Identify the Impact of Technical Debt on Government Department/Agency IT Operations

Manage technical debt for enhanced government IT performance.

EXECUTIVE BRIEF

Analyst Perspective

Manage technical debt to better govern risk.

The concept of "technical debt" refers to the future costs incurred when an organization decides to implement quick – and often suboptimal – solutions instead of the best overall strategy. Within the realm of government department and agency IT operations, understanding and effectively managing technical debt is crucial for providing efficient, secure, and resilient services. As technological advancement continues at an unprecedented pace, including the development of AI systems, failure to address technical debt can lead to serious operational impairment, escalated costs, and compromised operational security. Digital transformation is necessary to address governments’ constant pursuit of high standards of operational efficacy and public service.

The consequences of technical debt on government IT operations go beyond the financial. Technical debt can significantly inhibit citizen service delivery, diminishing public trust. Given that digital transformation, automation, and AI services are not just desirable but essential, government systems and processes must be contemporary and flexible enough to adapt to technological advancements.

This report aims to highlight the impact of technical debt within the federal IT environment, providing deep insights into managing and mitigating these challenges to enable informed decision making for more sustainable and efficient IT operations. Exploring this topic further will help organizations form strategies to ensure long-term sustainability and the continued delivery of reliable and robust public services.

Paul Chernousov
Research Director, Industry
Info-Tech Research Group

Executive Summary

Effective communication will enable effective technical debt governance.

Technical debt is a type of technical risk, which in turn is operational risk. IT should be a trusted advisor to leaders making risk management decisions, communicating both the level of risk and options to manage it. The final decision to accept or mitigate technical debt rests with departments and agencies.

Subject relevance

"Like all debt, technical debt is bad because the process of satisfying it actually prevents efforts to eliminate it. In a sense, the government is paying off the interest on its technical debt by maintaining legacy and aging systems, with nothing left over to purchase new systems that would be much more efficient and less labor-intensive overall."

– John Breeden II in Nextgov/FCW

Understanding technical debt in the digital age

Today’s technical debt is the inevitable consequence of the ongoing development and maintenance of software systems within federal departments and agencies. The rapid evolution of technology and the increasing reliance on digital platforms for delivering public services have made it crucial to understand and manage technical debt. To reiterate: "technical debt" is the future cost of refactoring and improving software systems that were implemented with quick yet suboptimal solutions. Failure to properly manage technical debt can lead to inefficient systems that are difficult to maintain and upgrade, posing significant challenges in a fast-paced technological environment.

Impact on efficiency and budget in the current fiscal climate

Given the complexity of the fiscal climate, unaddressed technical debt can reduce efficiency and increase costs for federal departments and agencies. Governments are often pressured to do more with less, and the burden of growing technical debt can exacerbate this challenge. This not only compromises the overall efficiency of departments and agencies but can also significantly drain resources. Every dollar spent on development may generate up to five dollars in future costs if technical debt is not effectively managed, making it critical to address this issue today.

Technological modernization and adaptability amid rapid technological change

Given rapid technological advancement and recent developments in AI, managing technical debt is more important than ever to ensure the modernization and adaptability of government technology infrastructure. Unaddressed technical debt can severely limit an agency's ability to adapt to new technologies or implement innovative solutions and can make digital transformation a slow and expensive process. For federal governments, managing technical debt is a critical and urgent step toward enhancing public service delivery and achieving strategic objectives in the digital era.

Technical debt impact on federal departments and agencies

Examples and key insights

US Department of Labor: If departmental technology is inefficient, outdated, or poses a security risk, the department can’t effectively deliver on its mission, leaving citizens at risk of losing access to critical resources and protections. Source: U.S. Department of Labor Blog, 2022.

The General Services Administration warned agencies about technical debt as far back as 2015, calling it the "‘hidden’ costs associated with a system’s architecture and codebase (for example, changing requirements addressed with a ‘quick fix,’ bugs deferred in favor of new development, design weaknesses, or aging third-party libraries)." Source: GSA.

