Thu May 02 2024
Founders & Tech Leaders

How to Manage Technical Debt: The Most Realistic Impact - Solved

Tazeen Fatima
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Software development organizations often face the challenge of delivering features and functionalities quickly to meet goals. However, in a rush to meet immediate delivery deadlines, they end up in a loop of technical debt, wasting 23 to 42% of their development time and 20% of their budget for producing new products on resolving existing tech debt issues. But that’s not it! There are several other negative impacts of technical debt.

In this article, we will explore the severity of technical debt and how it can impact your business. We’ll have a look at how companies tackle technical debt and discuss strategies to calculate, manage and avoid technical debt.

Let’s get started!

What is Technical Debt?

Technical debt refers to the costs incurred when software developers take shortcuts or make compromises in the development process, leading to suboptimal code quality, design, or architecture. These shortcuts or compromises may be intentional or unintentional. They may arise due to various factors, such as time constraints, pressure to deliver features quickly, lack of resources, or limited understanding of the best practices that we will cover later on in detail. Just like financial debt, technical debt accumulates over time and can result in increased costs and risks in the future if not properly managed.

Types of Technical Debt

Technical debt can manifest in various forms, and understanding these types can help in identifying and managing them effectively. Some common types of technical debt include:

1. Code Debt:

This type of technical debt arises from poor coding practices, such as writing complex or redundant code, not following coding standards, or neglecting code documentation. It can result in code that is difficult to understand, maintain and modify, leading to increased effort and time required for future development and maintenance.

2. Design Debt:

Design debt occurs when there are compromises in the overall system architecture or design principles. It may involve shortcuts taken to meet deadlines, inadequate system design, or lack of proper modularization and abstraction. This can lead to a system that is rigid, difficult to extend or modify and prone to technical issues.

3. Testing Debt:

Testing debt arises from inadequate or insufficient testing practices, such as skipping proper testing due to time constraints or lack of resources. It can result in undetected defects or vulnerabilities that can impact software quality and stability, leading to increased maintenance efforts and potential business risks.

4. Documentation Debt:

Documentation debt occurs when there is insufficient or outdated documentation for the software system, making it challenging for developers and stakeholders to understand the system's functionality, configuration, or usage. This can result in decreased productivity, increased effort in understanding the system and potential miscommunication or misunderstanding.

The Impact of Technical Debt on Software Development

The impact of technical debt on software development can be significant and can affect various aspects of the development process, including:

Increased Maintenance Efforts:

Technical debt can result in code that is difficult to understand, modify, or maintain, leading to increased effort and time required for ongoing maintenance. This can result in higher costs and decreased productivity as developers struggle to navigate through complex or poorly documented code, fix defects, or make changes to meet evolving requirements.

Reduced Software Quality:

Technical debt can compromise software quality by leading to suboptimal code, design, or testing practices. This can result in the accumulation of defects, vulnerabilities and performance issues, which can impact the reliability, security and performance of the software system. Poor quality software can lead to increased customer complaints, decreased user satisfaction and potential business risks.

Slower Development Pace:

Technical debt can slow down the development process as developers need to spend additional time addressing code complexity, design flaws, or testing gaps. This can result in delays in delivering new features, meeting deadlines, or responding to changing business requirements, impacting the overall development pace and agility of the software project.

The impact of technical debt on development time.png


Higher Technical Risks:

Technical debt can introduce technical risks to the software system, such as dependencies on outdated libraries or frameworks, outdated technologies, or lack of proper documentation. These risks can increase the potential for system failures, security breaches, or performance issues, posing risks to the stability, security and reliability of the software system.

Increased Technical Debt Over Time:

Technical debt can accumulate over time if not managed proactively, leading to a snowball effect where the effort required to address technical debt increases exponentially. This can result in a backlog of technical debt that becomes harder to tackle, leading to long-term impacts on the software development process and hindering the ability to meet future goals and deadlines.

Decreased Team Morale:

Over 50% of engineers believe their companies do not deal with technical debt well, indicating a widening divide between engineers and leadership. Technical debt can create frustration and stress among development teams, as they may struggle with complex, poorly documented, or error-prone code. This can lead to decreased team morale, lower job satisfaction and even employee turnover, which can further impact the productivity and success of the software development project.

