What is technical debt?

Accruing debt is common in business operations. In many cases, debt can be a valuable tool. However, too much debt can spell danger for your company, and technical debt is no exception.

While technical debt doesn't necessarily mean you owe money, it can affect your organization's bottom line. Yet, in some situations, it can help you get ahead.

Completely avoiding technical debt is impossible. By learning more about it, you can understand how to measure technical debt and avoid accumulating too much, thereby avoiding serious consequences.

This article explores what technical debt is, the different types of tech debt, and how to tackle it.

When we think of debt, money is the first thing that usually comes to mind. While technical debt shares similarities with financial debt, it doesn't mean you owe money. Technical debt (also known as code debt or design debt) is a deficiency of technology that affects the performance of a product, service, project, or even a company.

Technical debt tends to be accrued to reach a finish line more quickly, for example, a deadline or the beta-testing stage of product development. Like financial debt, tech debt can be a useful tool to reach goals that would otherwise be unattainable. However, it can have unintended consequences.

To better understand technical debt, think of the reasons why businesses choose to take on financial debt. By taking on debt, for example via a loan, a company can use the money to develop a product or service that will pay off the debt and provide additional income. The payoff is worth the risk.

Technical debt arises from choosing a software solution that is quicker in the short term but will take more time to fix in the future. The excess time to fix the problem is like interest paid on a loan.

Like financial debt, a little technical debt can be beneficial, but taking on too much can result in an endless cycle of debt. When fixing one technical error leads to the discovery of another, companies have taken on too much tech debt.

How do you identify technical debt?

Technical debt exists because of intentional or unintentional software development decisions. When it's intentional, developers know where the debt is, and have some idea of the effort required to eliminate it.

Unexpected technical debt may be more difficult to identify directly. In most cases, technical debt is revealed through user feedback that suggests the software isn't working properly. Such issues can range from minor glitches to a complete system crash. Many similar complaints from consumers can help development teams locate and repair tech debt.

How to measure technical debt

Ideally, technical debt is accrued intentionally to reach a specific goal. In such situations, it is used to prioritize productivity with a known cost to be paid in the future. Simply put, technical debt is acquired to save time. As such, it must be paid back in the time required to fix poorly written code or write new code.

To responsibly measure technical debt, developers should classify the debt when it arises and schedule the time it will take to pay it off.

What do your users really want?

Just upload your customer research and ask your insights hub - like magic.

Try magic search

Over the years, many different types of technical debt have been identified.

In 2007, Steve McConnell divided technical debt into two basic types:

• Intentional: tech debt taken on as a strategic tool

• Unintentional: tech debt which is the result of a poor job

A couple of years later, Martin Fowler further divided technical debt and presented this in the Technical Debt Quadrant, which includes intent and context. The quadrant categorizes technical debt as “deliberate” (intentional) or “inadvertent” (unintentional). The other two categories of the quadrant are “reckless” and “prudent”.

A more recent categorization created by a group of academics divides technical debt into 13 types based on key indicators:

• Architecture debt

• Build debt

• Code debt

• Defect debt

• Design debt

• Documentation debt

• Infrastructure debt

• People debt

• Process debt

• Requirement debt

• Service debt

• Test automation debt

• Test debt

Technical debt is not inherently bad. It can be a valuable tool to help you reach goals and meet critical deadlines. In some cases, accumulating technical debt can even result in saved time as a single repair can be used in multiple places.

Software companies are under pressure to deliver products quickly. By reaching the beta phase as soon as possible, companies can analyze data about the potential success of a new product. However, taking on debt recklessly can lead to unacceptable risks.

Is technical debt a risk?

Like other forms of debt, technical debt can be a risk when used irresponsibly. When used strategically, it can allow software developers to meet deadlines and satisfy customers. However, when the project becomes too rushed, shoddy work can result in poor UI or other problems which can cause customers to churn.

Business teams and IT teams can be responsible for technical debt. When business executives push for fast results, technical staff may respond with suggestions that include technical debt. 

Teams may have conflicting goals and business staff may not understand the full scope of the consequences of technical debt. When technical debt is accrued, both teams must work together to ensure the debt is resolved.

Every piece of software is built on complex strings of code. Developing new code takes time and significant effort. In some cases, imperfect code can work as a temporary solution to allow developers to reach a specific goal quickly. After the goal is reached, designers go back and “pay the debt”, taking more time to develop improved code for ideal performance.

However, not all tech debt is planned. Since code development is complex, errors can sometimes be the cause. Technical debt can result from any of these four features:

• Strategy: tech debt can be used strategically to reach specific business goals

• Architecture: the code used to develop software can result in technical inefficiencies

• Talent: unintentional technical debt is accumulated through errors in software development

• Process: technical debt can be part of an intentional process to meet essential deadlines

Whether intentional or unintentional, most software companies accrue technical debt. To focus on future development, it's essential to tame technical debt and ensure it doesn't outpace your company's growth. The following tips can help you strategically tackle technical debt.

Develop a working definition of technical debt

Internal teams can disagree about what constitutes technical debt. Create an internal definition that clarifies exactly what can be classified as technical debt. Any shortcut that creates a difference between what was promised and what was delivered should be classified as tech debt.

Clear communication between teams can limit the amount of technical debt accrued and ensure it is repaid quickly.

Avoid creating separate rules for testing sprints and tasks

Once the definition of tech debt is in place, avoid compromising it for any reason. While it can be tempting to classify testing as a separate matter, technical debt accrued during testing can be passed on to development processes.

By maintaining a strict definition of technical debt and how it's repaid, you can avoid accumulating too much.

Use automation to repair bugs

Software bugs can result in low user quality, which can cause customer churn. When a bug is discovered, it's easy to put off taking the time to fix it. Yet, this type of procrastination can lead to excessive accumulation of technical debt.

When a bug is discovered, take the time to add an automated test that demonstrates the bug. When the bug is fixed, rerun the test to check the software passes.

Technical debt can be used as a short-term tool to reach strategic company goals. Yet, relying too heavily on tech debt can lead to unintended consequences that result in customer churn. Understanding technical debt is the first step to eliminating long-term consequences.

By developing a technical definition and creating a plan to pay off tech debt, your organization can control the levels of technical debt you take on. While it's true that technical debt can be used as a tool, it's only effective when used responsibly.