Employment and Social Development Canada: Technical debt reduced the ability to implement policy quickly (e.g. employment insurance takes 6 to 18 months to prepare, test, and launch). Maintenance and upgrade costs became unsustainable, client experience became fragmented, service delivery was jeopardized, and opportunities for processing efficiencies became limited. Source: Employment and Social Development Canada.

US Defense Department: The accumulation of older software and infrastructure required a substantial amount of budget and resources to maintain, which constrained innovation. The DoD has only recently retired eight-inch floppy disks in favor of modern computer capabilities, aiming to address modern threats by accelerating the modernization of systems that rely on older technology. Source: C4ISRNET.

Impact of technical debt on digital transformation

Slower innovation

Technical debt can consume resources and developer time, constraining the development of new features and technologies. Departments and agencies might find themselves falling behind in the digital transformation race, unable to keep up with the pace of technological advancements.

Increased cost of change

High levels of technical debt can make software changes more costly and time consuming, as developers must navigate complex, poorly documented, or outdated code. This lengthens lead times for implementing digital transformation initiatives and increases costs from additional labor and potential system downtime.

Risk of system failures and security vulnerabilities

Technical debt often leads to more frequent bugs and system failures, which can disrupt digital transformation efforts. Outdated or poorly designed systems can be more vulnerable to security threats, posing data integrity and cybersecurity risks during a digital transformation.

The cost of technical debt

The growing pace of federal IT spending

• US federal departments and agencies spend nearly $100 billion every year on their IT needs, but a significant portion of that money goes to maintaining legacy systems (GAO, 2021).
• In 2015, 75% of the US federal IT budget was consumed by operating and maintaining legacy equipment, leaving just 25% for new technology investment (GAO, 2016).
• 80% of US federal departments and agencies report that technical debt limits their ability to augment or modify existing legacy systems, including moving to the cloud (TechTarget, 2020).
• In Canada, over 40% of the public sector struggles to combine next-generation and older technology systems, which continues to generate technical debt and increase maintenance costs (Financial Post, 2023).
• 31% of Canadian government agencies felt that technical debt accounted for 25% to 50% of total full-time employee time; 25% felt it accounted for 25% to 50% of total operational budget (IDC, 2023).
• The UK public sector spent nearly half of its 2019 annual £4.7 billion (US$5.76 billion) IT budget on keeping-the-lights-on activities for outdated systems (National Technology News, 2021).

+11%

The United States earmarked $10.9 billion for federal civilian cybersecurity capabilities in 2023, also an 11% increase from 2022 (SC Media, 2022).

+11%

The US federal IT budget for 2023 is $65 billion, an 11% increase from 2022 (The White House, 2023).

Challenges of moving away from technical debt

Budgetary and administrative constraints

1. High Maintenance Costs

   The tendency to prioritize operating and maintaining legacy equipment has not improved as much as needed over the years, with most of the US government’s IT budget going toward maintaining its aging systems. Little remains to invest in new and more efficient systems.

2. Limited Ability to Change Legacy Systems

   Many departments and agencies lack the necessary funding and staff to update and patch their aging IT infrastructure, which makes it difficult to manage vulnerabilities.

3. Challenges of Modernization and Security at Scale

   Some federal departments, like the US Air Force, face a unique challenge of managing modernization and security across a large global footprint of facilities. This necessitates careful upgrades and a focus on interoperability to ensure data is available when needed.

4. Underfunding and Understaffing

   Given the challenges with attracting IT cyber talent to work in government, underfunding has limited resources to address technical debt, while understaffing has led to a lack of expertise in addressing technical debt.

How long does it take to address technical debt?

The specific time frame for reducing technical debt can vary widely, depending on the size of the department or agency, the complexity and amount of the technical debt, the available resources, and other factors.