Limited Flexibility and Scalability:

Technical debt can restrict the flexibility and scalability of the software system, making it difficult to adapt to changing business requirements or handle increased loads. This can result in limitations in the system's ability to evolve, expand, or integrate with other systems, potentially hindering the organization's growth and competitiveness.

Negative Customer Impact:

Technical debt can have a direct impact on customers, as it can result in software that is unreliable, insecure, or lacking in features. This can lead to customer dissatisfaction, decreased user adoption and potential loss of customers, impacting the business's reputation and revenue.

Higher Total Cost of Ownership (TCO):

Technical debt can increase the overall total cost of ownership (TCO) of the software system over its lifecycle. The costs associated with addressing technical debt, such as refactoring code, redesigning systems, or fixing defects, can add up over time, resulting in higher maintenance and support costs and reducing the return on investment (ROI) of the software project.

Reduced Innovation and Competitiveness:

Technical debt can hinder the ability of organizations to innovate and stay competitive in the market. Resources that could have been allocated to developing new features or exploring new technologies may be consumed by addressing technical debt, resulting in reduced innovation and competitive advantage in the fast-paced and ever-evolving field of software development.

Negative Impact on Short-Term and Long-Term Goals

The impact of technical debt can be seen in both short-term and long-term goals of software development projects.

Short-Term Goals

Technical debt can have a direct impact on short-term goals in software development. For instance, accumulating technical debt by taking shortcuts or neglecting proper design and testing practices to meet immediate deadlines may result in increased maintenance efforts, reduced software quality and higher technical risks. This can lead to increased defects, customer complaints and decreased user satisfaction, hampering the achievement of short-term goals.

Long-Term Goals

Technical debt can also significantly impact long-term goals in software development. Neglecting long-term goals such as refactoring legacy code, modernizing technologies, or establishing robust development practices due to time or resource constraints may result in increased technical debt over time. This can hinder the overall health and sustainability of the software system, impacting its performance, security, scalability and maintainability, making it difficult to achieve long-term goals.

The Importance of Balancing Technical Debt Management with Short-Term and Long-Term Goals

Balancing technical debt management with short-term and long-term goals is a critical aspect of effective software development. Short-term goals often involve meeting immediate business needs, delivering features to customers and achieving project milestones. Long-term goals, on the other hand, focus on the sustainability, maintainability and scalability of the software product over time.

Managing technical debt requires finding the right balance between short-term and long-term goals. On one hand, prioritizing short-term goals without addressing technical debt can lead to the accumulation of technical debt, which may result in increased maintenance costs, reduced software quality and decreased productivity in the long term. On the other hand, solely prioritizing long-term goals, such as refactoring or complete rewrites, may result in delays in delivering value to customers and meeting business objectives in the short term.

Causes of Technical Debt

Technical debt can arise from various causes, including:

Time Constraints:

Pressures to meet tight deadlines and deliver software quickly can lead to taking shortcuts or compromising on code quality, design, or testing practices, resulting in technical debt.

How technical debt slows down project progress.png


Resource Limitations:

Limited availability of resources, such as skilled developers, testing infrastructure, or documentation tools, can lead to inadequate practices or neglect of important tasks, resulting in technical debt.

Lack of Knowledge or Experience:

Inexperienced or poorly trained developers may lack awareness of best practices or have limited knowledge of optimal coding, design, or testing techniques, leading to technical debt.

Changing Requirements:

Rapidly changing business requirements or evolving technologies may result in ad-hoc changes to the software system, leading to accumulated technical debt over time.

Organizational Pressures:

Organizational pressures, such as a focus on short-term goals or a lack of emphasis on software quality, can result in technical debt as developers prioritize meeting immediate goals over long-term stability and maintainability.

Technical debt can arise from various types and causes. It is crucial to identify and manage them proactively to prevent negative impacts on software development projects. Being aware of the types of technical debt and their causes can help development teams and organizations take proactive measures to effectively manage technical debt and strike a balance between short-term and long-term goals in software development projects.

How to Identify Technical Debt?

