What is technical debt, and how do you manage it?

In software development, technical debt (tech debt) refers to the implied cost of future rework caused by choosing the quickest solution now instead of a more refined approach that would take longer.

Sometimes, software developers have no choice but to knowingly write code that doesn’t meet their usual standards. On other occasions, they may be totally unaware of coding poorly. Either way leads to technical debt. However, if managed correctly, organizations can actually benefit from it.

In this guide, you’ll learn about the causes, challenges, and types of technical debt, discover how much tech debt is acceptable, and how you can effectively manage it using monday dev.

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.

How do we measure technical debt?

There are several key metrics and approaches to measure technical debt:

• Technical debt ratio (TDR): This measures the ratio of the cost to fix the codebase compared to the cost of building it. A higher TDR indicates more technical debt. You calculate TDR as:
  • (Cost of remediation / Cost of development) x 100
• Code quality metrics: Tools like SonarQube can scan codebases to detect issues and estimate remediation time. Key metrics include:
  • Code complexity
  • Code duplication
  • Test coverage
  • Coding standard violations
• Defect ratio: This measures the number of defects or bugs relative to the size of the codebase or features.
• Lead time: The time it takes to implement and deliver new features. Increasing lead times may indicate growing technical debt.
• Change failure rate: The percentage of changes (e.g. deployments) that fail and require fixes. Higher rates can indicate underlying technical issues.
• Number of failed CI/CD builds: Frequent failures in continuous integration/deployment pipelines may point to code quality issues.
• Time to market (TTM): Measures how long it takes to deliver new features. Increasing TTM can indicate that technical debt is slowing development.
• Technical debt index: This composite metric combines various indicators into a single score.

To effectively measure technical debt, you can:

• Use a combination of metrics for a holistic view
• Track metrics over time to identify trends
• Contextualize metrics based on project specifics
• Use automated tools where possible for consistency
• Consider both code-level and organizational impact metrics

Remember that your chosen metrics should align with your specific project needs and organizational goals. Regularly monitoring and analyzing these metrics can help you proactively manage technical debt.

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 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:

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. Modernize and upgrade. Keep dependencies and frameworks up-to-date, migrate away from legacy systems over time, and invest in architectural improvements.
8. 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.

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.

What are the causes of technical debt?

Technical debt can arise from various factors, including business pressures, limited resources, poor planning, and neglecting code quality and maintenance. Here are the top 20 common causes of technical debt:

1. Poor or incomplete requirements: When requirements are not clearly defined, developers may make assumptions or take shortcuts.
2. Tight deadlines: Pressure to deliver quickly can lead to quick fixes and shortcuts.
3. Lack of expertise: Developers without sufficient knowledge may use suboptimal coding practices.
4. Legacy systems: Working with outdated software or hardware can create technical debt.
5. Changing requirements: Mid-project changes may necessitate quick fixes.
6. Poor testing practices: Insufficient testing can lead to undetected issues.
7. Inadequate documentation: Lack of proper documentation makes future maintenance difficult.
8. Lack of knowledge sharing: Poor collaboration and mentoring can lead to inconsistent practices.
9. Parallel development: Working on multiple branches simultaneously can create integration challenges.
10. Deferred refactoring of inefficient code: Delaying necessary code improvements increases future costs.
11. Lack of alignment to standards: Ignoring industry standards can lead to future integration issues.
12. Poor technological leadership: Poorly planned directives from leadership can create debt.
13. Last-minute specification changes: Late changes without proper time for implementation and testing can create issues down the line.
14. Lack of planning and design: Rushed or inadequate planning phases can lead to suboptimal architectural decisions.
15. Neglecting code maintenance: Failing to allocate time for regular code reviews and refactoring.
16. Prioritizing product-market fit over code quality: Focusing solely on features while ignoring code issues.
17. Lack of time: Tight deadlines lead to cutting corners.
18. Unexpected technical difficulties: Unforeseen technical challenges that weren’t accounted for initially.
19. Business pressure to release quickly: Prioritizing speed over quality in development cycles.
20. Technological progress: Ongoing development with the latest coding practices can render existing solutions sub-optimal.

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.

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.

Manage your technical debt with monday dev

Built on monday.com Work OS, monday dev lets you manage your product development cycle in one flexible platform. From roadmaps to sprints, you can release products efficiently, and, more importantly, circle back to address technical debt. Here’s how to make technical debt visible, trackable, and an integral part of the development process with monday dev.

Create a dedicated board for technical debt

Set up a board specifically for tracking technical debt items, and use columns to capture key information like description, priority, estimated effort, and status. Connect technical debt items to related features or sprints in other boards using the item linking capabilities.

Allocate time for debt reduction

Schedule recurring time slots dedicated to addressing technical debt. Use the timeline view and Gantt chart to visualize and plan technical debt reduction work.

Track progress and measure impact

Use status columns to monitor the progress of technical debt reduction efforts. Add custom fields to track metrics like time saved or quality improvements from addressing debt. Utilize dashboards to get an overview of technical debt status across projects.

Collaborate and communicate

Use comments and @mentions to discuss technical debt items with the team. Share views with stakeholders to keep them informed of technical debt status.

Integrate with development tools

Connect with tools like GitHub to automatically update technical debt items as developers make code changes. Streamline updates directly from your Git repository to update the status within monday dev and track progress directly through your Git dashboard.

Prioritize debt items in review meetings

Schedule recurring meetings, like daily stand-ups and retrospectives, to review technical debt status and strategy. Use priority labels or custom fields to rank technical debt items, and update priorities regularly with the development team during backlog review meetings.

Try monday dev free for 14 days to see how you can manage your technical debt holistically from one platform.