Technical debt is becoming increasingly relevant in today’s fast-paced digital landscape.

It’s an issue that typically stems from implementing quick solutions that aren’t considered for long-term performance. As businesses accelerate their digital transformation and software development, the pressure to deliver features rapidly often leads to shortcuts. This can result in a complex, poorly maintained codebase that hinders innovation and increases the risk of system failures.

The rapid evolution of technology and the increasing complexity of software systems in recent years has exacerbated the problem. Outdated technologies, legacy systems and poor design choices are now causing significant challenges for affected businesses, making it difficult to adapt to new trends and customer demands.

Recognising and addressing technical debt is crucial for long-term software sustainability.

In this blog, we explain exactly what technical debt is, how to spot the signs of it in your business and what you need to do to address it before it derails performance further.

What is technical debt?

Technical debt, also known as code debt or design debt, refers to consequences of choosing a quick and easy solution in software development that causes issues in the future. In short, it’s when you take shortcuts to resolve a challenge now, only to find it isn’t built for optimal performance long-term.

Let’s look at an example. Imagine a developer is tasked with quickly adding a new feature to a website. Instead of taking the time to write well-structured code, they opt for a quicker workaround by copying and pasting existing code and neglecting testing.

While the request is delivered quickly, the underlying code becomes more complex and prone to errors.

In many ways, technical debt acts like financial debt:

• Taking on debt: Developers may choose to take shortcuts or use suboptimal solutions to meet deadlines or reduce costs. This creates technical debt.
• Interest accrues: Over time, technical debt can accumulate, making the codebase harder to maintain, update and extend. This can lead to increased development costs and slower delivery of new features.
• Paying back the debt: Eventually, the technical debt needs to be repaid by refactoring the code to improve its quality and maintainability. This can be a costly and time-consuming process.

In the short term, shortcuts may seem like a time and money saver, but in the long run, it can lead to increased maintenance costs, slower development cycles and a higher risk of system failures.

Technical debt can also be passed on from system providers. That’s why it’s crucial to only select solutions from reliable vendors, with proven performance and proper configuration.

What are the causes of technical debt?

There are many reasons why technical debt happens, especially in the modern business landscape.

The most prominent is a lack of time and resources. Many businesses face a technical skills shortage, which can leave them running thin on IT and development capacity. The staff they do have therefore may feel pressured to take shortcuts to meet deadlines and get tasks done.

Some businesses may also need to use staff who don’t have the relevant skills, which can lead to poor choices or errors. This leads to suboptimal coding and design.

In some cases, this results in testing being neglected, which means bugs go undetected until much later, when they’re likely to cause more issue. Code reviews may also be deprioritised.

On top of this, some developers may face frequent changes in requirements which result in complex customisation and unclean code.

Other factors, like a lack of documentation or using outdated technologies, can also exacerbate the issue of technical debt, making it harder to maintain and evolve systems.

What are the symptoms of technical debt?

It’s clear technical debt is a significant issue. But what are the signs that your business has it? We’ve listed the key symptoms you can expect:

• Slow development of your systems: As the codebase becomes more complex in your systems, it takes longer to implement new features and fix bugs. Your developers and IT teams may struggle to make changes, which can slow down timelines and impact ROI.
• Frequent bugs and errors: Suboptimal code and lack of testing can lead to frequent system failures and errors. Your business users may be unable to complete specific tasks and experience frustration.
• Increased maintenance costs: More time and resources are required to maintain a system with technical debt, due to its complexity and fragility. You may need to spend more on developer hours. This will increase operational costs, impacting your bottom line.
• Inability to change: As the system code becomes more complex, developers will struggle to make any changes. This means you could miss emerging trends or new technologies, causing you to fall behind your competitors and lose market share.
• Reduced customer satisfaction: System instability and frequent outages can negatively impact customer experience, especially if it impacts systems they use. This leads to worse satisfaction scores and may cause them to look elsewhere.
• Damaged reputation: A reputation for unreliable or low-quality software can harm the company’s brand. If you are getting feedback from either customers or staff that your systems are causing frustration, it could suggest you’re becoming known as a complex and dated organisation which people steer clear of.

If you notice any of these symptoms, it’s crucial to examine the cause and determine if technical debt is at play.

Is tech debt always bad debt?

There are some limited cases where technical debt may not be a bad thing for your business.

