But debt doesn’t just relate to the minus symbol appearing with alarming regularity in your company’s accounts. It’s just as easy for your business to slip into technical and technological debt too.

‘Technical debt’ refers to the use of hardware and software that is obsolete and which can’t be upgraded to the latest versions. When an organisation is in technical debt, it’s the beginning of the process of their competitors leaving them behind in a cloud of dust.

This form of debt happens when companies choose an easy software or hardware option to fulfil an immediate need as a ‘quick fix’ rather than implementing a more appropriate, longer-term solution.

But this line of thought brings issues with it. Like financial debt, technical debt accumulates interest – only in this case, the interest is the difficulty in updating systems and processes as time goes on. The more short-term solutions are bolted on to your company’s infrastructure, the harder it is to make the longer-term changes when they’re needed. The ‘interest payments’ to the Bank of Technical Debt are the necessary rounds of maintenance that will need to be completed just to keep things ticking over.

A series of ongoing changes to systems will soon make the overall infrastructure outdated. Similarly, if there’s insufficient definition of what’s needed in a change to a system or a process and development begins before the design has been finalised, it’s more than likely that the new solution will need to be reworked in some way later on down the line.

There are reasons beyond mere negligence that an unfinalized design might be rushed through to implementation. The business may be under pressure to compete with other firms in the same sector meaning that even just a vaguely competent solution will be deemed acceptable if it keeps the company in the marketplace.

Alternatively, financial pressures might mean that a company doesn’t have access to a comprehensive test suite, meaning that the process goes live without every why, what, and wherefore being scrutinised in the most minute detail.

And if a piece of software is put into place without appropriate documentation, this piece of work will also need to be completed so that the software can be understood in years to come by new starters and others unfamiliar with the circumstances that led to its creation. This need for relevant documentation, and the creation of it, is considered technical debt as well.

All of these situations point towards the consequences of a technical design or development that’s been conceived and put in place with a short-term benefit but with no regard for its long-term future.

You wouldn’t write suboptimal code solely to meet a deadline, with the knowledge it would have to be rewritten to make it maintainable in future. The same principle should be applied here.

A good managed IT service provider (MSP) will help you mitigate the risks of technical debt by consistently analysing your systems and processes and offering straightforward, practical advice on how and when they need to be upgraded. Then, the only area of your company that will need to deal with debt will be Accounts – unlike the whole business when technical debt is an issue.