Identifying technical debt is an important step in managing it effectively. Here are some approaches that can help you identify technical debt in your software development projects:

1. Code Review

Conducting regular code reviews by experienced developers can help identify potential technical debt. Look for code that is overly complex, lacks proper documentation or comments, has poor error handling, or deviates from established coding standards. These may indicate areas where technical debt has been accumulated.

2. Automated Code Analysis

Utilize automated code analysis tools that can scan your codebase for potential technical debt. These tools can identify code smells, such as duplicated code, long methods, or large classes, which can indicate areas where technical debt may exist.

3. Testing and QA

Rigorous testing and quality assurance processes can help uncover technical debt. Look for recurring defects, high bug counts, or unstable features that may indicate underlying technical debt in the form of insufficient testing, poor design, or lack of proper error handling.

4. Performance and Security Analysis

Regularly assess the performance and security of your software system. Performance issues, security vulnerabilities and outdated dependencies may indicate technical debt that needs to be addressed.

5. Feedback from Users and Stakeholders

Solicit feedback from users and stakeholders of your software system. They may provide insights into areas where the software is not meeting their needs, experiencing usability issues, or lacking essential features, which may indicate the presence of technical debt.

6. Tracking Technical Debt

Maintain a record of known technical debt items and track them in a dedicated technical debt backlog or issue tracking system. This can help you identify, prioritize and address technical debt in a systematic and organized manner.

7. Review of Development Practices

Evaluate your development practices, such as coding standards, documentation, testing and deployment processes, to identify areas where technical debt may be accumulating due to shortcuts or inadequate practices.

8. Review of Third-Party Dependencies

Assess the third-party libraries, frameworks and dependencies used in your software system. Outdated or unmaintained dependencies may introduce technical debt in the form of security vulnerabilities or compatibility issues.

Why is Prioritizing and Managing Technical Debt Critical?

Technical debt directly impacts the success of software development projects. Ignoring or neglecting it can lead to increased development costs, reduced software quality, decreased productivity and compromised long-term sustainability. Unaddressed technical debt can accumulate over time, making it more challenging to maintain and enhance the software system, resulting in higher maintenance costs and increased risks of defects, performance issues and security vulnerabilities.

By prioritizing and actively managing technical debt, organizations can ensure that their software development projects are on a solid foundation, with a maintainable and scalable codebase that can support their short-term goals while aligning with their long-term vision.

How to Measure Technical Debt?

The right way to solve a problem is to first determine its severity. In the case of technical debt, various metrics and tools can help you measure and monitor it. Let’s examine the most effective ones.

  • Defect Ratio:

It tracks new bugs identified versus closed ones. A high ratio, for example, 2:1 (twice as many new bugs identified as closed ones), indicates technical debt is hindering code quality. More bugs are likely cropping up due to underlying issues in the codebase caused by technical debt, such as copy-pasted code or poorly designed modules.

Screenshot 2024-05-02 at 5.18.01 PM.png

A low ratio means that bugs are being addressed successfully. Whereas a high defect ratio means that new bugs are coming up faster than they are being solved.

  • Lead Time:

It measures the time taken from committing to a feature to its release. Increased lead time can signal technical debt slowing down development.  For instance, if a simple feature consistently takes a month to implement due to workarounds and fragile code caused by technical debt, it would indicate a problem. The best way to improve it is by automating the processes.

  • Debt Index:

It helps you understand how much technical debt you have per line of code. Screenshot 2024-05-02 at 5.16.10 PM.png

Imagine a codebase with 10,000 lines of code and a technical debt remediation effort estimated at 200 hours. The Debt Index would be 0.02 (200 hours / 10,000 lines of code), indicating 2 hours of technical debt per 100 lines of code.

  • Code Coverage:

This metric indicates the percentage of your codebase that is covered by automated tests. High code coverage suggests areas less likely to harbor technical debt. Code that is well-tested is less prone to hidden issues and regressions that can arise from technical debt.

Screenshot 2024-05-02 at 5.19.39 PM.png

If your codebase has 80% code coverage, it means 80% of your code is exercised by automated tests. This suggests a lower risk of technical debt lurking in those well-tested areas.

