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In Development Last updated: February 10, 2023
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Managing technical debt can differentiate between a successful and a failed software project.

What Is Technical Debt and Its Effects on a Business?

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Technical debt, in its simplest form, refers to the additional expenses a company faces due to using antiquated or ineffective practices to build the software. Code debt and software debt are other names for technical debt.

Technical debt can also be applied in other domains, such as hardware or databases, but it is typically closely related to software development.

Technical debt can consume resources if not adequately managed, leading to inefficiency and a drop in ROI. Developers must work more since maintaining, editing, or replacing older code can take more time and effort.

Technical debt can also result in increased costs if the issue still needs to be resolved right away because fixing these problems gets more expensive over time.

Therefore, the effects of technical debt might be anything from reduced levels of customer satisfaction and employee morale to increased maintenance costs and decreased productivity. It is something that most software developers and engineers run into when trying to build a successful software solution.

To conclude, higher operational expenses, less innovation, and lower customer satisfaction are all consequences of technical debt. Due to the inefficiencies, delays, and financial losses, it might cause, it can also have a long-term effect on a company’s bottom line.

This debt can be expensive and time-consuming, frequently affecting a company’s ability to compete in the market.

Reasons for Technical Debt

Similar to financial debt, ignoring or delaying addressing technical debt increases the likelihood that it will become a problem.


Technical debt can cause expensive fixes, hold up software development, and generally hinder software delivery, costing you a lot of money if it needs to be controlled. Therefore, to avoid technical debt in the first place, it is crucial to comprehend its root causes.

Below are a few significant reasons for technical debt, which are self-explanatory:

  • Time constraints for delivering the project 
  • Frequent changes to the requirements and specifications
  • Duplication of code
  • Code complexity 
  • Lack of standards and frameworks
  • Long-lived branches

A branch with active code development that has been out of sync with the main trunk branch for a considerable time is said to be a long-running branch.

Technical debt can result from several factors, including using hurried and inadequate solutions that need to scale better or sacrifice quality for immediate gains, as well as a lack of knowledge, resources, or time while writing or maintaining code.

It frequently results from rapid or insufficient development, which leads to errors, a bad user experience, and delays, when junior developers are asked to build complex software without the appropriate support, whether because of project deadlines, other constraints, or a lack of resources, there is a chance that tech debt will increase.

Failure to adhere to best practices, produce maintainable code, or implement the proper procedures can result in technical debt. Additionally, it may result from cutting corners, poor testing, and documentation, or deciding to speed up the development process.

Examples of Technical Debts

The cost of technical debt will eventually increase the longer it remains addressed by a company. Businesses may experience decreased productivity and scalability, elevated technical risk, and more challenging software maintenance.

Let’s look at a few examples of technical debts in the section below:

Example 1: Inflexible Framework

The project manager sets a tight deadline for the software delivery, so the developers opt for a framework that is quick to build on but has limited flexibility. In this illustration, the product is delivered on the target date despite the developers using a framework with known problems.

The team may become involved in releasing packs to correct the issues and delete the problematic code once the target dates have passed. This action will produce more work leading to technical debt.

Example 2: Inexperienced Developers

Management might employ developers with little experience or inadequate abilities to design the software. Likely, these inexperienced developers will need help to create software that satisfies the standards for quality.

Additionally, this deadline would pressure the programmer to meet deadlines, leading to the release of flawed software. Technical debt results from later having to redo the work to correct the flaws or provide service packs.

Example 3: Choosing the Wrong Platform

Sometimes developers prefer quicker, simpler, and more practical platforms, like CMS platforms, for creating e-commerce websites. The e-commerce website will likely become slow or crash if it receives a lot of traffic if the CMS can’t handle the demands. Rebuilding the site will incur huge costs resulting in technical debt. 

Additionally, below are a few more specific real-life examples of technical debt:

  • Poor software design selections.
  • Unclear definition of the project’s goals.
  • Lack of ownership over the product.
  • Relying on premature and unsafe fixes rather than thorough restructuring.
  • Inadequate testing of the code.
  • Skipping tests and review processes.
  • A lack of knowledge about software architecture.
  • Writing code without following best practices.
  • Last-minute changes to the code.
  • A lengthy list of product upgrades made by several developers.
  • Adding features to existing code without properly refactoring it.
  • Parallel development on many branches of code will eventually need to be merged.

Types of Technical Debts

The term “technical debt” refers to the buildup of technical problems in a project or product. These technological problems may result from improper planning, poor code restructuring and testing, and other factors.

Creating effective mitigation plans for technical debt requires understanding the various types and processes that lead to their creation.

Technical debts generally fall into one of two categories:

  • Intentional or Deliberate Debt
  • Unintentional or Accidental Debt

When a team prioritizes speed over code quality, intentional technical debt is often created. There is unintentional technical debt when mistakes are produced accidentally in implementation, design, or architecture. Unintentional technical debt includes types related to design, implementation, and processes.

The board-term technical debt contains the following debts:

  • 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 often has two adverse effects: first, it drives up long-term development and maintenance costs due to the need for rework or corrections, and second, it can lower product or service quality due to inadequate underlying components.

