Points Every CFO Must Know While Dealing With Technology Debt


When you hold the post of a CFO, you are held responsible for formulating the investment strategy of your firm. The investment area mostly circle around an organization through technology. Most of the time, CFO relies on CIO for understanding the real meaning of technology. However, it is the duty of every CFO to get a full understanding of the technology debt, revolving around the firm. It further helps in guiding the organization effectively, for gaining prominent financial success. Therefore, from the points mentioned above, it can be well stated that in a debt-ridden sector, it is vital for CFO to know more about technology debt and features.

Areas dealing with technical debt

The first place, where you are going to find about technology debt is the software development procedure of your firm. You can consider this debt to be the work, before any particular job can be termed as proper or complete. In case, you fail to repay the debt, it might start accumulating more interest rates than what you have imagined, and it makes future changes next to impossible for your firm. Therefore, it is recommended to get the problems solved by ensure that the interest rates in technology debt never get the chance to score high here.

Another area to find technology debt

There is another expensive area, where you are about to find technology debt. This platform is primarily termed as hardware, software, development costs and support, which are used for supporting systems, which the companies term as end of life system. You can replace such systems, if the need arises, and can further write off as sunk cost, for a longer span of time. Being a CFO of your firm, it is your duty to identify such systems by noting its time consuming and high cost projects. The sole value of such changes is to stay back in this business.

Get set to identify business

There are various modes, which you must have for identifying the business. You can identify the systems by just identifying the projects, they hold. These projects might fall short drastically of the benefits, it once promised during business cases. The cost overrun takes place due to project queue or costs, required by systems for making this project a huge success. However, the CFOs might also have to keep a note of their credit history. If they ever come across any problem, they can always rely on credit card loan consolidation, for some immediate help.

Difference between good and bad technology debt

As similar as finance, good technology debt helps in increasing the net worth and generate value. It further helps in managing finances in an effective manner. On the other hand, the bad technology debt is that kind of service, which does not help in increasing market share or revenue with no lasting value on the present decreasing costs. It might not help in improving the ability of your company for make the market grow faster on some of the future endeavors. A CFO needs to be aware of this sector for some help now.


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