6 Ways to Manage Your Technology Stack: The Big Impact of Small Decisions

In present times, managing tech infrastructure efficiently can create a competitive advantage. Every company has to make three vital decisions on the technology front:

• Upgrade its Legacy Systems
• Maintain Newly Incorporated Technology
• Make winning bet on New technologies

Over time, every business develops friction originating from old and outdated systems that make integrating new technology and capabilities prohibitively costly. McKinsey, in its research, draws an interesting parallel between financial debt and the cost of managing technology infrastructure, which it calls Tech Debt. Tech debt is simply the off-balance-sheet accumulation of all the technology work a company needs to do in the future.

Competition on Two Fronts

Each company is competing on two fronts:

• Effectiveness of its new tech solutions that solve emerging business challenges
• And management of its digital infrastructure.

A successful digital product may help generate revenue but the company may be hemorrhaging cash on legacy systems and other fronts that soon create enough friction to hamper productivity and agility. A holistic view of technology is vital. Poor management creates tech debt that hamstrings organizational ability to compete. Technology expenditure has two components:

Productive Investments are the actual investment in a new technology stack, legacy upgrades, maintenance, compliance, bespoke software investments, etc.

Unproductive Expenditures are the complexity tax, the cost of friction that prohibits a company’s productivity and efficiency. It is a leak in the tech budget. For instance, efforts on harmonizing nonstandard data, managing silos, fragile point-to-point or batch data integrations, large expenditure on integrations, etc., are costs a company would like to avoid.

Creating Competitive Advantage From Technology Management

Investing more in technology, investing in the right technology, and managing legacy can create competitive advantages. Hence even the challenge of managing technology can help build a competitive leg up.

For detailed insights into each trend, read the blog.