California Management Review

Abstract

Digital transformation is important for organizations to stay competitive. Yet, incumbents face challenges from technical debt accrued from legacy information systems. The big bang approach—aiming for a rapid replacement of legacy systems—often falls short. This failure largely results from treating technical debt as a purely technical issue, while overlooking its managerial implications. What is needed is a gradual approach that redefines IT’s role from debt custodian to strategic enabler, focusing on generating business value rather than solely eliminating technical debt. This article offers four recommendations for managers to handle technical debt amid digital transformation.

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