What is technical debt? A guide to managing it effectively

In software development, technical debt (or tech debt) refers to the implied cost of future rework caused by choosing an easy, limited solution now instead of using a better approach that would take longer. According to a recent report, engineers spend over 17 hours a week on maintenance issues, including dealing with technical debt, which costs businesses billions in lost productivity.

Sometimes, development teams have no choice but to knowingly write code that doesn’t meet their usual standards. Other times, they may be unaware of coding poorly. Either way leads to technical debt. However, when managed correctly, organizations can actually use it to their advantage.

In this guide, you’ll learn what causes technical debt, see real-world examples, and discover how to effectively manage it with a flexible platform like monday dev.

TL;DR: What is technical debt?

Technical debt is the implied cost of rework caused by choosing a fast solution now over a better, more time-consuming one. While it can accelerate initial delivery, unmanaged debt slows down future development, increases costs, and lowers software quality. The key is to manage it strategically by making it visible, prioritizing repayment, and using a flexible platform to track progress without hindering new work.

What is technical debt?

Technical debt, also known as code debt or design debt, occurs when development teams prioritize speed over perfect code. It’s similar to financial debt — taking shortcuts now creates “debt” that must be “repaid” later with interest, in the form of additional work.

Ward Cunningham first used the term when he described it as:

Shipping first time code is like going into debt.

Just as financial debt isn’t inherently bad if managed responsibly, you can use some technical debt strategically to move projects forward quickly.

What are the causes of technical debt?

Technical debt can arise from various factors, often stemming from a combination of business pressures, team dynamics, and technical decisions. Here’s a breakdown of the most common causes.

Business and project pressures

• Tight deadlines
• Changing requirements
• Last-minute specification changes
• Business pressure to release quickly
• Prioritizing product-market fit over code quality

Team and process issues

• Lack of expertise
• Inadequate documentation
• Lack of knowledge sharing
• Poor technological leadership
• Lack of planning and design
• Neglecting code maintenance

Technical and architectural factors

• Poor or incomplete requirements
• Legacy systems
• Poor testing practices
• Parallel development
• Deferred refactoring of inefficient code
• Lack of alignment to standards
• Unexpected technical difficulties
• Technological progress

What are the different types of technical debt?

Over the years, various experts have defined and classified technical debt. These categories provide different perspectives on technical debt, focusing on its origins, intentionality, and specific areas of impact within software development. Here’s a brief rundown of the various types.

1. Intentional vs. unintentional technical debt

In 2007, Steve McConnell proposed two types of technical debt: intentional and unintentional.

• Intentional: When a team deliberately decides to take shortcuts for short-term gains. For example, they use “quick and dirty code” to ship the product immediately, knowing they can document, track, and remedy it later.
• Unintentional: When a team accrues a debt unknowingly due to a lack of knowledge or experience. In most cases, they can still address this debt when it comes to light.

2. The technical debt quadrant

In 2009, Martin Fowler took the concept a step further when he published the “Technical Debt Quadrant.”

He classified technical debt by pairing intent — deliberate (intentional) or inadvertent (unintentional) — with context — prudent or reckless.

• Deliberate and reckless: Knowingly cutting corners to ship quickly.
• Deliberate and prudent: Controlled debt with awareness of consequences.
• Inadvertent and reckless: Debt due to lack of knowledge/experience.
• Inadvertent and prudent: Realizing better solutions after delivery.

3. Additional categories

Other software practitioners have offered further categorizations.

• Environmental debt: Accrued over time without active effort (e.g., outdated systems).
• Unavoidable technical debt: Due to factors beyond the team’s control.
• Bit rot technical debt: Progressive devolution of software into complex systems.

4. Specific types of technical debt

In 2014, a group of academics proposed categorizing technical debt by its nature rather than intent.

• Architecture debt: Issues in product architecture.
• Code debt: Problems in source code affecting readability and maintenance.
• Design debt: Violations of good software design principles.
• Documentation debt: Lack of proper code documentation.
• Test debt: Insufficient testing leading to potential bugs.
• Build debt: Issues making the build process harder.
• Defect debt: Known defects not immediately addressed.
• Infrastructure debt: Problems in development infrastructure.
• People debt: Issues with staff training or distribution.
• Process debt: Inefficient processes.
• Requirement debt: Gap between optimal requirements and implementation.
• Service debt: Inappropriate web services.
• Test automation debt: Work needed to automate testing.

Real-world technical debt examples

To make the concept more concrete, let’s look at some real-world examples of technical debt. These are common scenarios where teams might choose a shortcut that creates debt they’ll need to repay later.

Hardcoding values

A developer needs to set a tax rate in a new e-commerce feature. Instead of building a system to fetch the rate from a central configuration file (which would take longer), they hardcode the value “8.5%” directly into the feature. This is fast, but when the tax rate changes, developers have to hunt down and manually update every instance, creating rework.

