Dive brief:
- The rapid rise of artificial intelligence is deepening the complexity of information technology landscapes, setting many companies up for a “tsunami” of technical debt in 2025 and beyond, according to research firm Forrester.
- More than 50 percent of technology decision makers will see their technical debt rise to a “moderate or high level of severity” by 2025, and that number is expected to reach 75 percent by 2026, Forrester predicted in a recent report. Technical debt refers to the costs incurred to postpone technology upgrades or modernization.
- “There is a massive amount of technical debt in IT infrastructure,” Forrester principal analyst Carlos Casanova said in an interview. “It’s really this perfect storm of growing technology, companies being much more distributed, and AI coming into the equation, which is going to make the problem exponentially worse.”
Diving knowledge:
The research highlights the growing challenges companies must overcome as they rush to adopt AI and avoid falling behind competitors.
“CFOs should lead the charge to address the company’s accumulated technical debt,” said consulting firm Protiviti in a 2023 report, noting that organizations spend an average of 30% of their IT budgets and invest a fifth of its IT HR in technical debt. management
AI tools, including the generative variety, are now the biggest contributors to tech debt alongside business applications, according to a report released last month by Accenture. In the US alone, technology debt costs $2.41 trillion annually, the report said, citing 2022 figures from the Consortium for Information and Software Quality.
The trend is likely to accelerate as 52% of organizations plan to allocate more funds to generative AI by 2025, Accenture said.
“Generative AI is leading to a classic catch-22,” according to the consultancy. “On the one hand, it is generating new technical debt. On the other hand, when used appropriately, generative artificial intelligence can help manage the correction of technological debt, as well as minimize the creation of technological debt.”
Technical debt is the result of a number of practices, such as making temporary solutions that inevitably become permanent, not updating solutions that become obsolete, favoring rapid delivery of technology over long-term benefits, or implementing one-off solutions to meet business priorities, according to McKinsey analysts. he said in an article last year.
“Many of these decisions make sense at the time and are necessary,” they wrote. “But the complexity increases and future projects become more difficult. This downward spiral results in a huge cost to the business in the form of lost opportunities and wasted resources.”
AI is only exacerbating the problem, according to the Accenture report. Among other obstacles, some companies have platforms that were built with human interactions in mind and are not ideal for many generative AI implementations today, he said.
