Q&A: Understanding Operational Debt and What to Do About It

A conversation with Rob Klarner, Director, Parallel Innovations

Most businesses know what financial debt looks like. It’s visible, measurable, and usually impossible to ignore.

Operational debt is different. It’s the cost of outdated processes, quick fixes, and technology decisions that were never designed to scale.

It builds quietly in the background. A workaround here. A rushed software decision there. A process that no longer makes sense but still exists because nobody has had the time to rethink it. Over time, these small compromises start to stack up. And before long, the business is spending more energy managing friction than making progress.

Some call it operational debt. Others describe it as an operational deficit. Whatever term you use, the impact is the same: it creates drag across the organisation, slows decision-making, increases risk, and makes change harder than it should be.

And the problem is, most businesses don’t fully realise they have it until it starts affecting performance in a noticeable way.

1. If operational debt builds quietly, how do businesses spot it?

In most cases, they don’t spot it straight away.

It doesn’t look like a major issue. It looks like small inefficiencies. Extra steps, unclear ownership, duplicated effort. People stepping in to keep things moving. But over time, patterns start to form. Work takes longer than it should. Decisions slow down. Reporting feels harder. That’s usually the point where businesses realise something deeper is going on.

2. What does it actually look like in day-to-day business life?

It shows up in the things people have stopped questioning.

Exporting data just to make it usable. Chasing updates across different teams. Relying on spreadsheets to bridge gaps between systems. Individually, none of it feels critical. Collectively, it adds friction to everything.

And the danger is it starts to feel normal. Teams adapt, and workarounds become part of the process.

3. Why do so many businesses end up here?

Most of the time, it comes from sensible decisions made under pressure.

A business grows quickly. A new client lands. A team needs something now, not in six months. So, they find a workaround. Then another. Then another.

Over time, those quick fixes stack up. What’s interesting is how common this is. In KPMG’s 2026 research report, it shows that around 34% of organisations are still operating with disconnected systems and teams, compared to just 2% of high performers.

And that gap is where operational debt tends to sit. Not in bad decisions, but in systems and processes that were never designed to work together long term.

4. Is operational debt mainly a technology problem?

No, it’s broader than that.

Technology often plays a part, but operational debt usually sits across people, process and systems. You can have good tools, but if processes are unclear or teams aren’t aligned, you’ll still feel friction.

That’s why we look at it as an operational issue, not just an IT one. It affects how the whole business functions.

5. What are the biggest risks of leaving it alone?

The biggest risk is that it becomes part of the way the business runs.

People compensate for inefficiencies. They build workarounds into everything they do. Over time, that becomes the norm.

The impact isn’t always obvious at first, but it builds. Growth becomes harder to manage. Decisions take longer. Change becomes more complex than it should be. Deloitte’s 2026 research puts this into perspective. It shows that technical debt can suppress a company’s “latent potential”, value the business has already paid for, but can’t unlock because of complexity.

Operational debt works the same way. It’s not just slowing things down. It’s stopping the business from making the most of what it already has.

6. Are there any warning signs leaders should watch for?

Yes, there are a few that come up again and again.

Heavy reliance on spreadsheets. Processes that only work because certain people hold them together. Delays in reporting. A lack of confidence in data.

Another big one is when change feels painful. If every improvement takes longer than expected, it’s often because the underlying operations aren’t as joined up as they need to be.

7. What kinds of businesses are most affected?

We see it a lot in growing businesses. Especially ones that have scaled quickly, changed direction, or layered new systems onto old ones over time.

What’s interesting is that many of these businesses are successful despite the friction. From the outside, things look fine. Internally, people know it feels harder than it should.

That’s usually a sign there’s more going on beneath the surface.

8. When Parallel works with a business like that, where do you start?

We start by helping them see what’s really happening.

Where is work slowing down? Where are people compensating for poor visibility? Where are decisions being delayed because the data isn’t clear?

For a lot of organisations, that’s the biggest challenge. Research shows employees spend an average of 1.8 hours every day, around 9 hours a week, searching for information across systems.

That’s not a people problem. It’s a visibility problem.

Our role at the start is to bring clarity. Not in an overcomplicated way, but in a practical one. What’s causing friction, what it’s costing, and what’s worth fixing first.

9. What does resolving operational debt really look like?

It’s usually a mix of simplification and alignment.

Simplifying processes that have become too complex. Improving visibility so people trust the data. Making better use of systems already in place.

It’s not about starting again. It’s about making the business easier to run. Less duplication, fewer bottlenecks, clearer ownership.

When that happens, everything starts to move more smoothly.

10. If a business leader is reading this and thinking this sounds familiar, what should they take away?

That feeling is usually telling you something useful.

A lot of businesses normalise operational strain. They assume it’s just part of growth. But it doesn’t have to stay that way.

The shift starts with asking simple questions. Why does this take so long? Why does this process work like this? Why are good people spending time on things that should be easier?

Once you start looking at it that way, the friction becomes clearer.

And when it’s clear, you can do something about it. That’s where we help. Bringing structure to what’s become messy and making the business easier to move forward with.

Operational debt isn’t always obvious, but its impact is. It slows things down, creates unnecessary complexity and makes growth harder than it should be. The sooner it’s understood, the easier it is to fix.

If any of this feels familiar, it’s worth taking a closer look. At Parallel, we help businesses cut through that complexity and bring clarity to what’s really happening. If you’d like to explore what that could look like for your business, get in touch. We’d love to hear from you.