When it comes to technology, established companies from the pre-digital era understandably think start-ups have got it made; that they can’t possibly relate to the challenges of legacy systems and infrastructure that they face. Surprisingly, they’d be wrong. Many maturing start-ups - industry disruptors that have been around a few years or more – do find themselves unexpectedly grappling with a bit of a tech problem. They often find that the technology they started out with didn’t scale as they grew, nor did it prove flexible enough to adapt as business and market needs changed.

Take, as an example, a company I met with recently. It started out three years ago when its priorities were proving its concept and getting a minimal viable product to market. It used a combination of simple technologies developed in-house and some manual steps to get the job done. Over time, volumes happily increased and the company realised it couldn’t grow any more with its existing set-up.  

This isn’t the only company I’ve met that finds itself in this situation; in fact tech debt is increasingly common in growing fintechs as well as in the large banks who are famously beset by the challenges of legacy IT. Start-ups aren’t expected to have this problem because they’re new and began in the technology era; they’re seen as nimble and able to deliver value quickly. In reality, business decisions, and IT decisions that go with them, set companies of all types on a course. When situations change and volumes increase in-house technologies and manual processes generally don’t scale or adapt to keep pace.

Breaking down walls

Take another example to illustrate the point: a conference venue. It meets the needs of businesses that want to hold an event but it has a limitation – it can only hold a certain number of people. It’s unsuitable for any event exceeding its capacity. To address this limitation, conference venues are built differently now. They are huge halls with partition walls that can be added or taken away depending on the type of event and number of people. This makes them more flexible and profitable.

It’s not so very different to the tech debt issue. Technology can become an inhibitor because rapid change has shortened technology’s shelf life. In the past, companies, including those in credit and lending, payments and eCommerce opted for hard-coded systems to perform certain functions. These systems will scale up to a point and beyond that everything has to be done manually. Making changes to the systems takes weeks or months.

Companies setting up now can’t opt for this approach anymore and those already struggling with a tech debt can’t afford to not plug their IT gap or they will struggle to compete. Throwing resources at the problem doesn’t make rigid solutions flexible. Instead, these companies need to invest now (rather than invest more later) in ‘partition-wall-like’ technology that will grow with them and adapt. That’s how they will fill the tech gap and be prepared for the future.