Henry Helgeson is an entrepreneur, investor, and CEO of BlueSnap, a global payment orchestration platform for B2B and B2C businesses.
As a business grows, it is natural to acquire new technologies that allow it to operate more efficiently, expand into new markets and generate additional revenue streams. However, over time, the volume of accumulated technologies can lead to increased maintenance costs and decreased agility, draining both human and monetary resources, commonly described as technical debt.
Technical debt inhibits a company’s ability to scale, innovate and deliver exceptional customer experiences. This is why 91% of recently surveyed CTOs cite technical debt as a major concern for their organization, outpacing cybersecurity threats and employee turnover. When companies with mounting technical debt are forced to manage the maze of back-office applications that often overlap and are sometimes outdated, the ability to invest in new technologies needed to drive the business forward is stalled.
Common Causes Of Technical Debt
Enterprises of all kinds operating across various industries accumulate technical debt in a number of ways. These are some of the most common:
• Too Many Integrations: Integrating with several different providers, systems and gateways as a means of accomplishing business goals adds to technical debt.
• Burdens Of Legacy Code: When software vendors fail to enhance or update their code, solutions become stale and outdated. The required maintenance contributes to debt.
• Bad Architecture: Internal technical teams code a solution and integrate it into the system only to discover it lacks the right design or isn’t sufficiently scalable. Rewriting, refactoring and maintaining it adds to debt.
• Unclear Business Requirements: A solution is created for a specific business need only for the requirements to change due to a lack of clear direction. Refining and updating it becomes costly.
• Failure To Keep Up With Innovation: Companies that fail to continuously keep pace with technology advancements will have outdated tech stacks in a matter of years. Accumulating legacy technology becomes a huge technical debt for organizations to manage.
Mismanaging Payments Can Escalate Technical Debt
Investments in payment systems, technologies and vendors are among the most common causes of escalating technical debt. Because the ability to accept payments is the lifeline for any business, companies tend to accumulate multiple payment vendors to meet their business needs. Doing so is often accompanied by unique financial, regulatory and security challenges. An exponential increase in technical debt can result, particularly when an enterprise:
• Enlists multiple providers, resulting in too many integrations and connections to gateways that must be managed and maintained.
• Selects a provider to meet an individual need, even though the provider has limited additional functionality.
• Must add additional payment vendors to support expansion into new geographic regions.
• Chooses a payment provider that does not have plugs into its back- or front-end systems, requiring technical teams to assume the burden of building integrations.
• Makes business decisions when selecting payment vendors and overlooks key technical factors.
How To Balance Growth And Technical Debt
Keeping technical debt at bay while investing in the payment technologies needed to support growth and expansion is a balancing act for any enterprise. Companies can manage this delicate dance in a few ways:
• Minimize the need for building integrations. Select providers that already offer integrations to existing CRM and ERP platforms as well as other front- or back-end systems, reducing the need for technical teams to build integrations.
• Support geographic expansion. Ensure providers offer payment methods and currency options in the locations and geographies the business operates in today and those it may expand into tomorrow.
• Prioritize peace of mind. Most businesses cannot endure even short-term interruptions to their ability to accept payments. Choose providers that offer comprehensive redundancy and failover, so the business does not have to acquire it on its own through secondary providers.
• Seek out innovators. Select vendors that have modern technology stacks and consistently innovate to enhance their offerings and introduce new, more advanced solutions.
• Retain right of refusal. No business should be negatively impacted when choosing not to adopt new functionality or take advantage of an upgrade. Ensure that new or enhanced features are backward compatible and are optional and easy to adopt.
• Budget and plan. All businesses building solutions, retaining solutions vendors and integrating with partners will have code and technology that need maintenance and refining. Budget and allocate resources each year to review the technology stack and make the necessary enhancements to keep it up-to-date and running properly.
Reaching new audiences and expanding into new geographic markets is critical for revenue growth. In doing so, however, global businesses often pursue quick fixes by continuing to add new vendors and systems. This drives up technical debt and creates a web of service providers that become difficult to manage. A forward-thinking strategy that considers technical debt implications when selecting vendors and partners can help companies acquire the necessary back-office and payment capabilities while keeping technical debt under control.
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