Last updated on February 1st, 2018 at 07:30 am
Enterprises that grow by acquisition find themselves acquiring the technological assets of the organizations they acquire. And most enterprises acquire technological assets by other means as well. In either case, the contract negotiation teams need technical knowledge to evaluate and project the effects of these acquisitions on total enterprise technical debt. But as total enterprise technical debt grows, the capacity of enterprise technologists to support new contract negotiations declines, which leads to a self-sustaining cycle of technical knowledge deficits. Policymakers and strategic planners are likely the most effective possible advocates for breaking the cycle by hiring more technologists.
Negotiating contracts with vendors that provide outsourcing services or subcontracting work, or with organizations to be acquired, requires a sophisticated appreciation of the technical debt status of the assets acquired or to be acquired. The technical debt in question includes more than just the debt borne by the asset as it stands in its pre-acquisition context. It also includes the debt that the asset will carry after it’s inserted into the asset portfolio of the acquiring enterprise.
These two debts — pre-acquisition and post-acquisition — can differ, because the interfaces, standards, and approaches of the acquiring organization likely differ from those prevailing within the vendor organization or the acquired organization. Knowledge of the interfaces, standards, and approaches of both parties to the transaction is therefore required to make a valid assessment of the total post-acquisition levels of technical debt.
The enterprise negotiation team therefore requires the services of technologists who are familiar with the maintenance, extension, and cybersecurity work that will be performed on the acquired assets post-acquisition. When the technical debt situation in the enterprise reaches a level so serious that it requires the full attention of all available technologists, they cannot be spared for negotiating contracts. If this happens, then contract negotiation teams could experience a deficit of knowledge concerning the consequences of acquiring assets laden with technical debt. That leads to increasing levels of non-strategic technical debt, which then has the potential to exacerbate the technical knowledge deficit for the negotiating teams.
This situation is an example of what’s commonly called a vicious cycle. After technical debt has reached a critical level, there are really only two tactics that can break the cycle — get more engineers, or suspend some work.
Other posts in this thread
- Non-technical precursors of non-strategic technical debt
- Failure to communicate long-term business strategy
- Failure to communicate the technical debt concept
- Technological communication risk
- Team composition volatility
- The Dunning-Kruger effect can lead to technical debt
- How performance management systems can contribute to technical debt
- Zero tolerance and work-to-rule deliveries create an adversarial culture
- Stovepiping can lead to technical debt
- Unrealistic definition of done
- Separating responsibility for maintenance and acquisition
- The fundamental attribution error
- Feature bias: unbalanced concern for capability vs. sustainability
- Unrealistic optimism: the planning fallacy and the n-person prisoner’s dilemma
- Confirmation bias and technical debt
- How outsourcing leads to increasing technical debt
- How budget depletion leads to technical debt
- Contract restrictions can lead to technical debt
- Organizational psychopathy: career advancement by surfing the debt tsunami
- The Tragedy of the Commons is a distraction
- The Broken Windows theory of technical debt is broken
- Malfeasance can be a source of technical debt