- Jon Evans
(TechCrunch, Columnist)
Technology X-Ray

What is Technical Bankruptcy? To understand Technical Bankruptcy we need to understand Technical Debt. Many of us have gone into debt whether for a home, car, college, or to take a vacation. Debt isn’t necessarily a bad tool. It’s when you cannot repay the debt, that you run into trouble. Many have to file for bankruptcy and lose the home or car they can no longer afford. Technology Debt acts in the same way. A young company may need to go into some Technical Debt to launch and get up and running. As long as the company continues to pay for the debt, operate without revenue loss, and are working on getting out of the Technical Debt the company continues to thrive. However, if the business growth out paces the ability to pay for the debt the company will face Technology Bankruptcy. Like losing your home or car you may lose your business.

What does this mean to you? Technical Debt can be from poor system design, software architecture or fast, unorganized software development, simply put Bad Code. If not addressed it will remain a growing concern and can be felt in the lack of system stability, scalability, revenue growth and even the end of a company. We have found companies facing Technology Bankruptcy experience a few very similar issues.

  1. They notice the software they use needs constant attention and repair to do 50% of what it was promised to do. They are paying people to fix the technology which should never be breaking and losing money in the process.
  2. They find themselves running manual processes, which could be automated.

    i.e. A spreadsheet used to track customer data sales that’s updated several times a day and then passed around. They are lacking automation and losing money in the process
  3. They often find themselves at the mercy of software changes. Changes, which take an inappropriate amount of time.

    i.e. When changing the location of a button can cascade into breaking six other things. In other words they are lacking a solid platform and losing money in the process.