Technical and digital debt series:
How does digital debt affect localization companies’ ability to compete?

Technical and digital debt series:
How does digital debt affect localization companies’ ability to compete?

Technical and digital debt series:
How does digital debt affect localization companies’ ability to compete?
1920 1465 Bartosz Budzynski

In this four-part series, we discuss the similar yet distinct terms of technical debt and digital debt. We’ll talk about what they are, and why they’re a problem, not just for IT teams or those selling software, but also for organizations in the language industry.

In our previous posts, we discussed what technical debt is and why it’s an issue, and presented ideas on how to reduce and minimize technical debt levels. In this post, we’re going to discuss digital debt. We’ll talk about what it is, what causes it, and why it’s a problem.

What is digital debt?

Digital debt is the result of not addressing a digital problem properly from the outset. This means businesses don’t achieve the required level of digital transformation. Some define it as “the accumulation of processes, data, and systems that have evolved over the years to create a situation where a change of any type is costly and or difficult”. As opposed to technical debt, which relates to code, digital debt relates to the use (or non-use) of digital channels and systems. Let’s use an example to make things clearer.

Say there’s an LSP, we’ll call them Localize Surprise, that relies on three main software systems: a decades-old project management system, an off-the-shelf accounting software package that’s slightly newer, and Outlook 365 for emails. The only one of these systems that’s in the cloud is Outlook 365. This means that when they work remotely, staff need to use a VPN to connect to their computers and the software back at the office, which is often slow and sometimes has connectivity issues.

Their in-house IT team manages the project management software and has written code that pulls data from the PM system to the accounting software at month-end. Each time the accounting software releases a new version, they need to implement a patch or fix the code to make everything work again – at best-causing delays, and at worst, causing outages. Updating one or all systems has been floated several times. But so much time and money have been invested into getting these systems to work, that those holding the purse strings are hesitant.

Localize Surprise’s project managers have to regularly check both systems and their email to answer client and vendor queries and check the status of payments or projects. The company’s senior management team doesn’t have clear oversight of their financials at any one time since data is only updated monthly. They also can’t track trends or changes in key metrics such as acceptance rates of quotes or language pairs and specializations. Now we’ve set the scene, let’s consider the problems this poses.

What’s the problem with digital debt?

Digital debt is a big issue for the localization industry. In fact, many may unwittingly have been complaining about digital debt for years… just by another name. Because if you’re talking outdated, clunky systems, inefficient processes, and workflows, then chances are, you’re talking about some level of digital debt.

If we return to our Localize Surprise example, the most obvious drawback to this setup is that it’s time-consuming. As a result, staff may not be able to deliver projects, respond to client quotes or queries as fast as their competitors, who are working more efficiently. Since senior management doesn’t have a clear overview of their business, they can’t easily spot and tackle problems or identify trends to capitalize on. They don’t have accurate up-to-date data on their financial situation, making it hard to make appropriate strategic decisions. What’s more, these legacy systems become harder and harder to update or evolve.

All this means that companies like Localize Surprise really can’t scale, let alone innovate. And ultimately, they’re no longer competitive. In other words, they lose their market position, and the cost of bringing their systems and processes up to scratch is significant and continues to increase. In short, digital debt hinders business success.

 

Keep your eyes peeled for the next post in this series,
which will address how you can reduce your levels of digital debt.

Bartosz Budzynski

Responsible for Professional Services at XTRF. A strong supporter of the open-source movement, sharing economy enthusiast, and a passionate developer. His greatest superpower is transforming business needs into technical requirements.

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