• Immigration, Refugees and Citizenship Canada (IRCC) is tackling its technical debt through a multiyear digital platform modernization program that will gradually replace its legacy Global Case Management System (GCMS) with a new digital platform. The program has three phases: Stabilize, Standardize, and Enhance. The length of each phase has not yet been determined.
• In the US, the Legacy IT Reduction Act of 2022 is being developed. This bill addresses the problem of legacy IT used by the federal government. Specifically, each federal agency must:
  • Compile an inventory that lists each legacy IT system used, operated, or maintained by the agency.
  • Within two years of enactment and every five years after, develop & include a plan to modernize legacy IT systems as per the agency's information resource management strategic plan.

Technical debt in public service

Case Study

INDUSTRY: Public Service
SOURCE: The IT University of Copenhagen, Denmark

Stakeholder influence on technical debt management in the public sector

The technical debt lifecycle

Tackle a mountain of technical debt

• Technical debt describes the result of avoided costs that cause ongoing financial impact. Technical debt creates friction for IT and other employee groups, frustrates citizen service users, and limits organizational flexibility, innovation drive, and resilience, eroding the value of services offered by departments and agencies.
• Most organizations have a significant and growing technical debt portfolio.
• Left unaddressed, technical debt becomes an existential risk to an organization’s ability to effectively compete and serve its customers. Organizations that fail to properly manage their technical debt will have a significant disadvantage.
• As an IT leader, your role is to help the organization better understand the risks introduced by technical debt, and to recognize its ongoing financial impact and the options available to address it. This enables leaders to make better decisions about paying back or holding onto technical debt.

"Poor management of technical debt hamstrings companies’ ability to compete."

Source: McKinsey Digital, 2020

Technical debt is expensive and difficult to manage

1. Resolving/minimizing the impact of aging systems is considered IT’s problem, even if IT lacks resources or authority to make necessary changes.
2. Deferred project work is pushed over to operations, sometimes with little visibility or hand-off, where it gets deprioritized and lost.
3. The effort of keeping legacy systems stable, patched, and updated drains time away from longer-term planning exercises.
4. While leaders are often aware that aging systems prevent the full value of service provision from being realized, they don’t greenlight fixes due to other more urgent priorities, or because IT isn’t staffed well enough to deliver an effective solution in a reasonable time frame.
5. Building a case to address technical debt can be challenging because technical problems are complex and difficult to translate into operational impact.
6. A well-intentioned effort to track every technical debt will fail. Track only the technical debt you intend to fix. It’s better to live with some technical debt than to create more.

25%

On average, respondents said that 25% of their development time went toward technical debt management activities

but,

93%

93% of respondents had no way to systematically track and manage the technical debt that was absorbing all that time.

Source: Science of Computer Programming, 2018

The time factor in technical debt

Technical debt accumulates when teams rush to deliver services without proper planning and design. A major source of this pressure is the need to deal with unexpected issues. It can also come from requests that are nonstandard or that require more resources than anticipated.

29%

Less than one-third of all IT projects finish on time.

Source: Capterra, 2016

200%

One in six of these projects have average cost overruns of 200% and time overruns of 70%.

Source: Harvard Business Review, 2011

80%

Research shows that over 80% of IT workers feel they are burning out.

Source: Small Business Trends, 2019

Provide better citizen services by effectively managing your technical debt

IT Benefits

• Manage the disorder created by technical debt to deliver more reliable, available, and serviceable IT systems and applications.
• Conduct a holistic analysis of your organization’s technical debt to identify the debt generating unacceptable operational impacts.
• Identify options to reduce technical debt and use your technical debt operational impact analysis to make the case for funding and resources.
• Build a technical debt register to monitor its presence in your environment.

Operational Benefits

• Identify strategic solutions to replace or manage legacy technology that will enable the organizational flexibility and resilience required to deliver the best value for the taxpayer.
• Make better resource allocation decisions with better information on the cost of deferred IT maintenance.

Insight summary

Three key steps enable effective technical debt governance.

Technical debt can, and should, be actively governed in a way that delivers durable value to the organization. Every organization must identify, measure, and manage their technical debt to govern it effectively.

Focus on solving the problems you need to address.