  • Technical Debt Ratio (TDR): How to calculate Technical Debt Ratio for measuring technical debt

It compares the cost (in time or money) of fixing technical debt to the original development cost. A high TDR signifies a bigger burden relative to the initial investment.

For example, if it would take $1200 to fix technical debt and the original development cost was $30,000, the TDR would be 4%. This indicates that 4% of the original investment would be needed to address technical debt.


  • Choose Your Metrics: Select metrics that align with your project's goals.
  • Gather Baseline Data: Establish a starting point by measuring your chosen metrics.
  • Monitor and Analyze: Track metrics over time to identify trends and areas needing attention.
  • Prioritize and Repay: Based on your analysis, prioritize technical debt items that provide the most significant ROI.



Tools to Measure Technical Debt - Our Top 5 Picks!

According to data gathered from multiple resources, we have enlisted these most preferred technical debt measurement tools:

1. SonarQube

Tools to Measure Technical Debt - SonarQube

SonarQube is a comprehensive static code analysis tool that goes beyond syntax errors. It identifies code smells, potential bugs, security vulnerabilities, and code duplication. It also provides code coverage metrics and integrates with various programming languages and CI/CD pipelines.

Cost: SonarQube offers a free Community Edition with limited features and paid plans starting from $160 a year with additional functionalities like advanced reporting and security analysis.

Rating: ★★★★☆ SonarQube is a powerful and versatile tool, especially for larger projects or teams working with multiple programming languages.

2. Stepsize

Tools to Measure Technical Debt - Stepsize

Stepsize takes a unique approach to technical debt measurement. It analyzes code commits and identifies changes that introduce technical debt indicators like increased code complexity or reduced maintainability. This allows you to track technical debt trends over time and pinpoint specific code changes that might have introduced debt.

Cost: Stepsize offers a free plan with basic features and paid plans that go up to $49 a month for each user with additional functionalities like historical trend analysis, priority support and code ownership insights.

Rating: ★★★☆☆ Stepsize offers a different perspective on technical debt measurement, but its focus on code changes might not be suitable for all projects.

3. TeamScale

Tools to Measure Technical Debt - TeamScale

TeamScale is a comprehensive solution that combines static code analysis, code reviews, and surveys to assess technical debt and team health. It provides insights into code quality, maintainability, and potential risks. Additionally, it facilitates team discussions and helps identify areas for improvement.

Cost: TeamScale offers custom pricing based on your specific needs. E.g. for upto 5 users, it offers a pricing of €110 per user a month.

Rating: ★★★★☆ TeamScale provides a holistic view of technical debt, but its custom pricing structure might not be ideal for smaller teams or budget-conscious projects.


4. Code Climate

Tools to Measure Technical Debt - Code Climate

Code Climate is another static code analysis tool that focuses on code quality and maintainability. It offers insights into code coverage, duplication, complexity, and potential security issues. It also integrates with various platforms like GitHub and GitLab, providing actionable feedback directly within your development workflow.

Cost: Code Climate offers a free plan with limited features and paid plans starting at $20 per month with additional functionalities like priority support and unlimited private repositories.

Rating: ★★★★☆ Code Climate is a user-friendly and well-integrated option for developers familiar with Git-based workflows.

5. Jira

Tools to Measure Technical Debt - Jira

While not a dedicated technical debt measurement tool, Jira, a popular project management platform, can be leveraged to track and manage technical debt. You can create technical debt tickets, estimate the effort required to fix them, prioritize them alongside features, and track progress over time.

Cost: Jira offers a free plan with limited features and paid plans that go up to $12.48

per user a month with additional functionalities like user management and custom workflows.

Rating: ★★★☆☆ Jira's flexibility makes it a good fit for teams already using it for project management. However, it lacks some of the advanced features of dedicated technical debt measurement tools.

11 Most Effective Strategies for Managing Technical Debt

Technical debt management requires a proactive approach and a combination of strategies tailored to the specific context of the software development project. Here are some of the common strategies:

1. Establishing a Technical Debt Management Process

Establishing a formalized process for managing technical debt is crucial to ensure that it is proactively addressed throughout the software development lifecycle. This process should include identifying, tracking and managing technical debt items in a systematic manner. It may involve creating guidelines, documentation and tools to help teams identify and manage technical debt effectively. This process should be integrated into the overall development process to ensure that technical debt is not overlooked or ignored.