Best Practices for Managing Technical Debt

For many businesses, managing technical debt is becoming an increasingly difficult task, especially when there is a requirement for new software development.


Adopting the best practices for managing a technical debt requires a thorough understanding of the technology and software utilized and preparations to solve any possible difficulties. Technical debt is the expense a firm incurs to maintain its systems, which can be significant.

The employment of subpar coding techniques, the development of difficult-to-maintain software architectures, and the utilization of inadequate tools and frameworks can all contribute to the accumulation of technical debt.

Organizations may have severe issues due to technical debt, including costly rework, decreased agility, and more challenging software maintenance.

Let’s see a few best practices to minimize or overcome technical debt:

  • Checklist of tasks that need to be completed at each stage.
  • Hiring developers with experience and skill.
  • Follow the best framework and the most reliable software architecture while keeping the end goal in mind.
  • Instead of producing subpar code and hoping to repair it afterward, write high-quality code.
  • Maintain an open record of all modifications.
  • Utilize automated testing as needed.
  • Refactor your code often using an Agile methodology.
  • Allocate time to attend to debts as and when required instead of delaying them.

Additionally, employing tools like Stepsize, SonarQube Teamscale, Jira, etc., would aid in this technically challenging process if you’re trying to keep track of technical debt.

Learning Resources

#1. Technical Debt in Practice: How to Find It and Fix It

This book will give you insights into specific methods to identify and eliminate technical debt. The book is a one-stop resource for technical debt knowledge.

It offers references, advice, and a variety of case studies from successful businesses that have applied successful ways to control technical debt.

It addresses issues, including technical debt, why it exists, how it affects an organization, how to recognize it, how to resolve it, and how to create strategies that will effectively reduce it.

The book also offers valuable guidance on quantifying, monitoring, and controlling technical debt to preserve software quality.

The book emphasizes how software engineers, project managers, and CTOs should manage the resources at their disposal to minimize technical debt

#2. Managing Technical Debt: Reducing Friction in Software Development 

Managing Technical Debt in Software Development is a comprehensive book handling technical debt written by professionals in the industry. The book is intended for IT specialists and software developers looking for methods to control and minimize their technical debt.

The book explores strategies for preventing and minimizing technical debt and gives an overview.

It offers case studies, best practices, and practical recommendations to aid developers, product managers, and technical staff comprehend the complexities of technical debt.

The book provides an incisive review of technical debt’s effects, outlining the consequences of cutting corners during software development and addressing how to control it before it becomes too expensive. Additionally, it offers helpful tools and measures for reducing technical debt.

#3. Sustainable Software Architecture: Analyze and Reduce Technical Debt

The author of this book, Carola Lilienthal, has successfully refactored more than 300 software systems created in various languages, including Java, C#, C++, PHP, and ABAP. The book is a comprehensive instruction manual for building scalable and maintainable software.

It addresses a variety of subjects with a focus on technical solutions, such as code restructuring, domain-driven design, and software maintenance.

The book will assist software developers in learning how to create reliable, stable, cost-effective, easy-to-maintain applications. It provides readers with a thorough examination of the fundamental ideas and methods underpinning software design and helpful advice for everyday use.

This book will undoubtedly be a valuable tool for software engineers and architects.

#4. Software Design X-Rays: Fix Technical Debt with Behavioral Code Analysis

As it offers thorough recommendations, lessons, and resources that can aid software developers in producing better designs, the book Software Design X-Rays is a priceless tool.

The book also offers thorough technical explanations of various software designs and how to apply them to solve specific issues.

Additionally, the book offers behavioral pointers on how to improve designs for a better user experience. It provides detailed instructions and methods for refactoring existing code and avoiding technical debt.

The book also educates readers on DevOps, continuous delivery, and agile development techniques.

#5. Understanding Technical Debt: Your Guide to Navigating in the Age of Digital Disruption

Technical debt, a term that has grown in significance in the tech sector, is examined in depth in this book, Understanding Technical Debt.

The book, created by professionals in the field, provides readers with an overview of the problem and discusses the management and mitigation techniques for technical debt.

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It examines the difficulties of managing technical debt from both a commercial and an engineering standpoint and offers helpful guidance on how to stop it from getting out of hand.

Case studies are also included in the book to demonstrate the impacts of technical debt and proper management techniques.

Final Words

Technical debt could be caused by various factors, such as design defects, workarounds, cost-cutting measures, or just a lack of resources, as was learned from the post above.

A successful software project must have a plan for handling technical debt. To avoid additional efforts and over budget while building the code, it’s essential to comprehend the best techniques for controlling technical debt.

For any firm, managing a technical debt can be a complex undertaking. Careful planning and strategy are needed to ensure that the debt can be managed successfully and efficiently.

A good plan involves recording and analyzing the debt regularly, finding ways to lower it, and putting precautions to prevent new debt from accruing.

Next, check out technicalities that can ruin your sprint and how to fix them.

  • Satish Shethi
    I have been in the IT industry for more than 20 years. I have served Fortune 100 company in a senior role looking after projects related to US Banking, BFS, Mortgage, Insurance, and FMCG. Apart from IT, I like to read books, especially spirituality… read more
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