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What is technical debt? How to pay it off (with examples)

Team Asana contributor imageTeam Asana
June 25th, 2024
8 min read
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Technical debt is the cost of additional work caused by choosing the quickest solution rather than the most effective solution. Though there are times when technical debt is worth it, it’s important that your team understands the positives and negatives of speedy decisions and how to manage rework in an efficient way. Product managers, programmers, and other stakeholders should carefully consider the trade-offs involved. In this article, we explain what technical debt is, share techniques to avoid debt, and take a look at how to differentiate between valuable vs. non-valuable decisions.

Working in the product space often requires quick decisions about software features. If you’ve ever worked in a DevOps team, you know just how many decisions are needed to push features live. These choices can impact the codebase, user experience, time to market, and more.

Technical debt is the term used to describe the result of making decisions based on speed above all else. These quick, real-time decisions can make or break software updates. But there should be a balance between good decisions and fast ones. Incurring tech debt can result in negative outcomes or be well worth it, depending on what you and your team decide. It's not always a bad thing, but too much debt decreases maintainability and code quality.

In this article, we’ll discuss the definition of technical debt, how to effectively manage quick decisions in the development process, and share examples to give you a better understanding of how to avoid future mishaps. We'll cover topics like refactoring, automation, metrics, code reviews, and aligning with business needs.

What is technical debt?

Technical debt is the price of additional rework resulting from selecting the quickest solution rather than the most efficient one. Software developer Ward Cunningham first used the phrase in 1992, but it has since evolved.

Today, technical debt, also known as tech debt and code debt, usually occurs when development teams choose to write speedy code while building new features of a software development product. Speedy code delivery can help your team meet deadlines, and the debt you accrue may be worth it, though it could also lead to negative outcomes if managed incorrectly. These negative outcomes aren’t always avoidable once the decision to accrue technical debt has been made. 

Whether you’re experiencing a good or bad outcome, we’ll go over the important facts about technical debt so you’re prepared to make the right decisions in the moment.

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Is technical debt bad?

Much like financial debt, technical debt can be utilized in both good and bad ways.

In some instances, tech debt is the result of a calculated move to both meet software deadlines and ship high-quality code within sprints. In other instances, technical debt is the result of an unavoidable mistake made when releasing a software update.

Read: Release management: 5 steps of a successful process

What causes technical debt?

There are four different causes of technical debt, referred to as the technical debt quadrants. The four technical debt quadrants, coined by Martin Fowler, include reckless, prudent, deliberate, and inadvertent. These quadrants help team members and stakeholders understand the different types of debt that can accumulate in the codebase.

Assigning technical debt to these four quadrants helps gauge intent and background on code issues. While some code debt may be deliberate and classified as good debt, other debt, like quick fixes and bad code, may be inadvertent and classified as bad debt.

The technical debt quadrants
  1. Prudent and deliberate: The decision to ship quickly and deal with the consequences later causes prudent and deliberate debt. This type of debt is most commonly used when the stakes in the software project are relatively low and the benefits of a quick delivery outweigh the risk. It's a conscious trade-off to improve time to market.

  2. Reckless and deliberate: Knowing how to produce the best code but prioritizing speedy delivery over it is the cause of reckless and deliberate debt. This often leads to legacy code that is harder to maintain. 

  3. Prudent and inadvertent: Prudent and inadvertent debt happens when there’s a desire to produce the best code, but you find a better solution after implementation. Automated testing and other methodologies can help catch this earlier.

  4. Reckless and inadvertent: Reckless and inadvertent debt occurs when a team tries to produce the best code without the necessary knowledge to do so. The team is often unaware of the mistakes they’re making. This can introduce vulnerabilities and maintainability issues.

Teams choose deliberate technical debt for the sake of speedy delivery, while inadvertent debt is accidental—it happens after implementation. This difference is best described by software engineer Steve McConnell when describing the two overall types of technical debt. Understanding these quadrants is key to managing debt across development cycles. Let’s dive into each of these to gain a better understanding.  

