Understanding Tech Debt: What is Technical Debt And Why It Matters

In such a fast-moving arena as software development, time is everything and things need to be immediate and fast for the customer. But more often than not, companies run the risk of critical frictions in cost and productivity for the sake of speed. This is where the concept of technical debt comes in.

In the software community, the term technical debt, also known as tech debt or code debt, is often thrown everywhere. Similar to financial debt where one incurs this when something is needed urgently but full cash payment is not at one’s disposal; In software development, this means opting for sub-optimal methods and results in favor of speed in production and delivery. And much like financial debt, the cost of dealing with debt becomes higher and goes out of control the longer it remains unaddressed or neglected.

But what exactly is technical debt?

Coined by software developer Ward Cunningham in the 1990s, technical debt is a phrase that explains the ongoing cost of development decisions made in the short term for the sake of earlier software release and faster time-to-market. He described the concept as:

“Shipping first-time code is like going into debt. A little debt speeds development so long as it is paid back promptly with a rewrite. The danger occurs when the debt is not repaid. Every minute spent on not-quite-right code counts as interest on that debt. Entire engineering organizations can be brought to a stand-still under the debt load of an unconsolidated implementation, object-oriented or otherwise.”

Wikipedia defines technical debt (also known as design debt or code debt) as “a concept in software development that reflects the implied cost of additional rework caused by choosing an easy (limited) solution now instead of using a better approach that would take longer. As with monetary debt, if technical debt is not repaid, it can accumulate ‘interest’, making it harder to implement changes.” The Software Engineering Institute at Carnegie Mellon University defines technical debt as something that “conceptualizes the tradeoff between the short-term benefit of rapid delivery and long-term value.

Why should your company care about technical debt?

Regardless of interpretations in the definition, recognizing the importance of the concept of technical debt is a good starting point to gain control over it. Often, companies incur technical debt because it’s the only feasible option at their current scenario that matches market and customer demands. Over time, however, technical debt can be a bottleneck that further slows down your production-test-release cycle. Moreover, while it’s an inherent outcome of teams working in collaboration with one another to accomplish business targets, the resultant technical debt, if left unchecked, can be a difficult burden to bear for a business as it affects different levels such as on an individual, departmental, and at an organizational level.

Technical debt in agile software development is real and very significant, and manifests itself in various forms: poorly designed code, delays, reduced productivity and efficiency, delivered negative value to the customers, diminished transparency, loss of opportunity, extra unplanned costs, and so on and so forth. Costs also include both hard costs, such as headcount, rent and material, and soft costs, such as longer hours due to suboptimal code. With respect to individuals and teams, tech debt can also lead to lower morale and high turnover due to work dissatisfaction. On the organizational level, there is the risk of suffering a slower pace of innovation and increased difficulty in managing the software asset portfolio.

With the COVID-19 pandemic crisis and its strain on businesses to digitally transform, most companies are in a tight corner to deliver and market at an even more accelerated pace with greater reason. This is why it’s important to be calculating and circumspect in terms of risks and compromise levels related to cost, quality and security. Time is an expensive and valuable resource that technical debt can impinge upon over the long term.

How to steer clear of technical debt?

Technical debt is a normal part of the modern enterprise and it inevitably happens with time. Effective management of technical debt entails systematic effort and visionary thinking.

But as with most undesirable circumstances, prevention is always better than cure. Future-proofing solutions and following rigorous best practices are key to making sure technical debt is reduced. While it is sometimes necessary to expedite products and services to market, it’s critical to eliminate the debt before it becomes larger and leads to risks and further costs, as it can undermine the performance of a business and its ability to leverage digital transformation as an engine for growth and value creation.

Here are three proven ways to help you reduce and manage technical debt:

Catalogue your IT infrastructure

Having a comprehensive view of your IT stack helps you correctly identify the potential drivers of your debt load, conduct gap analysis more efficiently, resolve issues sooner, and ensure high-quality processes and end-to-end delivery.

Perform routine code reviews

Regular code reviews help you stay on top of your business goals through streamlined and advanced software development. Apart from reduced technical debt, making code reviews part of your routine provides benefits including improved code quality, shorter development and test cycles, stronger user satisfaction, among others.

Build a good architecture design

The importance of flexible, easily scalable structures cannot be overstated. As software and solutions constantly evolve to meet the rising demand for innovation, choosing the right architecture that’s sustainable can save you a lot of time, energy, and money in the long run.

As a leader in the software development industry in the Philippines, White Cloak is a reliable solutions provider that builds systems and applications based on best practices, methodologies, and regulatory frameworks, ensuring projects are successful not just within a few months but also further down the line. To help companies mitigate technical debt, White Cloak takes advantage of a combination of automation technologies that eliminates complexities and redundancy from development and delivery, enabling enterprises to improve their agility and deliver best-in-class results to their customers.