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What No One Tells You About Technology Debt


Do you remember Stanley, the Lending Tree Guy? If not, below you will find the video from the 90's to refresh your memory:

While you may not be in financial debt like Stanley at your organization, you may be in similar form of debt, Technology debt, which is the topic we want to discuss today. In this article, I explain what technology debt is and the side effects of not addressing it in your nonprofit.

The Impact on Technology Debt

For over the last decade, I have been in the business of providing technology solutions for nonprofits. And, in that window of time, we have had many conversations with clients about Technology Debt and the impact it has on the mission of an organization.

What is Technology Debt?

Technology debt entails not keeping your infrastructure on the latest and greatest version provided by your software vendors. For example, when you apply standard Microsoft updates and patches on Tuesday night, you’re paying the debt. When you upgrade to the latest version of your Association Management Software, you’re paying the debt. When you renew your subscription to your Social Media provider, your’ paying the debt.

In the last 5 years, we have all been witness (participant) of the huge paradigm shift in how organizations deploy and maintain software. In essence, we have moved from the "On Premise" methodology to the "Cloud Software" as the prevailing means by which nonprofit associations deploy and utilize software today.

The Impact of Technology Debt Payments:

  • No Integration: An unsupported infrastructure will likely not integrate with other systems

  • Frustration: Not paying your debt will increase frustration by your staff and members

  • Pain: Debt paid incrementally is easier than waiting 10 years

  • Lack of Service: By not keeping up with your debt, you will limit your ability to provide the necessary services to your members. Ex. Is your web site responsive? Is your database PCI compliant?

  • Costly Upgrades: With Technology debt, you likely are forced to make costly customizations which will impact your ability to upgrade if and when you decide to do so.

A Few Software Cloud Benefits:

  • Quick Release: The "Cloud" multi-tenant software allows associations to stay current as technology evolves and changes. The "Cloud" quick release cycle builds in your software updates.

  • Stay Current: The "Cloud" eliminates the propensity for organizations to get behind with technology (assuming the vendor is keeping up). You have no "choice" to delay.

  • Cash Flow: No more lump sums upfront. "Cloud" based solutions is that your organization can pay incrementally over the life of your subscription.

Because of our history with many leading CRM and Association Membership Systems, we have many organizations using "On Premise" solutions which they have not upgraded/enhanced/or fixed for years (and in some cases over a decade).

In some cases, Nonprofit Executives argue, proudly claim they have saved thousands of dollars by not participating. Or, they make the claim that by not paying for Association Nonprofit Management Software Updates they avoided the pains of an upgrade. If you're accomplishing your mission with your current software system (or your system has an update that will) then these statements couldn't be farther from the truth!

Benefits of Staying Current:

If you are still using an "On Premise" solution, many software for nonprofits provide a Software Update Plan (Maintenance Plan). It’s optional, but don’t make the mistake of thinking you avoid the debt, you don’t!

  • Protection: You assure the organization of optimizing your system for peak performance while also protecting it against future technology changes (in and outside the code).

  • Mitigate Risk: You will know your organization is protected against downtime and incompatibility issues when an operating system or software is upgraded. Ex. PCI standards.

  • Manage Costs: Your organization will control the expenses by providing a predictable cost of ownership you can rely on and budget for. You will jeopardize the use of your system by avoiding major upgrades every 5 to 7 years. In fact, it will likely be a complete shock to know that you have to pay one lump sum rather than the incremental payments in a regular plan.

  • Grow Revenue: With new technologies, you are more likely to be afforded new tools which will increase engagement and membership activity. For example, a responsive web site for mobile payments and e-Commerce, private social networking, and marketing automation.

In summary, I believe that "On Premise Software" and "Cloud Software" has its appropriate place today in technology. This piece is not a position for one or the other.

However, when you pay off your technology debt (on-premise via software updates or via the cloud), you win, and your customers win too.

If you would like to discuss the proper approach for your organization or sign up for a free assessment, please feel free to contact SmartThoughts.

Until then, keep SmartThoughts in mind.

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