Global enterprises are facing an ever greater challenge when dealing with their complex legacy IT architectures. Complexity leads to a higher level of risk and can also create barriers to the adoption of new technologies. This article looks at technical debt and how it can be addressed.
The increased infrastructure complexity of many global IT organizations is often due to a combination of acquisitions, globalization and the addition of new products and services. This often leads to a significant amount of technical debt comprising a network of poorly integrated and at some times redundant systems. Many banks end up persisting with these outdated services even though they may only support a small customer base or a niche service.
Moving from a fragmented patchwork of disparate systems and services to a more unified or connected IT framework has a number of business benefits, with improved operational resilience alone potentially justifying the risk and cost of enterprise level technological change.
Financial services face particular challenges when trying to update and rationalize their IT architecture because they have a finite capacity for change which is primarily consumed by regulatory, cost reduction and revenue enhancing agendas. Architectural rationalization often has to be addressed on a piecemeal basis and off the back of other change delivery rather than a dedicated program of change.
Accepting that this situation exists, the challenge is ensuring that there is a coherent understanding of the risks associated with the technical debt and its relative importance for attracting investment. Without this, technical debt can impede the implementation of new services and ultimately the realization of value.
It is very unlikely that any organization will invest materially in enterprise level rationalization. That is why it is critical that enterprise architecture functions can clearly articulate a target position and inform a continuous path of course correction, ensuring the incremental resolution of technical debt.