What is digital debt, and how can you recognise it in a manufacturing company?

Digital debt is the gap between how many systems a company has and how well they work together. It grows whenever a company introduces another tool without anyone designing how it fits into the whole. It is paid not in licence fees, but in people’s time, distrust of figures and the company’s dependence on a handful of individuals. In a manufacturing company, it can be recognised by seven typical symptoms, the most common of which is an ERP that contradicts Excel.

Where the term comes from

I borrowed the term from software development, where the concept of technical debt has long been used: a shortcut that saves a day today costs a month three years from now. Digital debt works in the same way, except that it concerns the entire company rather than its code.

The difference is that developers can see and name technical debt. No one sees digital debt because it is spread across every department, and each individual instance looks trivial.

Seven symptoms

The ERP and Excel contradict each other. The company has a system that cost millions, but key decisions are made in a spreadsheet.
Every department has its own figures. Three teams report three values for the same indicator.
Reports are produced manually. Someone compiles them from several sources, and they are out of date before they reach the meeting.
The same data is entered by three people into three systems, each in a different format.
Key information is held in people’s heads. When that person is off sick, the company slows down.
Meetings are used to exchange information, not to make decisions.
The owner is the final safeguard for every decision. Without them, everyone waits.

If you recognise three or more of these in your company, digital debt is already slowing you down measurably.

How it arises

Twenty years ago came ERP. Then MES. Then CRM. Excel never disappeared. BI tools, automation and the cloud were added, and now AI.

Every one of these projects made sense and solved a specific problem. But no one designed how all the parts should work as a whole. As a result, manufacturing companies did not create a digital environment but a digital jigsaw. Every system works. The whole does not.

What it costs the company

Digital debt does not appear on the balance sheet. It shows up elsewhere:

decisions take days instead of hours
decisions are based on instinct because the figures are not trusted
people spend time searching for information instead of working
the company depends on the presence of a handful of people
growth hits a ceiling sooner than it needs to

Why it does not shrink by itself

Digital debt has one unpleasant characteristic: every additional system increases it, even if that system works well on its own. A company that deploys AI in a fragmented environment gets a faster fragmented environment.

That is why I start not with technology, but with the question of how a decision should be made in the company.