CIOs: Stop Spending on Bad Tech

US IT departments waste $85B yearly on bad tech. Chief information officers must assess their tech stack to prevent deeper debt and the potential added cost of attrition.

Prasad Ramakrishnan, SVP of IT and CIO, Freshworks

September 1, 2022

4 Min Read
money pit abstract like a black hole with money sinking in
Mikhail Tolstoy via Alamy Stock

The time for digital transformation has come and gone, but some organizations still lag. A successful transformation means having the right resources -- money and talent -- in place. As US IT departments continue to hemorrhage money trying to upkeep broken systems, the time is now for IT leaders to think about how to prepare for an inevitable economic slowdown while facing tremendous tech debt and a lack of the right talent to dig them out from it.

Stop Cutting Corners

It’s a vicious cycle. Rather than going to the core of the problem and replacing technology, companies cut corners by working around (or even reworking) bad code and poorly designed software. While it may seem that they are saving a few bucks in the short-term, the fact is they’re losing money -- and doing so year after year.

A recent study from Stripe and Harris Poll found the average developer spends 42% of their time dealing with technical debt and maintenance issues, of which 3.8 hours are spent just on debugging “bad code” that’s difficult to maintain. The cost of bad code doesn’t come cheap -- IT departments choose to spend $85 billion annually on salvaging bad tech rather than building or buying better software.

While it’s easy to say that all of the blame falls on bad choices and budgetary issues, a severe lack of necessary talent digs the hole deeper.

Hire the Right People (and Let Them Do Their Jobs)

We’re all tired of feeling the impact from the Great Resignation, but the fact is it left many tech companies and IT departments high and dry. While talent shortage is a global issue, in the case of solving US tech debt a shortage of software developers and engineers for hire leaves those with jobs being misused and left to tend to projects focused on keeping toxic legacy systems in place. If correctly deployed, a report by Stripe shows that this niche talent pool could actually add $3 trillion to global gross domestic product (GDP) over the next several years.

For various reasons ranging from lack of access to training, to experienced workers suffering from burnout, a major shortage of skilled workers is in full swing. According to the Bureau of Labor Statistics, the software engineer shortage in the US will increase to almost 1.2 million by 2026 -- an alarming statistic for an industry already billions in debt.

If You Can’t Build It, Buy It

While spending more after already spending so much to no avail might seem daunting, knowing when to let go can save big dollars in the long run. While the more well-known business software solutions come with a hefty price tag and a team of consultants to get you off the ground, not all solutions are equal. Shop around -- the solutions you need are out there. Audit what you have, what you use, and take notice of the features you don’t use. Not only can this save money upfront on the software itself, but buying an easy-to-try, buy, and use solution might help ease attrition. A recent report shows that out of 9,000 employees surveyed in different industries across the globe, a whopping nine in 10 are frustrated by their workplace technology – and almost half are considering changing jobs.

Strategize for Success

Planning for the future is a must -- and having the software developers and engineers at the strategic planning table is crucial. Including your frontline workers will help ensure you have the right product road map, and the right people and tech for the long term. Not only will a strategy focused on the future rather than just the now decrease future tech debt, but it may also save you from employee turnover. If you don’t waste your developers’ time, they’ll get back to doing the jobs they’re supposed to do -- and want to do.

As the digital transformation continues, it is time for IT departments to give employees what they need -- the right tools, the right team and the autonomy to do what they need to increase productivity and fill in the hole from tech debt.

About the Author(s)

Prasad Ramakrishnan

SVP of IT and CIO, Freshworks

Prasad Ramakrishnan is SVP of IT and CIO for Freshworks Inc. (NASDAQ: FRSH), a software company empowering the people who power businesses. At Freshworks, Prasad leads the company’s IT vision, strategy, and execution. A seasoned IT professional, SaaS evangelist and go-to thought leader on all things cloud and security, Prasad’s expertise is critical to the success of Freshworks products as well as global work culture. He spearheaded the company’s sustained connectivity in response to the pandemic.

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