Have you ever heard of the term “Technical Debt”?
Technical debt is the cost of shortcuts taken during the software development process. By taking on technical debt, companies can release software more quickly and experiment with new ideas, potentially driving innovation and growth. Technical debt can be crucial to getting your company’s product to market - however there may be long term consequences if left unaddressed or unmanaged. This is why it is very important to understand what technical debt is and how to properly utilize it.
Think of technical debt like a credit card. Just as a credit card allows you to make purchases you need now on a line of credit, taking on technical debt allows you to achieve a goal faster, but at a cost. This “cost”, similar to a credit card, will vary depending on how fast the debt is paid off versus letting the “balance” carry-over into the next cycle.
Examples of Technical Debt Include:
Foundational Limitations: This can be characterized as architectural flaws, outdated technologies, or inadequate infrastructure which could create a weak foundation for the software. For example, entering relational data into a non-relational database to save time or configuring your AWS without a load balancer or auto-scaling, it may be able to serve its purpose in the beginning but there will be the need for serious architectural change in the near future.
Hardcoding Values: The practice of directly embedding specific data or configuration settings within the code of a software application, rather than storing them in a separate, editable location. For example, if you are based in the US and you are only working with USD, you might hardcode this currency into the database. However, if your company expands beyond the US, this will then have to be re-configured to accept other currencies. This can make it more difficult to modify or update the values in the future, but in the early stages, it is helpful in saving valuable time, simplifying the process and ensuring data consistency across the project.
Manually Entering Data: Manually entering data into a database can be very time consuming and error prone, however there are many benefits when you are starting development. For example, you can have your developers manually add ten businesses into a database versus building an interface where someone could enter them in through a pre-configured process that would only be utilized once every quarter. Manually entering this data offers more flexibility so that teams can adapt to evolving requirements or needs, gives developers more control over data, and preserves valuable time and resources.
Skipping Code Documentation: In the early stages of a project, the code can evolve and change quickly as it is built, often leading to developers failing to include comments within the source code. For example, a team may prioritize rapid prototyping and iterative development to meet tight deadlines or respond to urgent business needs. Documentation might be seen as a secondary concern that can be addressed later, with the assumption that team members can communicate and understand the codebase through direct collaboration. Delaying this code documentation allows developers to prioritize functionality and document later.
Using technical debt as a strategic tool and balancing short-term gains with the possibility of long-term effects, companies can create innovative and competitive software products that will meet the needs of their users and market demands in a much shorter timeline. This is achieved by correctly managing technical debt in a way to create a product cheaper and faster initially, rather than creating a “perfect” product that would require an exponential amount of time or capital.
It's important to note that technical debt still needs to be managed carefully over time to prevent the accumulation of too much “interest”, but just like a credit card, if paid off gradually over time or by the end of every cycle, this “cost” may end up being more beneficial long-term for the growth of your product.
What Are Types of Technical Debt?
There are several types of technical debt that developers may encounter during the development process.
ARCHITECTURAL DEBT: When quick or less-than-ideal design choices are made, leading to difficulties and complications later on.
When is this used? Startups often face resource constraints, including limited funding or a small development team. Deferring architectural refinements can free up time and resources to be able to focus on core functionality, developing prototypes and getting a product to market. This enables teams to test the product, gather feedback and even secure funding.
How to Manage? Recognize and document areas of architectural debt within the system. Prioritize these alongside new features and bug fixes, evaluate the severity and potential risks associated - creating a roadmap to address them based on this. Allocate dedicated time for refactoring and architectural improvements during development cycles. Regularly monitor the system’s performance, scalability, and maintainability.
Example: A company is building a web application, the team opts for a simplistic architecture that directly connects the front-end user interface to the database, neglecting the implementation of an application layer or API. While this decision initially saves time, it leads to challenges as the application grows. The scattered business logic within the user interface code becomes difficult to maintain and modify, and the absence of an API restricts flexibility and scalability. To address this, refactoring becomes necessary by introducing a proper application layer that separates presentation and business logic, allowing for improved code organization, easier maintenance, and the ability to leverage APIs for efficient data management.
