in the last year. The annual Situation Report surveyed over 700 IT decision makers from the U.S., U.K., Germany and France, and shows that global IT professionals feel that technical debt plays an important role in their digital transformation efforts. They also have a greater acceptance of it now, because of the pandemic.

During these unprecedented times nearly nine in 10 (88%) organizations say that the pandemic has made them more aware of technical debt, with 83% saying that they are now more open to accruing it. Technical debt is defined as coding or development that is left undone or unfinished at the time that the application/platform goes live.

Accruing technical debt can help organizations quickly solve challenges around efficiency or operational procedures, as well as capitalize on opportunities to win new customers or capture new markets. As a result, 94% of organizations believe that technical debt is an important part of their transformation strategy, allowing them to launch products and services faster and capitalize on market opportunities.

Despite its importance, and even though 82% say they can assess all or most of their technical debt, more than half (58%) do not have a formal strategy for managing it. This will become a crucial issue in the future as two thirds (69%) fear that technical debt could slow down their transformation progress.

Sanjay Brahmawar, CEO, Software AG commented: “The pandemic has dramatically accelerated many things when it comes to technology and transformation. Technical debt is just one of them. Organizations that are resilient, digital and connected are well positioned to use technical debt positively, to become more agile and responsive to customers, employees and market conditions. Connected infrastructure and digital culture are going to be crucial, which is why becoming a truly connected enterprise has to be a high priority for every organization.”

Managing Technical Debt

The research shows that data and processes existing in silos is the top challenge to paying off technical debt. A lack of internal alignment is also cited amongst the top challenges – showing that both technological and cultural progress needs to be made to turn technical debt into the positive phenomenon that it can be.

Some technical debt is intentional. For instance, nearly all (95%) who accrued it by implementing hybrid/remote working say it’s a ‘good debt.’ Additionally, most (86%) believe that being able to launch new products and/or services makes it worth accruing technical debt. More than nine in 10 say technical debt is important to their transformation strategy (94%), their growth strategy (93%), or their business culture (90%).

Other technical debt is unintended, for example 44% of companies say it simply built up over time as their infrastructure became more complex. For this kind of debt, companies need to try and look into the future. For example, how customers may come to expect blended experience journeys; how automation may grow within the organization; or how external factors, such as sustainability initiatives or skills shortages might change the nature of business.

To learn more about the role technical debt plays in organizations’ digital transformation, read the Reality Check 2022 whitepaper. To read more about Software AG’s research, view the Situation Report 2022.

About Software AG

Software AG is the software pioneer of a truly connected world. Since 1969, it has helped 10,000+ organizations use software to connect people, departments, systems and devices. Software AG empowers truly connected enterprises using integration & APIs, IoT & analytics and business & IT transformation. Software AG’s products establish a fluid flow of data that allows everything and everyone to work together. The company has more than 4,700 employees across more than 70 countries and annual revenue of over €800m, with the aim of exceeding €1bn by 2023.

For more information, visit www.softwareag.com or follow on LinkedIn and Twitter.

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