Don’t make your technical debt assessment a philosophical exercise, a confessional booth, or an appeal for sympathy. Do this exercise because you have a problem that must be better understood to be fixed.

Analyzing technical debt only has value when the analysis can help the organization and its IT make better risk management and resource allocation decisions. It is a tool to help you get where you need to be, not an end-in-itself.

Use a comprehensive and more-objective impact analysis.

Consider direct costs, but also assess the long-term effects on your organization:

• Dissatisfied citizens, burnt-out staff, or eroded external partner goodwill
• Limited flexibility and resilience
• Health, safety, and compliance impacts

Use more-objective measures to track subjective impact. For example, consider the number of clients who could be significantly affected by each technical debt in the next quarter.

Accepted, not ignored.

Not every technical debt in your environment can (or should) be immediately addressed. A decision by the organization to avoid addressing it now means the organization accepts the risk. This can be an appropriate and acceptable outcome.

Of course, the debt doesn’t vanish by itself. Track your remaining technical debt and the options available to mitigate or address the risks associated with it.

Manage technical debt

Blueprint deliverables

Each step of this blueprint is accompanied by supporting deliverables to help you accomplish your goals:

Technical Debt Impact Analysis Tool for Government IT

Document technical debts, create an impact scoring scale, and assess the impact of each technical debt on your department or agency.

Roadmap Tool for Government IT

Document action items and projects to address technical debt. Estimate risk reduction, effort, and cost. Create a visual roadmap.

Key deliverable:

Technical Debt Executive Summary Presentation for Government IT

Communicate the risk of technical debt and approaches to address it to an executive audience with this simple and slick overview template.

Analyze technical debt to inform your modernization strategy

Chart a path to the future that accounts for the constraints of today.

• Major modernization initiatives, including digital transformation, can enable tremendous value, but technical debt can prevent structural and truly transformative changes.
• Old technology may not enable the capabilities and functionality required to digitize internal and external processes.
• Use a modernization strategy to make the case for eliminating technical debt.
• The constraints introduced by technical debt on modernization are a type of impact. Use this blueprint to estimate and communicate the impact of technical debt as an obstacle to modernization and inform your modernization strategy with that analysis.

Key Info-Tech Modernization Blueprints:

Modernize Your Applications

Build a Strategic Infrastructure Roadmap

Modernize Data Architecture

Info-Tech offers various levels of support to best suit your needs

DIY Toolkit

"Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful."

Guided Implementation

"Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track."

Workshop

"We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place."

Consulting

"Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project."

Diagnostics and consistent frameworks are used throughout all four options.

Guided Implementation

What does a typical GI on this topic look like?

A Guided Implementation (GI) is a series of calls with an Info-Tech analyst to help implement our best practices in your organization.

A typical GI is 6 to 10 calls over the course of 3 to 6 months.

Workshop Overview

Contact your account representative for more information.
workshops@infotech.com 1-888-670-8889

Phase 1

Identify Your Technical Debt

Phase 1

1.1 Define technical debt

1.2 Identify technical debt in your environment

This phase will guide you through the following activities:

Define, identify, and organize your technical debt in preparation for the technical debt impact analysis.

This phase involves the following participants:

• Technical Debt Exercise Facilitator
• IT Management
• IT Subject Matter Experts (SMEs)

Optional:

• Key stakeholders

Step 1.1

Define technical debt

Phase 1

Identify Your Technical Debt

1.1 Define technical debt

1.2 Identify technical debt in your environment

This phase will guide you through the following activities:

• Review Info-Tech’s definition of technical debt.
• Understand the roles that IT and the organization play in proper technical debt management.
• Discuss your organization’s technical debt risk and how you currently manage it.

This phase involves the following participants:

• Technical Debt Exercise Facilitator
• IT Management
• IT Subject Matter Experts (SMEs)

Optional:

• Key stakeholders

Insights & Outcomes

Develop a shared working understanding of the technical debt metaphor and discuss how the concept applies in your IT environment.