We recently wrote that a website, or any other kind of software (and this is especially applicable to your bookkeeping software) is best thought of as an investment in your business. And because it’s an investment, it’s best not to think in terms of simply driving the cost down to zero — as you would if it were simply a cost centre for your business — but instead to think in terms of the return that your money and time, if invested wisely, could generate.
The finance analogy is helpful in other ways too, and a big one is understanding technical debt.
What Is Technical Debt?
Almost all software contains some level of trade-off between the best solution available for a given problem, and the most readily available (and implementable) solution.
These trade-offs impose some form of cost on the future of a project. It might mean some parts are not done in the best way, it may lack important functionality, or perhaps the software/vendor does not address future industry challenges.
That’s technical debt. The “good-enough” choices made now will weigh on the future of your business as your needs change—
Why Does it Matter?
Unlike real debt, if you never need to make further changes you never have to pay back your technical debt— This is part of the reason why so much existing business software is decades old: people can still live with it if they hold their breath and squint, and nobody wants to pay down the debt of improving it.
But the moment you want to make any change, you’re forced to face down that debt. This may mean quite a few unpleasant things:
- A natural tendency for decision makers and financial controllers to want to defer the debt for as long as possible (possibly despite adverse business impacts)
- Consultants will likely tell you that the changes you want to make require far more time and complexity than you were expecting.
- Consultants may start advocating strongly that you throw everything out and start over, for reasons you find hard to fathom.
- The changes may introduce challenges within your business in terms of Organisational Change
How Can I Avoid It?
Failure to appreciate technical debt is one of the most common mistakes owners make.
It’s important to establish though, that technical debt is impossible to avoid entirely. No one in 2006 knew they’d have to design their websites for iPhones, for example—nor was that even possible at the time. Any software/website/technology that is operating in your business untouched since 2006 is likely drowning in technical debt.
However, there are many steps you can take to prevent taking on unnecessary technical debt, and to manage technical debt as it arises:
Engage good consultants and keep your finances on green numbers
You should seek to engage consultants who are conspicuously good at their jobs, because those are the people who know the right ways to do things and won’t take shortcuts.If you are having issues with your GDPR or are unsure if you have the correct set-up then we highly recommend a team of GDPR consultants in the UK who offer a brilliant service and have helped several businesses that we know of.
Telling who those people are isn’t always easy, but it is certainly possible; MYOB have a great article on the 5 signs of a great bookkeeper (that includes some universal concepts you can apply to a consultant in most industries)
You need clear steps to take to make your business as strong and smart as possible. Equipment financing, debt restructuring, revolver credit, and appraisals – for these four points you need to get a professional able to provide the tools that keep your company’s finances thriving… As a personal advice I suggest you to check for faster and reliable solutions with a professional from Equify Financial, they will listen to your story and make informed decisions from there. Whether you’re just getting started or you need someone to have the faith to give you a second chance, you’ll be treated with the respect and consideration you need to get things done.
Begin with the End in Mind
If you’ve got a clear sense of vision (and you should!), build with that in mind. Let’s say you like to engage with your customers through Facebook and someday you’d like to blog to build your authority in your niche, or perhaps sell your products online. Using a platform like WordPress that can expand to facilitate all of these requirements will save you time and money over the duration – reducing your technical debt.
Does your bookkeeping software support your point of sale, job scheduling or inventory needs? The right system could, but the wrong could leave you, your staff and your bookkeeper/accountant performing a range of inefficient and costly activities for years to come. That’s technical debt.
Stay Away from Quick-Fixes
A good consultant will in most cases address this for you, but it also requires your engagement. Insist on doing things right. If you aren’t sure what bookkeeping software is right for you, don’t just walk into Harvey Norman and ask the salesman for whatever is in stock. They don’t know how to use the software, they don’t know the real world pros and cons, and they don’t know how this is applicable to your business goals and challenges. That’s technical debt, and there is a right way to do it. Get more information here at https://www.testingtimeblog.com/different-types-of-loans/.
Don’t let your knowledge and systems get out of date.
- If you use WordPress for your website or blog, stay on top of updates to themes, plugins, and the WordPress core. Maintain your social media accounts and online directory listings.
- Consider moving to cloud based services to alleviate the burdens of managing updates and backups, as well as (sometimes significant) upfront costs. There are amazing solutions available for all manner of services ranging from bookkeeping software and point of sale, through to document management and collaboration.
- If you are responsible for maintaining your own systems, ensure you are installing vendor updates and patches. While many address security and bugs or add new features, some (such as MYOB payroll updates) could affect your legislated responsibilities.
- Ensure that you and your staff undertake regular training, follow blogs, attend webinars or participate in forums to ensure you know how to get the most out of your investment.
Some updates can get painful or potentially disruptive, but you will have to face that pain sometime, and you’ll incur greater costs as things decay further into obsolescence. So find a good consultant and bite the bullet!
While there is no doubt that information technology can be an amazing enabler for business, technical debt is one of the most important (and often underappreciated) truths.
If you would like to discuss your own situation, why not contact the team at Business Wise, and if you’re interested in learning more about technical debt, much of it is discussed very well in this video: