What is Technical Debt and Why It Matters to Your Business

Technical debt is a widely used analogy in software engineering that explains how some solutions have hidden costs. The term originated from the world of accounting, where businesses take on debt to make investments in their future. This debt is known as “technical” because it’s related to the company’s technology and not financial debt like an operating loan.

Technical debt is the price we pay for quick fixes, rushed code, and cheap shortcuts. It’s a hidden cost that comes with complicated software projects. When you take on debt, you pay later for quicker delivery of your product or feature at the time. In accounting terms, this means taking on negative equity as a trade-off for faster creation of value at the time. But why should anyone care about something so boring as accounting? What does technical debt mean to business?

What is Technical Debt?

Technical debt is the cost of taking shortcuts in the engineering process. It’s the price we pay for quick fixes, rushed code, and cheap shortcuts. It’s a hidden cost that comes with complicated software projects. When you take on technical debt, you pay later for quicker delivery of your product or feature at the time.

Engineers and product managers take on debt to ship product fast, but they don’t have to actually take out a loan. Instead, they are just making a trade-off for a quick fix. The goal is to deliver fast, but the hidden cost is that you’ll have to deal with a mess of code and technical problems later on.The key difference with financial debt is that you don’t have to pay back technical debt. You might as well just ignore it, since there are no consequences. The problem is that you must deal with the cost of the mess you’ve created.

Why Does Technical Debt Matter?

The costs of technical debt in software include less productivity and lots of wasted time fixing problems. You need to clean up your mess at some point. Some of the costs are upfront, but most are long term. You pay in terms of lower quality of work, higher maintenance costs, and loss of productivity.

Productivity: You might finish a project faster, but you’ll have a harder time dealing with future features. You might be able to ship product fast, but the quality of your work will suffer. This means your engineers will spend more time cleaning up. The quality of your product and service will suffer as a result.

Cost of maintenance: You’ll need more time to maintain your product and make fixes. You might simply not have enough engineers to deal with the mess of your code. Or, you might have to deal with the overhead of technical debt and spend more time dealing with bugs and other issues.

Cost of new features: You’ll need more time to add new features later on. This means you’ll have less time for other projects and goals. Your team will be more frustrated and less productive overall. You’ll also have less time to focus on other aspects of your business.

How to Pay Back Technical Debt?

You want to avoid taking on too much technical debt. You’ll want to improve your process and engineering practices to lower the cost of fixing your problems. If you don’t, you’ll be stuck in a cycle of paying back debt without ever getting ahead. This means your engineers will get stuck in a cycle of fixing bugs and dealing with technical issues. This can affect your ability to add new features and grow your product.

Code review: One way to avoid taking on too much technical debt is to review your code and catch problems early. This means you’ll have fewer problems to debug and deal with in the future. It will also mean your engineers will write better code, which will lower the cost of fixing technical debt in the future.

Refactoring: You can also do code refactoring to clean up your code and solve issues. This means you’ll clean up your code, solve issues, and create a better foundation for future growth. The best way to pay back technical debt is to avoid it in the first place. This means you’ll want to improve your engineering process.

When Does Technical Debt Matter Even More?

Some businesses are able to get away with taking on debt. You might be able to finish projects faster, and your engineers might be able to clean up the code. But what happens when you have a critical project that needs to be delivered quickly? Or, what happens when you have a project that relies on a buggy system?

Critical projects: You might be able to take on some debt for non-critical projects. But, you won’t be able to get away with this for projects that are mission critical. You’ll have no choice but to clean up your code and avoid taking on too much technical debt.

Projects that rely on buggy systems: You might be able to take on some debt for a project. However, if you rely on a buggy system, you’ll have to pay back tons of debt. The project will be slower, and your engineers will waste tons of time dealing with the issues. You’ll also be in danger of missing key deadlines.

Bottom line

Taking on technical debt might seem like a good idea. You might be able to ship product a bit faster and focus on other important projects. However, you’ll end up paying for it in the long run. You’ll have more bugs to clean up, higher maintenance costs, and less productivity.In the long term, you’ll have less time to work on new features and projects. You’ll also have less time to focus on marketing, sales, and other important aspects of growing your business. To avoid taking on too much debt, you need to improve your engineering process.