2. Refactoring

Refactoring involves making targeted and incremental changes to the codebase to improve its design, structure and maintainability without changing its external behavior. This strategy aims to address technical debt by systematically improving the quality of the codebase, reducing complexity, eliminating duplication, improving documentation and adhering to coding standards. Refactoring is typically done as part of regular development activities, such as during bug fixes or feature enhancements, to gradually pay off technical debt and improve the overall quality of the codebase.

3. Incremental Improvements

This strategy involves prioritizing and addressing technical debt in small, manageable increments over time. It involves identifying and prioritizing specific technical debt items, such as legacy code, outdated dependencies, or poor error handling and addressing them one by one as part of regular development sprints or iterations. This approach allows teams to balance short-term goals with long-term goals and make steady progress in reducing technical debt without disrupting ongoing development activities.

4. Complete Rewrites

In some cases, technical debt may be so severe that a complete rewrite of the software system is necessary. This strategy involves rebuilding the software system from scratch, using modern technologies, best practices and lessons learned from the existing system. While a complete rewrite can be time-consuming and costly, it can be a viable strategy when the existing system has accumulated significant technical debt and is no longer maintainable or scalable.

5. Regularly Assessing and Prioritizing Technical Debt

Regularly assessing and prioritizing technical debt is essential to determine which items should be addressed first based on their impact on the software system. This assessment should be done collaboratively by involving relevant stakeholders, such as developers, product owners and business stakeholders, to ensure that the prioritization aligns with short-term and long-term goals. It may involve conducting technical debt assessments, code reviews and other techniques to identify and prioritize technical debt items based on severity, impact and urgency.

6. Solid Planning

Creating a plan for managing technical debt is critical to ensure that it is addressed in a systematic and organized manner. This plan should outline the steps to address technical debt, including specific tasks, timelines and resources needed. It should also include mechanisms for tracking progress, reviewing and updating the plan regularly and making adjustments as needed. This plan should be communicated to the development team and other relevant stakeholders to ensure alignment and accountability.

7. Education and Training

Improving the skills and knowledge of the development team can also be an effective strategy for managing technical debt. Providing education and training opportunities, such as workshops, seminars, or online courses, can help team members learn best practices, coding standards and techniques for managing technical debt. Equipping the team with the necessary skills and knowledge can empower them to proactively address technical debt during development activities and make informed decisions to minimize its accumulation.

8. Continuous Integration and Automated Testing

Implementing continuous integration and automated testing practices can also help in managing technical debt. Automated testing can catch defects and issues early in the development process, reducing the risk of accumulating technical debt. Continuous integration can ensure that code changes are regularly integrated and tested, reducing the chances of introducing new technical debt. These practices can help teams catch and address technical debt in a timely manner, avoiding its accumulation.

9. Educating Stakeholders on the Impact of Technical Debt

Educating stakeholders, including business leaders, product owners and other non-technical team members, on the impact of technical debt is essential to create awareness and support for managing technical debt effectively. This may involve explaining the consequences of accumulated technical debt, such as increased maintenance costs, reduced software quality and decreased productivity and the potential risks and challenges it can pose to the success of the software product. Educating stakeholders helps in garnering their support and buy-in for prioritizing and addressing technical debt items.

10. Incorporating Technical Debt Management into Project Planning and Budgeting

Incorporating technical debt management into project planning and budgeting is crucial to ensure that it is given due consideration and that resources are allocated for addressing it. This may involve estimating the effort required to handle technical debt items and including them in the project timeline and budget. It may also involve setting aside dedicated time and resources to address technical debt as part of regular development cycles or sprints. By incorporating technical debt management into project planning and budgeting, it becomes an integral part of the development process and ensures that it is not overlooked or sidelined.

11. Collaboration and Communication

Collaboration and communication among team members are crucial for managing technical debt effectively. Encouraging open communication, sharing knowledge and fostering a culture of collaboration can help teams identify and address technical debt early on. Regular team meetings, code reviews and discussions can facilitate the identification of technical debt items and their resolution through collective efforts.

