Technical data

What is innovation debt?

Innovation debt and technical debt result not evaluate and improve system and platform capabilities. In recent years, the government has improved in resolving technical debt. All levels of government are making investments to eliminate technical risk; however, these investments are often made with the dreaded “like for the same” view. When governments simply upgrade “as-is,” they miss the opportunity to deliver new service improvements to customers: elected officials, citizens, residents, constituents, employees. “Like for like” creates a vacuum in innovation and even negates the possibility of having the conversation to pursue system upgrades and achieve innovation at the same time.

There are a few reasons we need to address for innovation debt:

The Changing Value Proposition of IT: In some organizations, IT has always been seen as a required service or a necessary evil. But the COVID-19 pandemic has changed that perspective and demonstrated the strength, flexibility, and resilience of IT to their respective organizations. IT has become an agile provider and service enabler in a new and dynamic era. CIOs cannot back down from this new position. We need to capitalize on it. We are now seen as innovators and we need to keep moving forward.


Unlocking the value of subscription model services (including as a service): The market for many IT products has shifted to subscription-based services (this is also very much in line with the government trend to leverage the as-a-service model whenever possible). The impetus for this change dates back to the 2008 recession, when vendors lost revenue as organizations cut maintenance payments to stay solvent. The subscription-based model was developed to allow providers to have a consistent, annual revenue stream. The service-based model creates a risk for governments because they lose the ability to reduce costs when needed without also reducing or removing services. However, there is a silver lining: subscription services are evergreen platforms where maintenance costs and technical debt are removed. Subscription services also drive innovation as upgrades come with new product features that can bring new value to business operations.

The rapid pace of technology change: For platforms that are not consumed as a service or as a subscription, IT faces another dilemma: the rapid pace of technological change. In recent years, technology vendors have brought innovation to market faster than ever. Failing to review and evaluate these new offerings weakens the value proposition of IT and the innovation it can bring. Innovation debt will grow faster than ever due to new market forces. If no action is taken, not only will the cost of future upgrades increase, but the amount of changes will be enormous. Large-scale major implementations are always more difficult than small pieces.

HOW DO YOU MEASURE INNOVATION DEBT?

There are two ways to measure innovation debt. The first requires you to understand the risk portfolio of your technology stack. In Oakland County, Michigan, we use Tech Debt Check, our technical debt measurement app. This tool raises the question of the age of the application. If an application is more than seven years old, it is identified as an application, technology or service with high innovation debt. The efforts of the master plan can then be dimensioned to respond to this concern.

The second method relates to your organizational approach to adopting service-as-a-service or subscription-based models. If you implement a model as a service but don’t have an innovation or continuous improvement effort, you’re creating waste. In Oakland County, we have continuous improvement plans for our Office 365, GIS, and Okta platforms (to name a few) and will follow the same plan for Workday. This is the future of the IT business model.

THE OPPORTUNITY COST OF INNOVATION DEBT

Innovation debt can have a substantial impact on the reputation of computing. Failure to address innovation debt will create real barriers to organizational progress. Moreover, CIOs will not be able to meet the needs of citizens in the way they expect from the private sector. Governments are starting to be held to the same standards as businesses when it comes to citizen engagement (and remember, our business partners will have the same expectations).

Consider these opportunity cost factors:

Transformation and automation of business processes: Business process transformation is key to improving profitability. Leveraging technology to automate non-value added tasks is key to saving money and improving citizen experience. Carrying innovation debt makes business process transformation difficult, if not impossible.

Artificial intelligence and machine learning: These emerging technologies are integrated into solutions every day. The problem is that governments don’t use them because the apps and services aren’t maintained. These technologies are becoming easier to use and may not require the unique skills previously needed to get them off the ground.

Security enhancements and response: Security threats are becoming more complex every day. The ability to react and react is essential. We have learned from recent incidents that new technologies are easier to protect and fix than older systems. Innovation debt is a force multiplier in the inability to respond effectively to a security event.

Information-based architecture: Information, which is nothing more than meaningful data, is the raison d’etre of any system. Modern systems design focuses on information-based design. This design principle facilitates the use of artificial intelligence, machine learning, improved security, transparency of public data, and the use of enterprise conversational technologies. Not removing innovation debt will increase costs when it comes to information-centric architecture.

EJ Widun is chief technology officer for Oakland County, Michigan.