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Technical debt: no biggie or a threat to your business?

Technical debt: no biggie or a threat to your business?

Most modern software development companies are challenged by high market standards, competition, time-to-market limitations and scarce resources. When having to choose between launching later or taking shortcuts, they often choose the latter and fall into technical debt. And while tech debt is a business decision, many C-levels are not as familiar with it as development teams.

In this article, we’ll talk about technical debt, its types, threats it can inflict on your business and ways to prevent or minimize them.

Technical debt: definition and classifications

Technical debt is the incremental cost that stems from the actions taken by tech teams to save time or money during the early stages of software development. These actions typically include deficiencies in the code, development environment, documentation and third-party software. Since such deficiencies make the code hard to change, they need to be refactored (restructured and optimized to ease testing and maintenance) in time. Notably, the engineers work on tech debt reduction when the system or software is already developed, released, or is already being used. If not addressed in time, tech debt will keep building up, gradually destroying your product.

Based on the intent, tech debt falls into three categories:

  • Intentional tech debt is knowingly incurred out of business considerations. Intentional debt is acceptable as long as you keep it at bay.
  • Unavoidable tech debt is caused by external factors. For example, when third-party systems upgrade and you need to adapt your software to these upgrades.
  • Unintentional tech debt emerges from negligence. It often occurs when many developers work on the same solution and one error layers over another.

Experts also divide technical debt into categories based on the level of neglect:

  • The eventually repaid tech debt never grows to noticeable levels since it is paid on a daily basis. These daily “repays” are so low that they are barely noticeable.
  • The sustainable debt stays on the same level as it is monitored and regularly repaid. The “interest” of sustainable debt is noticeable, but it doesn’t impact other processes.
  • The compound-growth tech debt appears when a team stops refactoring. It grows exponentially as new features are delivered.

Finally, based on the cause, you can distinguish 13 tech debt types, such as automation test debt, people debt, requirement debt, documentation debt, software design debt and more.

Potential threats and financial consequences

Technical debt is very similar to an ordinary loan. If not managed adequately, it may entail severe consequences for your business. Here are the most common of them.

Impact on speed and performance
Technical debt is a quick fix to your problems. But ironically, it may slow down all your processes in the long run.

Let’s take design tech debt, for example. It is one of the most common instances of technical debt since many development teams assume that it is acceptable to compensate at the expense of the design to shorten time to market. However, that’s not always true. Building sound architecture makes the software easier to develop in the future. Though neglecting design will give you some advantage in the beginning, the accumulated tech debt will slow you down later and result in the limited ability to add new features.

Technical debt: no biggie or a threat to your business?

As a result, to manage your tech debt, you will need to hire more QA engineers. Since you spend all your resources on repaying the “interest” of your tech debt, you won’t be able to adapt to market changes and new opportunities quickly. In the end, you fall behind the competition and scare away your potential investors.

Poor quality
When you opt for an easier and quicker solution instead of the right but the more complicated one, it may affect the quality of your product. For example, if you choose not to do usability testing of your application on real users, be ready for a high abandonment rate. Furthermore, skipping security testing may result in remediation and fines.

Less value
Technical debt adds to the maintenance headache. As your company is bombarded with reports on defects and poor usability wards off users, your team will spend more time fixing and maintaining the existing functionality instead of adding new features. Meanwhile, your competitors will add more value to their products. The result? Fewer sales and a bad name.

A decrease in employee engagement
Taking shortcuts regularly may impact your development team negatively. Professional developers and other experts take pride in doing an impeccable job. Lots of monotonous tasks may make them feel less engaged in the process, which may lead to a decrease in their productivity and loyalty to your company. At some point, you will realize that they are going to leave you for your competitor, which means more recruitment and onboarding expenses.

When tech debt is a good thing. How to evaluate “interest”?

Technical debt: no biggie or a threat to your business?

Like its financial “cousin,” technical debt is neither good nor bad. In fact, if it grows slower than your revenue, it is a rational decision that can take your business to the next level. However, it is critical to keep track of your tech debt and check whether the amount you need to pay remains reasonable.

When going into debt, you should evaluate its “interest” by answering the following questions:

  • Is it a critical part of your core product?
  • What effect will this tech debt have on future upgrades?
  • Will the refactoring procedure require many resources? Isn’t it too expensive to fix?
  • Will this debt affect the digital experience of your customers? If so, to what extent?

Also, if you already have some technical debt that requires evaluation, we recommend using TETRA™, our technical debt assessment and reduction service.


Technical debt is an integral part of today’s software development landscape. By striving to find the balance between short- and long-term decisions, many teams incur some tech debt. And like any loan, it shouldn’t be neglected. Otherwise, it will negatively impact velocity, quality, value and team morale. As a result, you will get a decrease in sales, be unable to keep up with the market trends and have remediation expenses and recruitment costs. So do yourself a favor: monitor and address your tech debt. proactively.

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