Skipping automated tests

To meet a tight release deadline, a team decides to skip writing comprehensive unit and integration tests for a new module. The feature ships on time, but this creates test debt. Without an automated safety net, future changes are riskier, and any new defects or bugs will be harder and more time-consuming to find and fix.

Monolithic architecture

A startup builds its application as a single, monolithic block. This is simpler to launch initially. However, as the company grows, this architectural debt makes it difficult to scale, update, or deploy individual features without affecting the entire system. Breaking it into microservices later will be a massive, costly project.

Postponing dependency upgrades

A project uses several third-party libraries. A new version of a critical library is released with security patches and performance improvements. The team decides to postpone the upgrade to focus on new features. This creates security and maintenance debt, as the application becomes more vulnerable and falls further behind the latest standards.

What are the challenges and problems with technical debt?

Technical debt poses several significant challenges and problems for software development teams and organizations.

Reduced development speed and agility

Technical debt slows down the development process over time. Although the original coding may have been quick, teams spend more time dealing with existing issues rather than developing new features as debt accumulates. This reduced development velocity makes it harder to respond quickly to changing business needs or market demands.

Increased costs

The longer technical debt remains unaddressed, the more expensive it becomes to fix. Like financial debt, technical debt accrues “interest” over time, requiring more resources and effort to resolve issues as the codebase grows and becomes more complex.

Lower quality and reliability

Technical debt often leads to lower software quality, increased bugs, and reduced product reliability. Shortcuts and quick fixes can introduce vulnerabilities and instabilities into the system, negatively impacting the user experience and potentially damaging the company’s reputation.

Difficulty scaling and innovating

As technical debt accumulates, scaling applications or introducing new features becomes increasingly challenging. The existing codebase may be too rigid or poorly structured to accommodate growth or innovation efficiently.

Security vulnerabilities

Unaddressed technical debt can lead to security issues. Outdated systems, unpatched vulnerabilities, or poorly implemented security measures can expose applications to potential attacks.

Maintenance challenges

Technical debt makes ongoing maintenance more difficult and time-consuming. Poor documentation, complex or outdated code, and lack of standardization can make it hard for developers to understand and modify existing systems.

Architectural limitations

Architectural technical debt (ATD) has been identified as particularly damaging. It can limit application scalability, impact resiliency, and constrain an organization’s ability to adapt to changing technology and user requirements.

Reduced team morale

Constantly dealing with the consequences of technical debt can be frustrating for development teams. It can lead to decreased job satisfaction and potentially higher turnover rates among skilled developers.

How to manage and reduce technical debt

Managing and reducing technical debt requires an ongoing proactive approach, including regular assessments, prioritization of debt repayment, and the implementation of best practices in software development and DevOps processes. In other words, consistent small improvements over time can have a bigger impact than a one-time effort. Here are some key strategies for managing and reducing technical debt:

• Prioritize and track technical debt. Create and prioritize a backlog of technical debt items based on impact and urgency, and track metrics like technical debt ratio and code quality scores.
• Allocate time for debt reduction. Set aside dedicated time in sprints to address technical debt. Aim for a balance between new feature development and debt reduction — e.g. 80% of sprint time for new development and 20% for debt reduction.
• Refactor incrementally. Break large refactoring tasks into smaller, manageable chunks. Apply the Boy Scout Rule— leave code better than you found it — so you can refactor as you go when working on related code.
• Improve code quality practices. Implement code reviews and pair programming (i.e. two people working together to design, code, and test user stories), follow coding standards and best practices, increase test coverage with unit and integration tests, and use static code analysis tools.
• Communicate and educate. Make technical debt visible in reporting and planning and explain the impact of technical debt to stakeholders. Train team members on how to identify and avoid technical debt.
• Prevent new debt. Define the “Definition of Done” to include quality criteria, allow sufficient time for proper implementation, and avoid taking shortcuts to meet deadlines.
• Modernize and upgrade. Keep dependencies and frameworks up-to-date, migrate away from legacy systems over time, and invest in architectural improvements.
• Automate where possible. Implement CI/CD pipelines to streamline the software delivery process and use automated testing and code quality checks. In DevOps, employ infrastructure-as-code (IaC) practices to provision the same environment every time.

How to justify technical debt repayment to stakeholders

One of the biggest hurdles for development teams isn’t fixing the debt-it’s getting the buy-in to do so. Business stakeholders often prioritize new, revenue-generating features over what seems like invisible maintenance work. To get them on board, you need to speak their language.

Frame it as a business problem, not a technical one

Instead of saying, “We need to refactor the legacy codebase,” say, “Fixing this will increase our feature delivery speed by 25% over the next quarter.” Connect the debt to metrics that matter: development velocity, time-to-market, customer satisfaction, and operational costs.

Visualize the impact

Use data to tell a story. Show how the bug rate has increased over time or how development on new features has slowed. A platform with customizable dashboards can help you create reports that clearly show the rising cost of inaction, making the problem impossible to ignore.