Sometimes, taking on technical debt can be a strategic decision. For example, a startup might choose to prioritise rapid development over code quality in order to get a product to market quickly.

If technical debt is managed carefully, it can be a useful tool for accelerating development. However, it’s important to have a plan for addressing it later before it causes issues for your business long-term.

Outside of these circumstances, technical debt should always be avoided. While it may be tempting to move quickly by taking shortcuts, this will almost always lead to greater headaches later, leading to increased costs and effort.

How to eliminate technical debt?

If you are facing technical debt, you may be wondering how to address it effectively. We’ve put together a step-by-step guide.

1. Identify and prioritise_

The first step is understanding where the technical issues are within your systems. You’ll need to analyse your code base, considering factors like code complexity, maintainability and potential risks. Essentially, you’re looking for the areas that cause bugs or prevent agility.

Then, focus on addressing the most critical areas of technical debt that have the greatest impact on performance, security or future development. This will give you faster rewards from any fixes you implement.
Remember to collaborate with product owners, business analysts and other stakeholders to understand their priorities and uncover the challenges they’re facing. This will enable you to align technical debt repayment with business objectives.

2. Allocate resources_

Addressing technical debt does require time and money. So, you’ll need to allocate sufficient budget and resources for your efforts. Typically, you’ll need to engage in code refactoring to clean it up and eliminate troublesome code. This requires appropriate skills, so make sure you have the right people in place.

Then, dedicate specific time slots for refactoring tasks, either through a dedicated sprint or a regular part of the development process. In some cases, you may need to go beyond refactoring and invest in new systems, which will require more investment to go through the procurement process and transition.

It’s worth establishing a dedicated fund to finance refactoring efforts and prevent future accumulation of technical debt. This can also be used to invest in new systems when required.

3. Adopt best practices_

The best way to address technical debt is minimise it happening in the first place.

Start by conducting regular code reviews to identify and address technical debt early on.
You should also encourage developers to write clear, concise and well-documented code, as this will be easier to maintain long-term.

If time is an issue, it may be worth implementing automated tests to catch regressions and ensure code quality. At the very least, you should be conducting user testing across your systems, especially when a change is being made.

You should also continuously evaluate your development processes and tools to identify areas for improvement. This will prevent technical debt recurring.

4. Communicate effectively_

Another key to avoiding technical debt is ensuring the whole business understand its impact and why it’s so problematic.

Start by educating stakeholders on the concept of technical debt and its impact on the business to gain support for efforts to address it. This may also support in getting budgetary sign off for refactoring or replacement systems.

You should also regularly report on the progress of technical debt repayment and its impact on the overall system health, while celebrating any achievements to rectify it.

Remember to communicate the reasons why technical debt should be avoided long-term, as this will help to encourage thorough development rather than workarounds. This will avoid you having to revisit technical debt multiple times.

Do you need to replace systems to address technical debt?

When you are experiencing significant technical debt, which can’t be solved by refactoring alone, you need to consider replacing systems. This won’t always be necessary, but it can eradicate any existing issues.

Modern systems often come with better design principles, cleaner code and updated technologies, leading to less technical debt. They also tend to offer better performance, scalability and reliability, alongside stronger security measures.

This means they’re futureproofed, allowing you to make changes without the risk of introducing technical debt. However, this will only work if you pick high-performing systems that are built for your business needs and implemented expertly. So, spend time researching systems to ensure they’re provided by a reputable vendor and dedicate time to embedding them properly.

Of course, there are considerations you should make before deciding to change systems.

Firstly, you need to evaluate the root causes of technical debt. Replacing systems may not address underlying issues like poor development practices or lack of resources, so it’s crucial to find a solution that aligns with your specific causes.

If you are replacing systems, you may also want to pursue a phased approach instead of a complete overhaul. This will allow you to minimise risks, manage costs and get faster results. When doing this, focus on replacing systems that have the greatest impact on business operations or security.

Finally, remember that even with new systems, ongoing maintenance and updates are essential to prevent the accumulation of new technical debt. If you don’t do this consistently, you may quickly find yourself back at square one.

The foundations to tackle technical debt_

Before you tackle your technical debt, you need a rock‑solid business case that gets everyone on board — without the fluff, jargon or endless back‑and‑forth.

That’s exactly why we created Cut the Crap: Building a no‑nonsense business case, a straight‑talking video series designed to help you confidently justify your next Microsoft solution.

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