Is Technical Debt Holding You Back? Here’s How to Spot and Fix It

While many companies understand the importance of technology in meeting their strategic goals, the silent killer of technology modernization efforts—technical debt—often stands in their way. It quietly accumulates with every shortcut in code, every outdated process, and every missed update, eventually slowing down innovation and scaling costs.

Let’s explore technical debt, why it matters, and how to recognize when it’s becoming a serious liability. From intentional shortcuts to outdated infrastructure and documentation gaps, we break down its many forms and provide insight into how businesses can manage and reduce it.

What is technical debt and why should you care?

Technical debt refers to the cost of shortcuts or compromises made in software development processes to meet deadlines or other short-term goals. Just as financial debt can cripple individuals and organizations, technical debt—can hinder growth and innovation at your company. 

Today, technologies continue to advance, and companies strive to deliver more innovative and competitive software products. Amid these conditions, technical debt can accumulate quickly, impeding operational agility, scalability, and overall software quality.

The two faces of technical debt: Intentional vs. Accidental

One important aspect of understanding technical debt is recognizing that it can be intentional, accidental, or both.

When it is intentional, development or IT teams take on technical debt as a strategic choice to meet tight deadlines or to deliver a product more quickly to gain a competitive advantage. The expectation is that the debt will be addressed and repaid later.

However, with accidental technical debt, unforeseen challenges, or lack of knowledge may be the root cause. For example, developers can inadvertently or accidentally introduce technical debt while trying to navigate changing requirements or unexpected technical constraints quickly. Or maybe because they don’t understand the full scope of the problem they’re trying to address.

9 common types of technical debt you should know

Technical debt can silently accumulate across various layers of your software ecosystem, affecting performance, scalability, and innovation. Understanding its different types is the first step toward identifying, managing, and ultimately reducing its long-term impact.

Architecture debt

Relates to compromises made in the overall structure of a system, leading to challenges in scalability, performance, or future enhancements.

Infrastructure debt: 

Involves shortcomings in the underlying infrastructure, such as outdated servers or dependencies, that affect the system’s stability.

Design debt: 

Refers to compromises in the overall design of a system that impact its maintainability, extensibility, and overall quality.

Code debt: 

Involves shortcuts taken within the codebase, leading to suboptimal or inefficient solutions that may require refactoring in the future.

Test automation debt:

Occurs when automated testing processes are neglected or become outdated, compromising the efficiency of software testing.

Documentation debt: 

Occurs when documentation is neglected or becomes outdated, making it challenging for developers to understand and maintain the system.

People debt: 

Emerges from challenges in team dynamics, communication, or skill gaps, which impact the overall productivity and effectiveness of the IT team.

Process debt: 

Relates to deficiencies in development processes, such as inadequate testing procedures or suboptimal project management practices.

Requirement debt: 

Arises when essential requirements are not adequately defined or are subject to frequent changes, leading to scope creep and project delays.

Security debt: 

Refers to accumulation of vulnerabilities and flaws in your organization’s software and systems that could result in breaches.

In a recent McKinsey survey, leaders reported that 10 to 20 percent of the technology budget is diverted to resolving issues related to tech debt. More troubling is the fact that the tech debt amounts to 20 to 40 percent of the value of their entire technology estate before depreciation. And for larger organizations, this translates into hundreds of millions of dollars of unpaid debt. 

This not only hampers their ability to focus on further product development, new features, and enhancements, but also diminishes a company’s ability to remain innovative and competitive in a fast-paced market.

Signs that tech debt is hurting your organization 

There are signs that a company’s tech debt has tipped the balance of acceptability and is holding them back.

We will point out the most common signs that indicate tech debt is hitting a critical level. While not exhaustive, these are helpful indicators to watch out for. It can help you address tech debt before it causes major setbacks further down the road.

Less automation and increased manual intervention: 

• Less automation and more human effort in day-to-day processes indicate technical debt. 
• Compared to automated procedures, manual operations are frequently error-prone and time-consuming. This can result in higher expenses and a reduction in efficiency. 

Unresolved security vulnerabilities: 

• The accumulation of unresolved security issues over time is a sign of technical debt
• This involves, using unsafe practices, storing sensitive data insecurely, incorrectly configuring systems, postponing software updates, etc

Increase in downtime or bugs:

• If your organization frequently faces downtime issues, it’s a sign of technical debt. 
• Likewise, frequent errors, especially those that are difficult to fix or create new issues, can strongly indicate technical debt. 

Difficulty in scaling and lack of adaptability: 

• Technical debt may be indicated if a company has trouble growing its software system. 
• It also arises from your system’s inability to change and adapt to new needs. 

High maintenance costs, budget overruns, and missed deadlines: 

• A high-maintenance budget that keeps growing indicates technical debt. 
• Projects that frequently miss deadlines or incur budget overruns may be the result of technical debt. 

Managing technical debt: Why it’s a continuous process

Escaping the tech debt cycle is not easy. Knowing where and how to start is a serious challenge. A poorly sequenced approach can easily result in time and money spent without much change to the tech debt profile. The operational side of the house may be overwhelmed by the task and want to delegate the problem to the tech team. However, both sides will need to work together to identify solutions that allow the organization to compete and build value.

Effective management of debt involves prioritizing, planning, and implementing strategies to reduce the negative impact of accumulated technical debt. This includes tracking debt, understanding its root causes, and implementing practices like continuous refactoring and automated testing to prevent future debt. Categorizing debt into types (intentional, unintentional, and bit rot) can also help in prioritizing and addressing it. 

According to Gartner, those companies that approach technical debt management in a systematic and active way can deliver results up to 50 percent faster.

However, there is no one perfect formula for resolving tech debt. Each company needs to handle tech debt based on its goal and the company culture.  Short-term wins are easy to have but long-term work involves much more effort.

Moreover, one should not aim to wipe out technical debt in a single massive release. The strategy to manage technical debt should revolve around fixing and releasing in continuous small batches. Practically speaking, these releases can, in fact, bundle multiple local tech-debt fixes. Your release management strategy should also promote visibility into fixes and their relationship with other projects and releases as well.

In brief:

Tech debt is one of those terms that lacks a strict definition—maybe it doesn’t even have one at all. It really varies depending on the company, the team, and even the individual. However, the general idea remains consistent: All the corners you cut for a quick fix today will eventually become a massive headache tomorrow. Think of it like financial debt—you might borrow a little now, but later you will be paying it back, often with interest.