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Accruing ecommerce technical debt can slow down your organization–companies underequipped from a technology standpoint are crippled as they try to acquire new customers and expand.
In our most recent webinar, “How to Reduce Ecommerce Technical ‘Debt’ and Maintain a Great Customer Experience,” our experts from FTD, Alvarez & Marsal, commercetools and Capgemini discussed their experiences in dealing with paying down technical debt and replacing decaying, insufficient infrastructure with systems built to last.
What we learned:
- What is Tech Debt
- Types of Tech Debt
- Sources of Tech Debt
- How To Pay Down Technical Debt
- How to See What’s Going Wrong & What to Do
We also polled our community to see what their self-reported top struggles were in improving the user experience for their customers and talked about how to overcome these barriers with our panelists. The top three were: the team was at capacity, creative couldn’t keep up, and the technology couldn’t support it.
Read the other top takeaways from this webinar below and watch the full replay here.
- Matt Powell, CTO at FTD
- Michelle Garvey, Senior Advisor at Alvarez & Marsal
- Kelly Goetsch, Chief Strategy Officer at commercetools
- Richard Minns, Group Commerce CTO at Capgemini
- Moderated by Scott Silverman, Co-Founder at CommerceNext
What Is Technical Debt?
Technical debt is the equivalent of regular financial debt but focused on software or other technologies that you use to build your businesses’ infrastructure. Ward Cunningham, who coined the term ‘tech debt’ says the following about it: “With borrowed money, you can do something sooner than you might otherwise. But then until you pay back that money you’ll be paying interest… I thought that rushing software out the door to get some experience with it was a good idea…but then, of course, you would eventually go back and as you learned things about that software you would repay that loan by refactoring the program.”
We can all relate to the universal experience of trial and error—whether it’s building your infrastructure or project management. This can create problems with the way your business operates, and operating at suboptimal capacity creates constant revenue loss. Combined with the cost of labor to institute the temporary solutions necessary to bridge your old and interim processes with your new practices, the economic reality of technical debt is indisputable.
Types of Technical Debt
Technical debt comes in many forms. Building the wrong architecture, hiring the wrong people, instituting the wrong processes, leaving behind a sloppy trail of documentation, writing poor code or using inadequate tools can all create technical debt resulting in inefficiency and double the work. As with all debt though there’s good and bad debt. When considering both the technical debt your organization taken on and in considering the debt you may accrue–what category does your debt fall into?
Goestch compared technical debt to building a house. You can build a house to last for 500 years out of great materials or you can build a house out of cardboard that will collapse in a month. The same reasoning applies to your IT structure. For example, going live with a project or service a bit early because of a time-sensitive opportunity is an example of good technical debt. Duct taping a process, meanwhile, in order to facelift your organization before a PE sale or to make headlines for shareholders can is bad technical debt. This same problem can occur with individual interest at stake as a manager may institute patchwork solutions to boost their quarterly numbers to that they can move onto another role. This is why it’s essential to align company incentives to drive actual growth and hire people that are committed to building systems made to last.
Major Sources of Technical Debt
There’s a good medium between instituting the optimal process the first time and executing the fastest, cheapest option. In the process of building your IT structure, you can’t have it all and there are powerful financial forces that constrain companies to making bad choices.
Some of the most common forms of bad tech debt:
- Having your sales and marketing go up before your product
- Hiring too many low-skill developers—instead, hire fewer high-skill developers
- Building something that is easily purchased from a 3rd party vendor—building your own shopping cart, DNS, etc. instead of using low cost options in the market wastes your money but deprives you of the opportunity to miss out on B2B customer support
Other sources of technical debt can come from the “move fast and break things” mentality, common to Silicon Valley. When new leadership is brought in, there’s immense pressure from investors to deliver quick wins and implement changes on timelines so tight that the team is unable to properly document and risk-test these solutions. Lack of long-term ownership also creates a problem, such as when an empire-building employee takes a short stint at a company to springboard their career, maximizing their personal results in exchange for the overall growth of the company.
How to Pay Down Technical Debt
- Create a shared vocabulary. Make sure your marketing and business partners understand why tech debt is an important problem to discuss and how it can be quantified. If you need to use a short-term shipping solution today your team should be having a conversation not only on the cost of each solution but the cost of switching over, the cost of the expected period of supply chain disruption and the hours required to establish a relationship/agreement with the new company. Acknowledge the full scope of the costs of each choice to allow your company to make more informed decisions in the future that reduce tech debt.
- Budget for the resolution of your debt. Our panelists shared their experiences with budgeting: when Commercetools experienced issues with logging, monitoring and data infrastructure, they had to spend time rebuilding that infrastructure and now spend about 5% of their time servicing tech debt. Alvarez & Marsal recommends dedicating 10-20% of company time to resolving technical debt, though it will depend on the lifecycle stage of your business.
- Create an ownership mentality within your organization. When a company retains talent and employees are responsible for the debt that they create, they tend not to create as much debt. Low turnover requires fair treatment of employees, enjoyable work opportunities, and room for growth though so in order to create this mentality companies need to mind their work conditions.