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Dive Brief:

  • The rapid rise of artificial intelligence is deepening the complexity of information technology landscapes, setting many companies up for a technical debt ‘tsunami’ in 2025 and beyond, according to research firm Forrester.
  • More than 50% of technology decision-makers will see their technical debt rise to a ‘moderate or high level of severity’ in 2025, projected to reach 75% by 2026.
  • ‘There’s a massive amount of technical debt in IT infrastructures,’ said Forrester Principal Analyst Carlos Casanova. ‘It’s really this perfect storm of technology growing, companies being far more distributed and AI coming into the equation, which will make the problem exponentially worse.’

Dive Insight:

The research highlights the challenges businesses face as they rush to adopt AI and avoid falling behind competitors.

‘CFOs should lead the charge in addressing the enterprise’s accumulated technical debt,’ Protiviti noted. Organizations currently spend about 30% of their IT budgets managing this debt.

AI tools, including generative AI, are among the highest contributors to tech debt along with enterprise applications. In the U.S., tech debt costs an estimated $2.41 trillion annually.

The trend is expected to accelerate as 52% of organizations plan to increase funding for generative AI heading into 2025.

‘Generative AI is leading to a classic catch-22,’ said Accenture. ‘On the one hand, it creates technical debt. On the other hand, when used appropriately, it helps manage and minimize this debt.’

Technical debt results from various practices, such as making temporary fixes that become permanent, which complicates future projects. ‘Complexity builds, and future projects become more difficult,’ McKinsey analysts stated, indicating a cycle of increasing costs due to lost opportunities.

The integration of AI is further complicating matters, as some companies have systems built for human interaction that are not well-suited for generative AI applications.

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