TESTING DEBT: When developers reduce or delay testing during software development to speed up the process.
When is this used? While testing your software is a crucial step in the development process, it may be more realistic to be selective and only test the core functionality. The aspects that remain untested or not tested as thoroughly can later be tested and improved upon as necessary.
How to Manage? Allocate time and resources to identify what the core and vital functionalities are, create a roadmap to effectively manage resources over time. Once that timeline is in place, review and refactor code regularly to ensure that core functionality is operational and functional.
Example: A company is building a social media platform based around posting content and commenting/interacting with each other. It is more important that you are able to post photos/videos and interact with other content creators’ posts versus being able to directly message them. Focusing on the core functionality of the product allows a team to effectively produce a product on a reasonable timeline and also keep within a certain budget.
DOCUMENTATION DEBT: The practice of delaying or neglecting the documentation of software code or processes.
When is this used? It allows developers to focus on delivering functional software quickly to customers and can also be necessary when developing experimental programs. During this process, there is an abundance of trial and error which makes constantly updating documentation cumbersome as you try to keep up with limited time available.
How to Manage? Establish documentation standards early on, specifying who takes care of what and when. Create a schedule to regularly allocate time to review; doing so will ensure a timeline is in place and that everyone is in sync when it comes to properly managing this type of debt.
Example: A development team may focus primarily on meeting tight deadlines and delivering features. As a result, they neglect documenting the development process and project requirements. This lack of documentation accumulates, making it difficult to track the evolution of the project and the rationale behind design choices. As new team members join or when issues arise, the absence of comprehensive documentation hinders effective collaboration, slows down problem-solving, and increases the risk of miscommunication.
INFRASTRUCTURE DEBT: This debt incurs when an organization fails to maintain or update its underlying technology infrastructure including outdated hardware, operating systems, or software dependencies that may no longer be compatible with the latest patches or updates.
When is this used? It accumulates over time, resulting in outdated or unstable systems that can become a liability for an organization. Addressing infrastructure debt is critical to maintain the health, stability, and security of an organization's infrastructure long term.
How to Manage? Use a cloud-based infrastructure, allocate time for maintenance, and review the infrastructure to ensure that it meets current needs as well as adaptability for the future. Creating a scalable product is necessary to keep up with a growing business that utilizes evolving technology.
Example: A development team prioritizes delivering functionality over maintaining or updating the underlying infrastructure. As a result, they accumulate infrastructure debt by neglecting necessary upgrades, patching security vulnerabilities, or scaling resources to meet growing demands and evolving needs. This debt increases the risk of system failures, security breaches, and operational inefficiencies, ultimately affecting the project's long-term stability and performance.
Why Do We Accept Technical Debt?
There are many aspects of technical debt that are worth accepting because it can drive significant change within your company or product. This can be particularly beneficial in industries where time-to-market is critical, such as in startups, where rapid iteration and experimentation are often necessary to succeed. A company might accept technical debt because it can allow for faster development, cost-savings, and innovation.
Speed
Quick Releases: Allows companies to gather user feedback and improve products faster, resulting in shorter development cycles and more reliable products.
Secure Funding: Creates a functional product within reach that can be utilized to demonstrate traction in the market.
Encourages Agility: Enabling teams to be more flexible and responsive to market demands or emerging technologies. Teams can pivot quickly and make product changes without being constrained by a rigid development process.
Scenario: A startup that needs to launch a functional mobile app fast may take on technical debt to speed up that process, in order to begin iterating on feedback and effectively demonstrate their product to investors. To achieve this, they reduced the scale of their original testing plans and hardcoded some of their data that did not need to be dynamic yet.
Cost Savings
Reduced Development Costs: Cutting corners in the development process can save money on development costs, especially in the short term.
Lower Initial Investment: Using existing infrastructure or tools that have technical debt can require less initial investment, which can be beneficial for any company.
