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Navigating Technical Debt in the Automotive Industry

Learn why enabling shared accountability between IT and other business stakeholders is crucial to balancing and remediating automotive technical debt.

Published By Michelle Wong
Navigating Technical Debt in the Automotive Industry

Amidst the relentless waves of innovation and competition, OEMs, suppliers, and manufacturers in the automotive industry navigate a sea of challenges and opportunities. Technical debt, the accrued cost of code awaiting updates, is a significant obstacle. According to McKinsey, this “tax” on development comprises about 40 percent of IT balance sheets, stemming from the intense pressure to enter the market and gather feedback swiftly.

Notably, a significant portion of CIOs surveyed reveal that over 20 percent of their technical budget dedicated to new products is redirected to address tech debt issues. In this blog, we will

  • Illuminate the intricacies of tech debt in the automotive sector
  • Show how to create a framework of shared accountability between business stakeholders and IT solution providers
  • Provide insight on how to foster cost-effective management of tech debt

The Challenges of Technical Debt

The challenges stemming from technical debt in the automotive sector are multifaceted, demanding a nuanced approach to address the intricacies of software embedded within contemporary vehicles. The expansive network of millions of lines of code poses practical obstacles, necessitating extensive rework, decision-making amid incomplete data, and effective work prioritization, all while grappling with the looming risk of isolated improvement initiatives. These challenges underscore the complexities inherent in managing and evolving the technological framework of automotive software.

An aging codebase adds further complexity, introducing potential quality issues as well as hurdles in upgrading and optimizing software. This process becomes cumbersome, weaving a web of management complications as the automotive codebase simultaneously grows and matures.

Striking a delicate balance between innovation and the intricacies of managing legacy code demands strategic foresight, requiring a keen understanding of the evolving technological ecosystem.

Simultaneously, the divide between business leaders and IT presents a significant hurdle in the dynamic landscape of automotive innovation. The impact of technical debt on quality, speed, and performance often remains obscured, making it crucial to bridge this gap in understanding. Addressing this disparity is essential as business leaders navigate a landscape where the implications of tech debt are interwoven within the fabric of their broader responsibilities, fostering informed decision-making and cohesive collaboration between leadership and the IT domain.

Consequences of Ignoring Technical Debt

Neglecting technical debt in the automotive realm can negatively impact IT leaders in various ways. Financially, it imposes a burdensome surcharge of 10 to 20 percent, as revealed in the McKinsey mentioned earlier, compounding project expenses. Equally impactful is the relentless consumption of team capacity through wasteful code rework and defect remediation, disrupting not just project timelines but the broader efficiency of software delivery organizations.

Moreover, a tangible link surfaces between unaddressed tech debt and missed market opportunities. Failure to grapple with underlying technological challenges hinders swift adaptation to evolving trends, resulting in lost prospects for growth and market dominance.

Finally, the integrity of software performance significantly shapes brand perception and overall business success. Poorly functioning software not only jeopardizes the end-user experience but also poses a substantial threat to the standing and reputation of automotive enterprises in an industry where consumer trust is synonymous with success. The imperative for proactive tech debt management emerges as a linchpin for financial prudence, operational efficiency, market agility, and brand resilience.

Remediating Technical Debt

Effectively navigating the intricate landscape of technical debt in the automotive sector demands a nuanced approach that delicately balances the dynamic challenges of software development with the pragmatic constraints of capacity and resource management. Organizations must deploy advanced tools designed for capacity planning, ensuring the optimal fusion of cutting-edge technological advancements with the available resources, steering the course toward a harmonious equilibrium.

The first crux of tackling technical debt lies in achieving visibility and prioritization.

The What and Why of Technical Debt

To overcome the challenge of visibility and prioritization, organizations must have access to capabilities beyond most conventional approaches, such as capturing real-time visualization coupled with generative AI to identify efforts directed at managing technical debt. The output of these integrations is data-driven insights about the implications of tech debt-related tradeoffs, which can help inform prioritization. By creating these indicators, illuminating areas needing improvement and unveiling bottlenecks within the product’s value stream becomes more accessible and efficient. The result is a state-of-the-art solution that facilitates a systematic and comprehensive approach to resolving technical debt challenges.

Begin remediating tech debt as a two-step discipline: Identify the technical debt to be addressed. Decide how much of your resources you will dedicate to fixing it.

Once the technical debt is identified and prioritized, it becomes more apparent that collaboration emerges as a linchpin in the remediation process.

The Who and How of Technical Debt

The same solution that works to bring tech debt to the surface should also act as a dedicated platform that creates an environment conducive to collaborative resolutions. The core value of these platforms lies in their ability to ensure a consistent, accurate, and informed decision-making process. All of these features are characteristic of fostering an atmosphere of collaboration that extends beyond the realms of immediate teams.

Connectivity becomes key, linking software suppliers seamlessly to the organization’s lifecycle. This interconnectedness establishes swift and objective reporting methods facilitated by automated tools that streamline identifying and resolving troublesome components.

Additionally, a strategic shift from project-centric to product-centric approaches proves instrumental in reshaping the narrative around tech debt. This transition unlocks a more holistic view of technology’s role in delivering value, fostering shared accountability between IT and other business stakeholders. It redefines the narrative, transforming technical debt discussions into collaborative endeavors that:

  • Enhance decision-making processes
  • Drive prioritization
  • And ensure a comprehensive understanding of technical debt’s broader implications

The Right Partners to Help Remediate

Forming strategic partnerships constitutes the final frontier in the remediation journey. Organizations must not only navigate the complexities of internal challenges but also discern where external partnerships can offer optimal solutions. Investing strategically in R&D and technologies aligned with long-term goals becomes paramount, differentiating between challenges best addressed in-house and those that benefit from external expertise.

Collaborating with product solution experts also presents a symbiotic relationship, reducing the cost of trial and error as well as labor-intense maintenance associated with building in-house solutions and providing an efficient, cost-effective approach to addressing the multifaceted challenges of technical debt.

Paving the Way Forward

The automotive industry stands at the forefront of a technological revolution poised to shape our future. However, this journey is not without its challenges; among them, technical debt emerges as a significant hurdle. The consequences of unaddressed technical debt necessitate innovative solutions and strategic partnerships. To propel the industry forward, adopting state-of-the-art approaches in managing and mitigating technical debt challenges is imperative.

Only through collaborative efforts, cutting-edge tools, and strategic alliances can the automotive sector overcome these hurdles and continue its trajectory toward a future where technology positively impacts safety, urban landscapes, and beyond. Planview is dedicated to revolutionizing software delivery at scale, collaborating closely with key automotive and manufacturing partners to bring this vision to fruition.

Learn more about how Planview can help your team reduce tech debt by optimizing your value stream with Flow Metrics.

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Written by Michelle Wong

Michelle Wong is the Content Strategist for Planview's value stream management and software toolchain integration solutions for software delivery. Her content focuses on digital transformation topics including Project to Product, Flow Framework, DevOps, Agile, and SAFe.