Types of technical debt

Steve McConnell, Chief Software Engineer at Construx Software, suggested that there are two types of technical debt: intentional and unintentional.

Types of technical debt

1. Intentional technical debt

Intentional debt occurs when an organization makes a conscious decision to optimize for the present rather than for the future. Business needs and pressure from stakeholders like product managers and CIOs to deliver features quickly are frequently the driving forces behind this.

There are both short-term and long-term variations of intentional debt. For example, intentional debt accrued to pay off a former design debt is short-term debt, while an intentional debt accrued to prevent a larger future documentation debt would be a long-term debt. 

  • Short-term debt: Short-term debt is incurred reactively, for tactical reasons such as to use existing resources. Additionally, short-term debt can be focused or unfocused. Team members may take on short-term debt to quickly deliver bug fixes or other improvements to the user experience.

  • Focused short-term debt: This includes individually identifiable shortcuts. 

  • Unfocused short-term debt: This includes numerous tiny shortcuts. Over time, this can really slow down development cycles.

  • Long-term debt: Long-term debt is incurred proactively, for strategic reasons such as to meet a deadline. Automation and refactoring efforts often fall into this category.

As you can see, the type of debt accrued will dictate how long it will take to pay it off.

2. Unintentional technical debt

On the other hand, unintentional technical debt happens due to a lack of understanding, accidental mistakes, or—in some cases—poorly written code. An example of unintentional technical debt would be a design approach that turns out to be error-prone. Regular code reviews can help catch these issues earlier.

We can assume unintentional technical debt is accidental, as the team did not incur it on purpose. Most commonly, you will only realize your mistake after you implement the software update or complete the project. 

Read: 27 business success metrics you should be tracking

How to measure technical debt

Measuring technical debt is necessary for software development teams to understand the extent of their code debt and make informed decisions about managing it. By quantifying tech debt, teams can prioritize refactoring efforts and ensure their codebase remains maintainable and scalable in the long run.

Metrics and tools

Various metrics can be used to assess the amount of technical debt in a software project. These include code complexity, duplication, test coverage, and maintainability indexes. Tools such as SonarQube, CAST, and Kiuwan can automate the measurement process, providing valuable insights into the health of your codebase.

Assessment best practices

When assessing technical debt, it's essential to involve all stakeholders, including developers, product managers, and business leaders. Regular code reviews and debt metaphor discussions can help raise awareness and foster a shared understanding of the impact of tech debt. Prioritizing debt based on its ability to impede development cycles, functionality, and user experience is key to effective assessment.

How to pay off tech debt

While you may accrue some technical debt intentionally, many product teams struggle to track and communicate tech debt. This can result in more work than anticipated when looking to solve the gaps in software code. 

This step-by-step guide will help you pay off technical debt and create greater workplace transparency around debt load. 

Step 1: Identify and prioritize your technical debt 

The first step in paying off technical debt is to identify and prioritize the areas of your codebase that need attention. This involves analyzing metrics, conducting code reviews, and gathering input from team members. Prioritize debt based on its impact on functionality, maintainability, and business needs.

  • Maintain a debt list within a tracking system. Each time you incur debt, enter the tasks needed to pay off that debt into your tracking system, along with an estimated effort and schedule. Use the debt backlog to track your tech debt progress. Any unresolved debt more than 90 days old should be treated as critical.

  • If you're using Scrum, maintain the debt list as part of your Scrum product backlog, treating each debt as a Scrum "story" and estimating the effort and schedule to pay off each debt—the same way you estimate other stories in Scrum.

Step 2: Refactor and optimize your code

Once you've identified the high-priority technical debt, it's time to start refactoring and optimizing your code. This may involve breaking down complex functions, eliminating duplication, improving naming conventions, and updating outdated frameworks. Avoid shortcuts and quick fixes, as they can lead to more debt in the long run.

