Your Technical Debt Clock is Ticking
Right now, technical debt is silently killing companies like yours. On the surface, everything appears fine, but cut corners, temporary fixes and antiquated technology beneath create a hazard that can paralyze operations. Is your company among those at risk?
Any decision, intentional or not, to go with a short-term fix while neglecting to consider the larger negative long-term consequences, puts an enterprise at risk of creating technical debt. It's not that different to neglecting the worn brake pads on your car. Over time, the problem compounds and before you know it you're faced with a bigger problem and more costly repair.
The technical debt clock in the back office is ticking. With insufficient IT investment, coupled with increasing investor expectations, heightened regulation and global expansion, the levels of technical debt in the back office are at an all-time high. Deferred upgrades and fixes can cost you ten-fold down the line due to a lack of responsiveness and productivity. Once you start losing customers to the debt, it's already too late—you're irrelevant. The next crisis-driven requirement could just be the one that ends your business.
A two-digit oversight caused the greatest surge of technical debt creation in history: Y2K. A tiny computer bug first uncovered in the 1960s caused mass chaos almost 40 years later. Without immediate corrective action, the issue multiplied and cost the U.S. government and companies an estimated $100 billion to fix.
To avoid a technical debt crisis, the fund industry needs to look for the two telltale signs: excuses for manual process and short sightedness. Is your company avoiding automation because it's too expensive, you don't have the time or think it can wait? Can you explain how investors will interact with fund managers five years from now? If you can't envision it now, you're not going to be able to implement it later—the pace of change is too rapid to play catch-up.
Don't wait until the next crisis or regulatory mandate to update your fund technology; the modernization of your back office can differentiate your business. Identify sources of technical debt now and start chipping away at them. You don't have to fix every little issue; evaluate each debt based on the cost, future risk and ROI. Your business depends on it.