Why your technology costs more than it should

Most businesses I work with are spending more on technology than they need to. Not because they're buying expensive tools or hiring too many developers - but because of decisions made months or years ago that quietly compound into significant waste.

The numbers are striking. Research shows that the average UK SME spends 70% of its IT budget just keeping existing systems running, leaving only 30% for anything that actually moves the business forward. Engineers lose up to 42% of their time to technical debt - that's two days every week spent working around problems instead of building value.

If you're a founder or CEO running a growing business, that probably feels familiar. Technology costs keep rising, but it's hard to pinpoint exactly why - or what to do about it.

In my experience, the overspend almost always traces back to a handful of recurring patterns. Here are the ones I see most often, and what you can do about each one.

Over-engineered solutions

This is the most common source of technology waste I encounter. A business needs a booking system, a customer portal, or an internal tool - and what gets built is an enterprise-grade platform designed to handle ten times the current load, with features nobody asked for.

Developers, understandably, want to build things properly. But "properly" can easily become "excessively" when there's no experienced technical leadership providing commercial context. I've seen startups with 50 users running infrastructure designed for 50,000. I've seen internal tools built with microservices architecture when a simple web application would have done the job in a quarter of the time.

The cost isn't just the initial build. Over-engineered systems are more expensive to maintain, harder to modify, and require more senior (and more expensive) developers to work on. Every unnecessary layer of complexity becomes a tax on every future change.

What to look for: If your developers are spending weeks on "infrastructure" before building any features your customers will see, or if simple changes consistently take longer than you'd expect, over-engineering may be the culprit.

What to do about it: The solution isn't to cut corners - it's to match the architecture to the actual business need. An experienced technical leader can assess whether what's being built is proportionate to the problem being solved. In many cases, a simpler approach delivers the same outcome at a fraction of the cost.

Wrong architecture choices

Architecture decisions are among the most consequential - and most expensive to reverse - choices in any technology project. Get them right early and everything that follows is more straightforward. Get them wrong and you pay a compounding tax on every feature, every fix, and every new hire.

The challenge for non-technical founders is that these decisions are often invisible. You won't see them on a project plan or a sprint board. They happen in conversations between developers, in pull requests, and in technical design sessions. By the time the consequences become visible - slow delivery, mounting bugs, difficulty hiring - the cost of correcting course has multiplied.

I worked with a global humanitarian organisation where an external agency had proposed a major modernisation project. When I conducted an independent technical assessment, I discovered that 60% of the proposed costs were actually addressing technical debt the agency itself had created. The organisation was about to pay twice for the same mistakes.

What to look for: Delivery that gets progressively slower over time, difficulty onboarding new developers, and a growing list of "we can't do that because of how it was built" conversations are all symptoms of architectural problems.

What to do about it: Architecture decisions benefit enormously from experienced oversight. You don't need a full-time architect on staff - but having someone with deep experience review critical decisions before they're made can save tens of thousands of pounds down the line. That's exactly what Architecture Advisory provides.

Technical debt interest

Technical debt is one of those concepts that gets talked about a lot but rarely gets managed well. The analogy is straightforward: just as financial debt accrues interest, shortcuts and compromises in code create a growing burden that makes everything slower and more expensive over time.

The statistics are sobering. Research from Stripe estimates that developers spend 42% of their working time dealing with technical debt and maintenance. A system that's two years old typically carries 20% more debt cost than when it was new. At five years, it's 50% more. At ten years, you're paying double.

For a business with a development team of five, that can easily translate to two full-time developers' worth of effort going towards managing problems rather than building value. At UK market rates, that's upwards of £150,000 a year in productivity lost to accumulated shortcuts.

The insidious thing about technical debt is that it's invisible to non-technical leadership. Your developers feel it every day - in longer build times, in fragile tests, in code that breaks in unexpected places when you make changes. But it rarely shows up in the reports that reach the boardroom.

What to look for: If your team's velocity is declining - if features that used to take a week now take three - technical debt is likely accumulating faster than it's being paid down.

What to do about it: Technical debt isn't something you can eliminate entirely, and attempting to do so would be a mistake. The goal is to manage it strategically - taking on debt deliberately when it serves the business, and paying it down systematically before it becomes crippling. This requires someone who can translate between the technical reality and the business priorities.

Vendor lock-in

Most businesses don't set out to become locked in to a particular vendor. It happens gradually - a platform choice here, a proprietary integration there, a custom feature built on a vendor's specific API. Before long, switching becomes so expensive and disruptive that the vendor effectively has pricing power over you.

I see this particularly with cloud services and SaaS platforms. A business starts on a platform that's perfectly adequate at their current scale and price point. As they grow, the costs scale disproportionately. But by now, their entire codebase is tightly coupled to that vendor's specific services, their team's expertise is vendor-specific, and migration would mean months of work and significant risk.

The result is predictable: costs rise, negotiating leverage disappears, and the business ends up paying a premium simply because changing would cost even more.

Recent research from Vertice found that 73% of SaaS vendors increased their prices in 2023 alone. If your systems are tightly coupled to specific vendors, those increases hit you with no alternative.

What to look for: If your technology costs are rising faster than your usage, if you're paying for features you don't use because they're bundled, or if the answer to "could we move to a different provider?" is "that would take months" - you have a lock-in problem.