Step 3: Establish coding standards and best practices

To prevent the accumulation of new technical debt, establish clear coding standards and best practices for your development team. This includes guidelines for code structure, commenting, testing, and documentation. Encourage team members to follow these standards consistently and provide training and support as needed.

Step 4: Continuously monitor and address new debt

Technical debt is an ongoing concern, and it's essential to continuously monitor and address new debt as it arises. Regularly assess your codebase using metrics and tools, and incorporate debt management into your development process. Consider adopting methodologies like Scrum or DevOps to support continuous improvement and debt reduction. 

Read: Efficiency vs. effectiveness in business: Why your team needs both

Technical debt examples and solutions

Now that you have an understanding of managing technical debt and some of the causes behind unintentional and intentional debt, let’s review some real-life examples. 

Technical debt examples

Example 1: Intentional technical debt

  • Description: The team chooses a framework that is fast to build on, has known performance issues and has minimal functionality capabilities.

  • Solution: The team uses additional applications for post-software implementation that feature the missing framework functionality.

  • Debt: Though they met the product deadline, the team will need to rework the features after launch and will require additional funds.  

Example 2: Unintentional technical debt

  • Description: The team has many junior developers helping to launch a new software feature on a tight deadline, with not enough senior developers to review each piece of the code. 

  • Solution: The team hires additional temporary support from senior developers to look over the code and check for proper functionality. 

  • Debt: While the team caught most of the issues, the miscommunication between full-time staff and temporary support caused oversight on some missed bugs in the code. This means the team will need to debug these issues post-launch. 

As you can see, while different, both intentional and unintentional debt will need to be paid off over time. By brainstorming a solution to technical debt, you can ensure your software updates launch on time with little debt accrued. 

Manage your technical debt with transparency

Debt isn’t always avoidable when working on a software product launch. From tough decisions to mistakes in code, Agile teams know how the amount of technical debt accrued can affect software updates. 

The key to paying off debt is to maintain and track incremental payments. While the type of debt payoff is different in each scenario, team transparency and communication can help you pay off your debt faster. This is because enhanced clarity on Agile projects can enforce a collective solution to the problem at hand.

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FAQ: Technical debt

What is technical debt in Scrum?

In Scrum, technical debt refers to the accumulation of work that needs to be done in order to maintain and improve the quality of the software product. It arises when the development team makes conscious decisions to prioritize speed over quality or when they incur debt unknowingly due to a lack of experience or knowledge. In Scrum, technical debt is often represented as backlog items that need to be addressed in future sprints.

Is technical debt good or bad?

Tech debt is not inherently good or bad; it depends on how it is managed. In some cases, taking on technical debt can be a strategic decision that allows the team to deliver value faster. However, if left unchecked, technical debt can lead to increased maintenance costs, reduced productivity, and even project failure. Therefore, it is crucial to strike a balance between incurring and paying off technical debt.

What are the common causes of technical debt?

Common causes of technical debt include tight deadlines that force the team to take shortcuts, a lack of coding standards and best practices, insufficient testing and documentation, and the use of outdated or incompatible technologies. Other factors, such as team turnover and lack of communication, can also contribute to the accumulation of technical debt.

How can tech debt impact a project?

Technical debt can have a significant impact on a project's success. As the amount of debt increases, the codebase becomes more complex and difficult to maintain, leading to longer development cycles and increased bug fixes. This, in turn, can delay the delivery of new features and negatively affect the user experience. In extreme cases, technical debt can render a project unfeasible, requiring a complete rewrite of the codebase.

How can technical debt be prevented?

Preventing technical debt requires a proactive approach that involves the entire development team. This includes establishing and adhering to coding standards and best practices, conducting regular code reviews, and prioritizing testing and documentation. Agile methodologies, such as Scrum, can also help prevent technical debt by encouraging frequent feedback and continuous improvement. Additionally, allocating time in each sprint to address technical debt can help keep it under control.

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