Connect it to the product roadmap

Show how addressing technical debt is a prerequisite for upcoming features on the product roadmap. For example, “To build the new AI-powered recommendation engine, we first need to upgrade our database infrastructure. It’s a necessary step to support the project’s goals.” This frames debt repayment as an enabler, not a distraction.

Propose a clear plan

Don’t just present the problem; present the solution. Propose allocating a specific percentage of each sprint (e.g., the 80/20 rule) to debt repayment. This shows you have a manageable, predictable plan that won’t halt all new development. This approach is a core part of effective sprint planning.

Ready to build your business case? Use our pre-built dashboard to track and report on technical debt.

What are the benefits of technical debt?

Technical debt can offer some positive strategic benefits when managed carefully.

• Faster time to market: Technical debt allows teams to deliver products or features more quickly by postponing specific optimizations or improvements. This can be valuable for businesses looking to establish themselves in new markets or fast-track certain technologies.
• Validation of ideas: Taking on some technical debt enables companies to launch minimum viable products (MVPs) faster, allowing them to validate concepts and get user feedback before investing more resources.
• Meeting critical deadlines: In some cases, incurring technical debt can help teams meet tight deadlines for critical features, keeping projects on track.
• Flexibility in development: Planned technical debt allows developers to make quick decisions when necessary, rather than always opting for the most time-consuming, optimized solution.
• Resource allocation: By strategically taking on technical debt, companies can allocate resources to higher-priority tasks or features that provide immediate value to customers.
• Learning opportunities: Technical debt can provide valuable learning experiences for development teams, helping them understand the consequences of certain decisions and improve future planning.
• Competitive advantage: In fast-moving industries, the ability to quickly release new features or products (even with some technical debt) can provide a competitive edge.

It’s important to note that these benefits primarily apply to planned technical debt, where the team is aware of and accountable for the consequences. The key to effectively leveraging technical debt is to measure it, manage it carefully, and plan to address it in the future. This approach allows businesses to balance short-term gains with long-term sustainability.

How much technical debt is acceptable?

There’s no definitive answer for how much technical debt is acceptable — it depends on the specific organization, project, and context. For example, what’s acceptable for a startup may be unacceptable for an established enterprise. The key is finding a balance between speed, quality, and cost that benefits your business in the long run.

Here are some suggestions for maintaining acceptable levels of technical debt in your organization:

Apply the 80-20 rule

The 80-20 rule suggests that 80% of time and resources should be spent on new features and technologies, while 20% should be allocated to reducing or managing technical debt.

Balance the debt with business needs

Some debt is inevitable and can be strategically useful, especially for startups developing MVPs or companies meeting critical deadlines. But overall, technical debt should balance with business needs.

Document your decisions

The key is to make technical debt visible, understood, and managed through informed decisions. Well-documented and tracked debt is easier to control.

Manage the most impactful debt

Addressing the most problematic parts can significantly decrease costs, while minor issues in rarely used features may not be worth fixing or can wait until later. So, focus on managing the most impactful debt.

Maintain the debt

Implement strategies to keep technical debt at acceptable levels, such as:

• Reserving a fixed percentage of developers’ time for debt repayment
• Setting and adhering to debt tolerance benchmarks
• Using quiet periods in development to address debt

Regularly refactor code, conduct code reviews, and use automated testing tools to prevent debt accumulation.

Remember: Acceptable technical debt is understood, documented, and actively managed in the development process.

How to manage technical debt with a flexible platform (without slowing down)

Managing technical debt effectively requires more than just good intentions-it requires a system that provides visibility and flexibility without slowing your team down. While rigid tools like Jira can make debt tracking feel like another siloed chore, a flexible Work OS like monday.com lets you build a process that works for your team. With monday dev, you can make technical debt visible, trackable, and an integral part of your development process.

Enable team ownership with flexible backlogs

Empower your team to “Run Your Way” by creating a dedicated board for tracking all technical debt items. Unlike rigid systems, you can customize columns to capture key information like priority, estimated effort, affected features, and status. Use the item linking capabilities to connect debt items to your main sprint boards, ensuring that repayment work is always visible and can be prioritized during backlog review meetings.

Gain manager visibility over execution

Managers need full visibility into progress without micromanaging. With monday dev, you can use customizable dashboards to get a real-time overview of technical debt across all projects. Track metrics like the number of open debt items, time spent on repayment, and quality improvements. This data is crucial for justifying resource allocation and reporting progress to stakeholders.

Bridge the engineering and business ecosystem

Technical debt doesn’t exist in a vacuum. monday dev helps you connect your development work to the broader business. Use integrations with tools like GitHub to automatically update debt items as code changes are made. Share board views and dashboards with product, marketing, and leadership teams to keep everyone informed and aligned. This transparency ensures that technical decisions are understood in the context of business goals.

Stop letting technical debt slow you down. Build a flexible process to manage it with monday dev.