What to do about it: The best defence against vendor lock-in is architectural. Systems designed with clear abstraction layers can swap underlying providers without rewriting the application. This doesn't mean building everything yourself - it means making deliberate choices about where coupling is acceptable and where it's a risk. An experienced technology leader can help you identify where you're locked in and build a realistic path to flexibility.

Paying for capabilities you've outgrown (or haven't grown into)

This one cuts both ways. Some businesses are paying enterprise prices for capabilities they'll never need. Others are running consumer-grade tools well past the point where those tools can support the business efficiently - and the hidden cost shows up in workarounds, manual processes, and frustrated staff.

I've seen businesses paying thousands per month for a CRM platform with features designed for companies ten times their size, because someone chose it three years ago and nobody has reassessed since. I've also seen businesses running critical operations on spreadsheets and free-tier tools, where the hidden cost in manual effort and errors far exceeds what a proper system would cost.

The common thread is a lack of regular, objective review. Technology decisions that made sense eighteen months ago may not make sense today. Markets change, businesses evolve, and what was the right tool at one stage becomes the wrong tool at the next.

What to look for: Conduct a simple audit. For each major tool or platform, ask: what are we paying, what are we using, and does this still match where we are as a business? The answers are often revealing.

What to do about it: A periodic technology review - even annually - can identify thousands of pounds in savings. This doesn't require a massive project. It requires someone with enough technical breadth to assess the full picture and enough commercial sense to weigh the costs and benefits honestly.

The compound effect

None of these patterns exists in isolation. Over-engineering leads to technical debt. Wrong architecture choices create vendor lock-in. Mismatched tooling masks underlying architectural problems. The real cost isn't any single issue - it's the compound effect of several patterns running simultaneously, each making the others harder to address.

This is why technology cost management isn't really about cutting costs. It's about making better decisions. The businesses I've seen achieve the most significant savings aren't the ones that slashed their technology budgets - they're the ones that brought in experienced technical oversight early enough to prevent the waste from accumulating in the first place.

A Fractional CTO can provide exactly this kind of oversight. Not a full-time hire - most growing businesses don't need that - but regular, experienced technical leadership that ensures your technology investment is working as hard as your team is.

What good technology cost management looks like

If you're wondering what the alternative looks like, here are the hallmarks of businesses that manage technology costs well:

• Architecture matches the actual business need - not the imagined future need, not best practice for the sake of it, but what's proportionate and appropriate right now
• Technical debt is visible and managed - the leadership team knows where the debt is, what it costs, and has a plan for paying it down
• Vendor relationships are reviewed regularly - not just at renewal time, but as part of ongoing technology governance
• New technology decisions include commercial context - not just "what's the best technical solution?" but "what's the best solution given our budget, timeline, and growth trajectory?"
• Someone owns the technology strategy - even if it's only one or two days a week, someone with experience is asking the right questions

Getting started

If any of this sounds familiar, I'd suggest starting with a simple exercise. List your five largest technology costs - hosting, SaaS subscriptions, development team time, external contractors, infrastructure. For each one, ask: is this proportionate to the value it delivers? If you're not sure, that's the first sign that independent technical oversight might help.

I've put together a comprehensive guide to understanding fractional CTO costs and engagement models in the UK. If you're considering whether experienced technical leadership could help your business make better technology decisions - and reduce unnecessary spend - the Fractional CTO Cost Guide UK 2026 is a good place to start.

And if you'd prefer to have a conversation about your specific situation, get in touch. No obligation, no jargon - just an honest assessment of where you are and what might help.

Frequently asked questions

How much do UK businesses typically overspend on technology?

Research suggests that the average UK SME spends 70% of its IT budget on maintenance and "keeping the lights on" rather than innovation. Combined with studies showing 28-35% of cloud spending is wasted on idle resources and misconfigurations, the typical overspend is significant. The exact figure varies by business, but in my experience, most growing companies could reduce their effective technology costs by 20-30% through better architectural decisions and strategic oversight.

What is the biggest hidden technology cost for growing businesses?

Technical debt is consistently the largest hidden cost. Stripe's research found that developers spend 42% of their time on technical debt and maintenance - effectively meaning that for every five developers you employ, two are working on problems rather than progress. Because this cost is invisible to non-technical leadership, it often goes unaddressed until it becomes a serious drag on delivery speed and team morale.

How can a fractional CTO help reduce technology costs?

A fractional CTO provides experienced technical oversight without the cost of a full-time executive hire. They can identify over-engineering, challenge architecture decisions, manage technical debt strategically, and ensure vendor relationships serve the business rather than the other way around. The typical ROI comes from avoided mistakes - wrong architecture choices, unnecessary infrastructure, and poor vendor decisions that would otherwise compound into significant waste. A two-day-per-week engagement costs a fraction of the savings it typically identifies.

When should a business invest in technology cost management?

The best time is before costs become a problem - ideally when the business reaches the stage where technology decisions have meaningful financial consequences. For most SMEs, that's somewhere between 10 and 50 employees. However, if you're already experiencing rising costs with declining delivery speed, or if technology spending is growing faster than revenue, an immediate review is worthwhile. Even a one-off architecture assessment can identify significant savings.

Is it worth conducting a technology audit if we're a small business?

Yes. In fact, smaller businesses often benefit most from technology audits because they have less margin for waste. A review doesn't need to be expensive or time-consuming - a focused assessment of your architecture, vendor relationships, and development practices can be completed in a few days. The savings identified typically pay for the review many times over. The key is having someone with enough technical breadth to see the full picture and enough commercial awareness to prioritise what matters most.