How smart businesses manage tech debt risks

The cost of acquiring platforms and services to help boost business performance will often trigger something known as “tech debt.” Simply put, it is the cost of keeping pace with innovation. Tech debt isn’t a threat by itself. But especially for small businesses, failing to manage it can be ruinous.

Tech debt takes many forms. It can be spending borrowed funds on anticipated AI technology needs. It can be the cost of working with outdated technology or suboptimal services. It can even take the form of lost opportunities.

Forward-thinking entrepreneurs understand and manage their tech debt with careful planning, monitoring and oversight. Also critical is clarity about the principle involved — do you know the size of your tech debt and if it can be effectively controlled as your IT needs grow?

A great unknown at the moment is the impact of AI. While costs will be substantial on businesses of every size, small businesses especially will be hard-pressed to keep pace with advances in generative and agentic AI.

Platforms, software and network connectivity all require substantial boosts to keep up with data demand. So do training, file updating and maintenance. 

The magnitude of AI can be daunting. But solutions are not out of reach. Accenture reports: “The same technologies that are contributing to tech debt — AI and generative AI — are also powerful tools for managing it.”

Other tools can help manage your business’s tech debt. The broader use of cloud services requires investments in cloud connectivity tools. At the same time, the advantage gained in access to such tools offers smart business leaders' immediate opportunities for value enhancement. 

Managed correctly, tech debt works like that. In some cases, it is spent on opportunities to improve a company with technology down the road. In other cases, tech debt is being spent on cybersecurity needs as data breaches grow in size and complexity. For small businesses, especially, someone should be assigned to monitor this kind of spending and ensure the right balance is kept.

KPMG notes: “Your goal is to work around the tolerable debt and get rid of the toxic.”

Another source of relief from tech debt is the involvement of managed service providers. The right partner can provide small business owners and IT leaders with several critical things:

Expertise: The right industry and technology understanding to keep tech spend where it needs to be.

Scalability: The ability to grow as an expanding business needs to do more.

Equipment upgrades: Letting the managed services provider take care of your upgrade needs and avoid sharp capex spend with a monthly fee.