You might think “tech debt” involves your budget line item for upgrading your printers from the home version to the business version. Instead, it’s both more simple and complex than that. In general, “tech debt” happens when you choose a short-term solution that may be quick to implement but sub-optimal in the long term, as it may involve multiple systems, accommodations and employee time to fix them.
When employees returned to the office from the months or years locked in working from home (WFH), many found sad coffee cups, very lonely plants and their undying hatred of the office printer. With employees working from home, they may have lost the tolerance they had for the minor tech issues that your office worked on or around. But with a few months back to full office capacity, those tech issues may have your employees losing their minds. Financial advisory offices, like many small businesses, engage in similar mistakes leading to a tech debt. The good news is fixing tech debt may cost less than you think.
Making tech mistakes is nearly unavoidable when running a small business. But not all mistakes are equal. Some can limit your expansion. In a recent survey, small businesses said tech mistakes are one of the top reasons they struggle to expand. [1] Many of the common mistakes center around how and when a business backs up its data. This includes relying too heavily on the cloud, especially for backing up data instead of saving data to multiple places. Companies fail to back up regularly or appropriately and may lose important data, delaying operations or costing them clients. Relying too heavily on the Cloud can also cause congestion in your overall bandwidth, resulting in slow load times for employees. That in turn drives productivity down across the entire office. Other common mistakes, like failing to use adequate cybersecurity, are less annoying and more costly. Simple mistakes also involve failing to protect tech from natural disasters and issues involving the power supply.
Many tech experts are flummoxed by how often small businesses fail to take simple steps, like password protecting employees phones or using a remote wipe capability, in case a phone that is used for both business and personal use is compromised. Other similarly simple fixes include not protecting keeping confidential business information, like personal data or client lists, safe. Encryption around those areas can keep data breaches from becoming costly.
You might think “tech debt” involves your budget line item for upgrading your printers from the home version to the business version (another surprisingly common mistake small businesses make). Instead, it’s both more simple and more complex than that. Many experts noted that small businesses often fail to either upgrade their outsourced tech support or create opportunities for employees to get training on the technology they work with daily. That failure in training can create a tech debt – work arounds and miscommunications across departments and roles in your company. In general, “tech debt” happens when you choose a short-term solution that may be quick to implement but sub-optimal in the long term, as it may involve multiple systems, accommodations and employee time to fix them. “It adds enormous friction any time people need to coordinate work together across silos. There’s also the ongoing expense to exchange data between systems; the unquantifiable costs associated with being slowed down by your systems, whether you’re in the midst of digital transformation or responding to a competitor’s move; and the price you must eventually pay to redesign and simplify systems.”[2]
Tech debt that grows over time, as departments grow and tech users become defined less by individual people and more by roles and functions, usually creates communication problems. Multiple departments may use the same term in disparate ways. That can lead to databases producing inaccurate or unhelpful results. It can also lead to communication breakdowns between departments when databases used between groups can no longer “talk” to each other because of the workarounds or failure to predict a needed integration. This lack of communication is the biggest tech debt most small businesses face. It stymies growth and creates employee frustration.
The solution to this problem is to have a tech plan. Most small businesses do not engage in the kind of strategic planning around hardware and software integration that is needed to prevent tech debt. Tech experts suggest that you “map out your expected growth, and the IT resources you'll need to accommodate it in detail for the first year, and loosely for at least five years into the future. Include hardware, software, manpower and technical support. This will save you from being sidelined by upgrades you weren't expecting to need.” Experts further suggest ensuring that the tech plan be focused on roles, not people and define all terms, even ones that seem simple now. This kind of foresight can help businesses grow, ensure compliance and help reduce employee frustration.
[1] https://www.goto.com/blog/5-frequent-small-business-tech-mistakes#
[2] https://hbr.org/2021/12/effective-digital-transformation-relies-on-a-shared-language
These articles are prepared for general purposes and are not intended to provide advice or encourage specific behavior. Before taking any action, Advisors and Plan Sponsors should consult with their compliance, finance and legal teams.
Before leaping into the unknown, we recommend a thorough examination of your plan. Because we are experts in the field, we know the marketplace and know what your existing vendor is capable of offering. Through this examination, we can help you optimize the service you receive.
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