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The Extended Enterprise: Outside Help for SMBs Managing Technical Debt

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The Extended Enterprise: Outside Help for SMBs Managing Technical Debt

2020 has brought business leaders challenges, undercutting established business plans and negating processes and practices leaders have developed and relied on for the health and success of their business. The pandemic and resulting economic disruption have taken a toll on all businesses, but especially small and medium-sized businesses (SMBs), which typically do not have the resources available to large enterprises.

In this environment, technology is a double-edged sword, presenting an existential threat and, at the same time, an opportunity to reevaluate and reposition a business for competition in a changing world. Size and agility can work in favor of the SMB that is not burdened with entrenched technology permeating processes spread across many functional areas.

Repositioning a business will mean developing new capabilities. But, just as important is reevaluating, reprioritizing, and purging obsolete, dysfunctional infrastructure and systems that no longer move the business in the desired direction at the right cost and proper speed. This means managing technical debt in a business. Technical debt, or Tech Debt, is similar to financial debt, but paying it down drains internal resources as opposed to paying interest and principal to a bank. Tech Debt costs business time, project funding, staff turnover, and competitive standing. It can accumulate silently and become a threat to the future of a business.

Staying on top of Tech Debt is especially difficult for SMBs that might not have the technology departments, CIOs, and CTOs of larger organizations. However, a successful campaign to manage Tech Debt can benefit from the assistance and guidance of outside resources that can extend your enterprise. Assessment of technology currently used by a business can best be accomplished by an independent party who is not influenced by past history, the pride of ownership, or a protectionist bias.

A substantial portion of infrastructure and applications adopted by businesses in the last ten years and earlier is obsolete, functionality insufficient, or supported at costs far out of proportion to the benefits provided. Servers, storage systems, some proprietary network, and communications equipment, proprietary applications systems for the back office, customer relations, sales, and email have all evolved to alternative solutions that are cloud-based, shared, secure, on-demand, off-premise, and third-party supported.

Independent, experienced firms and individuals with no interest in promoting any one solution are poised to provide their expertise to help SMBs differentiate real technology advances from technology-of-the day solutions. They have years of experience working in finance and technology with large and small companies and have helped develop technology management strategies that position these businesses for the future.

These resources represent a continuing trend in today’s workplace. The gig economy provides super temps and experienced executives who have left corporate positions and become greypeneurs. They provide not only fractional services as traditional consultants but also often as virtual CIOs, CFOs, or CTOs, available on-demand to fill these roles for SMBs and help manage technology investment and technology strategies for the future. 49 percent of self-employed workers are baby boomers who want to share their important life experiences and give back to businesses, especially SMBs, that appeal to their natural inclination toward independence and self-reliance.

Another path open to SMBs addressing Tech Debt is collaboration. There can be substantial value in a collective approach to addressing shared issues. Collaboration opportunities come in a variety of forms and have different advantages. User groups foster collaboration among similar organizations sharing a particular technology or even a particular brand or product. These groups can exert a powerful influence on the evolution and future direction of technology. Industry sectors have broader, collaborative trade associations that address issues shared by businesses in that sector. Geographically structured organizations such as regional chambers of commerce provide forums to inform and educate business leaders, promoting cross-pollination and the sharing of ideas. A unique benefit of such organizations is the insight they provide to businesses confronting new issues or adopting technology early on, helping the community foresee issues and emerging trends. Collaboration allows an SMB to monitor competitive businesses and benchmark key performance indicators, including the variables that contribute to Tech Debt.

Today’s constraints on small and medium-sized businesses provide some advantages over established larger businesses heavily invested in the past and with the large internal staff needed to support processes and practices that have evolved over time. These larger companies are feeling pressure to look more like SMBs. “The prevalence of lean management teams, the post-recession drive to cap costs, and the accelerating pace of change combine to make temporary solutions compelling,” as authors Jody Greenstone Miller and Matt Miller observe in their Harvard Business Review article, “The Rise of the Supertemp.” Extending the SMB enterprise through judicious use of external resources can be an effective and efficient means to manage Tech Debt and prepare for the future health and resilience of the business.

 

Here are some pointers to help when enlisting the assistance of external resources:

  • An independent perspective is a big advantage in assessing the state of an organization. Use a combination of internal knowledge and outside perspective to evaluate the infrastructure, systems, processes, staff, and technology investment strategy of the business.
  • Know the people, services, and expertise level available to your business. Consider outsourcing non-core competencies and infrastructure components. Prepare for and use the shared and scalable cloud resources to limit capital and operating expenses.
  • Become familiar with fractional expertise resources–virtual C-suite staff. Consider their use on major tech projects, investment planning, M&A due diligence, and more.
  • Develop and use collaboration strategies with an ecosystem of providers, advisors, organizations, and partners.
  • Lastly, value the resources that serve you the way you would have your customers value you. Do not underestimate the ability and willingness of people to understand and address your issues.

Michael C. Fillios is the founder and CEO of the IT Ally Institute, a nonprofit organization providing small and medium-sized businesses (SMBs) access to knowledge, research, and practical tools to improve their tech bottom line. A senior global business and technology executive with more than 25 years of experience in IT, finance, operations management, and change leadership, he lives in Mason, Ohio. Learn more at www.itallyinstitute.org.

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