Prioritization of Critical Features: By accepting technical debt on less critical features, startups can prioritize their limited resources on developing more important aspects of their product.
Scenario: A startup needs to use an off-the-shelf software program rather than building a custom solution from scratch, even though the off-the-shelf component may require additional work or modifications in the future. While this may create technical debt, it can help the startup achieve their immediate goals and reduce upfront development costs.
Innovation
Experimentation: Developers can try new ideas and approaches that may have been too risky or time-consuming to pursue otherwise. This can lead to the creation of new and innovative products, features, or approaches that can differentiate a business from its competitors and potentially drive growth.
Opportunity: Technical debt can also foster a culture of innovation and encourage developers to think outside the box and take risks, leading to a more dynamic and creative development process.
Competitiveness: Allows startups to compete with larger, more established companies by being more nimble and adaptable.
Scenario: A startup is developing a cutting-edge artificial intelligence (AI) product. The development team may make a conscious decision to accept technical debt to push the boundaries of what's possible with AI. This could involve using new and untested algorithms, taking shortcuts in the development process, or pushing the limits of the hardware.
How Do You Manage or “Pay Off” Technical Debt?
Deciding on whether to pay off a technical debt can depend on various factors, including the severity of the debt, the impact it has on end-users, and the potential risks associated with leaving it unpaid. Here are some steps that can help guide the decision-making process:
Identify and Prioritize
Start by identifying and categorizing the technical debts based on their severity, impact, and risk factors. Prioritize the debts that have the most significant impact on end-users and the company operations.
Document Instances and Steps Taken
Make sure to track your company’s technical debt because it helps teams understand the scope and impact of the debt on the overall system. Documentation can also help prioritize which aspects of the system need to be addressed first and ensure that the debt is not forgotten or ignored.
Evaluate the Costs and Benefits
Consider the cost and time required to address the technical debts versus the potential benefits in terms of improved software quality, user experience, and long-term stability.
Determine Urgency
Assess the urgency of paying the debt, including the potential risks and consequences of leaving it unpaid, such as system crashes or data breaches. Consider that some debts become more expensive to pay off with time.
Consider the Trade-Offs
Evaluate the trade-offs of addressing technical debt versus investing in new features or functionalities. Consider how the decision will impact the business, end-users, and other stakeholders.
Communicate and Collaborate
Involve stakeholders, including developers, project managers, and end-users, in the decision-making process. Communicate the risks and benefits of paying the technical debt and the potential impact on the business and end-users.
Allocate Resources
Allocating resources to technical debt is important to ensure the stability, reliability, and maintainability of the software product in the long term. It can prevent the accumulation of interest on technical debt, reduce the cost of fixing issues, and improve development efficiency. It also helps to ensure that technical debt is managed proactively and not left unaddressed, which can lead to larger problems down the road.
Are You Paying for Yesterday or Investing in Tomorrow?
There is always going to be a certain amount of risk when taking on technical debt, just like there is when making an important or large purchase on a credit card. What technical debt allows you to do is to act faster within your company and then slowly “pay off” this debt over time. However, it is important to note that some technical debt may never be “paid off” or it might take a while – which is acceptable as long as it is managed correctly and effectively. By prioritizing technical debt management, software companies can reduce the risk of negative consequences, while also improving the quality, usability, and functionality of their products.
Mile Marker runs proven development processes that lower negative risk and offers cost-effective implementation solutions to deliver an optimal product quickly so that your company can go “live” faster and begin gaining the traction your product deserves in the market.
To better manage your technical debt strategically, Mile Marker has created this free template so you can optimize your technical debt tracking. Enter your email to download the template below.
About Mile Marker
Mile Marker is your strategic partner for agile software development. Created for founders, by founders, we offer strategic software at startup speed. We specialize in aligning your technical work with your business goals through collaborative planning, offering a multidisciplinary development team, and ensuring ongoing support for your software. If you’re searching for a software development company or need a technical partner, start the conversation with an introductory call.
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