• February 28, 2023
  • By Jonathan Moran, head of MarTech solutions marketing, SAS

How Technical Debt Can Impact the Customer and Employee Experience

Article Featured Image

I imagine that a large number, perhaps even everyone who reads this article, has something critical to their lives that is well past its prime. Maybe it's that old iPhone, maybe it’s your refrigerator or microwave, or maybe you’re like me and it’s your vehicle. The reality is, if it goes out on you, it will cause a major disruption to your day and/or week. Yet you patch, repair, and limp along without proactively replacing it. Why? Well, because for now, it’s less taxing emotionally and financially to just “let it ride.” Plus, human nature is to resist change until failure occurs and major implications ensue. Unfortunately, this pattern plays out in the public arena all the time—whether it’s a bank, an airline, or a retail chain—technology fails and wreaks havoc. And the downstream effects are often long-lasting. This is commonly termed “technical debt”—the hidden cost (financial and otherwise) of maintaining a legacy system or technology that appears to work fine today.

So let's dig a bit deeper. What are the hidden costs? Specifically, how does mounting technical debt impact the experience of the people that your brand interacts with—namely, your customers and your employees?

Impact on the Customer Experience

So many companies create vision statements that include phrases such as “to provide customer valued solutions,” “be the earth’s most customer-centric company,” and “to enrich customers’ personal lives”—but many organizations have looming technical debt that makes these vision statements impossible to achieve. Let’s look at the top three areas where technical debt impacts the customer experience most.

Customer Service. The use of legacy systems and technologies, ones that are not modern and are not able to service the often-immediate customer demands of today are resulting in customer dissatisfaction and churn for many organizations. Perhaps it’s a booking or scheduling system that can’t handle complex variations and optimizations, an inventory or tracking system that can’t handle real-time route changes, or a front-end channel-based solution that can’t properly decipher customer voice or text commands. Examples abound, but with legacy technology and resultant poor system integrations, immediacy of service can’t occur. Without the ability to be agile and react in real-time, customer frustration increases while customer lifetime value plummets.

Automation. The use of legacy software and systems can be directly tied to performing modern processes in a manual and antiquated manner. The most common examples of this include billing, scheduling, and customer engagement processes. Performing these and other processes in a manual manner consumes time and resources and certainly has a financial impact associated. An organization that can automate and modernize many of these legacy manual processes can then reallocate time, money, and employee resources to other parts of the organization. Automated billing, scheduling optimization, and modern customer engagement technologies combined with automation aids such as RPA (robotic process automation) agents—free up organizational resources to focus on areas such as customer experience improvement.

Innovation. It’s very difficult to innovate and provide new experiences to and for your customers if the technology, systems, and processes you are using are out of date. One thing I have seen stifle innovation repeatedly is integration—particularly software and systems integration and compliance that are part of a larger process. Let’s say an organization wants to modernize its staff scheduling process. This process relies on several software systems, including a legacy ERP system (the technical debt) that must be part of the integration. There are no plans or budget to update the ERP system—and we all know what usually happens. Instead of modernizing both systems, neither gets updated, and the entire process suffers. Things go on according to the status quo until they don’t. A significant event occurs and the entire process screeches to a halt. Not maintaining up-to-date technology stifles the ability to create a platform for employee and broader organizational innovation.

Impact on the Employee Experience

Customers aren’t the only ones that suffer the pains of technical debt. Perhaps even more impacted are employees, whom many organizations deem as their most valuable asset. Giving employees the tools and technologies to perform their duties should be seen as a basic human right—but often it’s not. Let’s cover a few impacts that maintaining technical debt has on the employee experience.

Frustration and embarrassment. I can’t count the number of times I have had a frontline agent say to me something to the effect of “bear with me, my systems are running very slowly today.” Legacy systems are often not responsive and can’t get information to customers in a timely manner. This results in not only a poor customer experience but an employee who is frustrated, embarrassed, and doesn’t want to be perceived as incompetent in their roles.

Inability to provide great customer service. More times than not, interactions with brands leave us feeling unsatisfied. Instead of getting what we want as customers, we often receive workarounds, alternative solutions, or some cases an answer of “No, we can’t do that.” And as the common saying goes, “No one wakes up in the morning and says, I want to go be bad at my job today.” Frontline employees don’t want to dissatisfy customers, but it happens all too often because of the legacy processes that must be followed according to organizational policy and the legacy solutions they must use to support their roles and responsibilities.

Burnout and churn. Humans are very resilient creatures. But humans can only put up with so much negativity, frustration, and the feeling of constant dissatisfaction before they seek alternative environments. It happens at organizations all the time: A process, procedure, or system gets updated (or remains the same for too long), and it becomes too difficult for employees to handle. The result is an ensuing mass employee exodus.

I purposely avoided discussing the financial implications of technical debt; instead I focused more on the intangibles of customer and employee experience impact. But the financial implications of technical debt are obvious and include lost revenues and added expenses throughout the organization. One financial term I do want leaders to consider as they ponder technical debt and how to avoid it is TCO, or total cost of ownership. You see, technical debt has a “cost” that is all-encompassing. The negative outcomes of technical debt are pervasive and widespread and can lead to long-term business challenges that can at times be insurmountable. Thus, the total cost of maintaining technical debt can only be avoided by perpetual monitoring of software and systems as the organization matures.

Proactively advancing your technology resources to meet the objectives of the business is critical to long-term organizational growth. If we have learned anything from the recent past, it’s that organizational leaders must understand daily business processes—and know how to support the technical needs of employees to continually grow the business.

Jonathan Moran is head of MarTech solutions marketing at SAS, with a focus on customer experience and marketing technologies. Moran has more than 20 years of marketing and analytics industry experience, including roles at Earnix and the Teradata Corporation in presales, consulting, and marketing.

CRM Covers
for qualified subscribers
Subscribe Now Current Issue Past Issues

Related Articles

Digital Twins: A Marketer's Guide

Digital twins can help companies guide customers to the ideal outcomes on their journey rather than forcing them down a predefined path.

Buyer's Guide Companies Mentioned