Use a Technical Debt Register Template for Technical Debt Management

Technical Debt Register Template

A technical debt register template is a structured document used to identify, classify, assess, prioritize, track, communicate, and document technical debt within a software project. It helps teams manage technical debt more effectively by providing a centralized tool for understanding, addressing, and mitigating the impact of technical debt on the project's quality, development speed, and future maintenance efforts.

Use This Technical Debt Register Template

The Role of Technical Debt in Agile Software Development

In Agile software development methodologies, such as Scrum or Kanban, the concept of technical debt plays a significant role. Technical debt is considered as work that needs to be done in the future to fix issues or improve the quality of the codebase due to shortcuts or compromises made during development to meet short-term goals. In Agile, the focus is on delivering value to customers through iterative and incremental development. However, technical debt can accumulate over time as the team may prioritize delivering features quickly over addressing underlying technical issues.

Managing technical debt is an essential aspect of Agile development to ensure the long-term sustainability of the software product. Agile teams need to be mindful of the technical debt they incur and proactively address it during the development process. This may involve setting aside time for refactoring, addressing technical issues as part of sprint or iteration goals and involving relevant stakeholders in decision-making processes related to technical debt. Agile teams need to strike a balance between delivering features quickly to meet short-term goals while managing technical debt to avoid negative impacts on the quality, maintainability and scalability of the software system in the long term.

An Efficient Business Operation Model for Tech Debt Paydown


How to Avoid Technical Debt?

Completely avoiding technical debt is not possible. However, apart from following the above-mentioned strategies and best practices, there is one more step that you can take to reduce technical debt i.e. hiring highly experienced developers.

Remotebase offers well-experienced developers within 24 hours who can significantly reduce the risk of technical debt in software development. Our rigorously vetted developers possess knowledge of best practices, the ability to identify and resolve issues early on, sound decision-making, mentorship and guidance, a proactive approach to refactoring and a quality-oriented mindset. They are well-equipped to prevent the accumulation of technical debt. They follow industry best practices, make informed decisions about technology stack and design patterns, actively invest in code improvement and instill good coding practices in the team.

It is important to note that technical debt can still arise due to various factors and it's crucial to have effective processes and strategies in place to manage and address it, regardless of the level of experience of the development team.


Managing technical debt is crucial for successful software development projects. Organizations need to strike a balance between short-term goals and long-term sustainability while actively addressing technical debt.

With the metrics mentioned above, you can now measure technical debt. With the case studies and the best practices highlighted, you can better manage technical debt and ensure the success and quality of your software products.

Frequently Asked Questions

How can technical debt impact software development projects?

Technical debt can impact software development projects by leading to increased maintenance costs, reduced productivity, longer time-to-market, lower software quality, increased risk of bugs and vulnerabilities and decreased overall agility and flexibility in adapting to changing requirements.

How can organizations balance managing technical debt with short-term and long-term goals?

Organizations can balance managing technical debt with short-term and long-term goals by establishing a technical debt management process, regularly assessing and prioritizing technical debt, creating a plan for managing technical debt, educating stakeholders on the impact of technical debt and incorporating technical debt management into project planning and budgeting. By striking a balance between addressing immediate needs and investing in long-term software quality, organizations can effectively manage technical debt and ensure the success of their software development projects.

Why is it important to involve stakeholders in technical debt management?

Involving stakeholders in technical debt management is crucial as it helps them understand the impact of technical debt on software development projects. By educating stakeholders about the risks and consequences of technical debt, they can better appreciate the need to address it. Additionally, involving stakeholders in the decision-making process for prioritizing and managing technical debt helps align their expectations, priorities and resources, leading to more effective management of technical debt in software development projects.

Can technical debt be completely avoided in software development projects?

It is challenging to completely avoid technical debt in software development projects as it may arise due to various factors such as time constraints, budget limitations, changing requirements and trade-offs made during development. However, organizations can effectively manage and mitigate technical debt through proactive strategies, processes, and best practices, as well as by hiring experienced developers to reduce technical debt.

Can hiring experienced developers help avoid technical debt?

Hiring experienced developers can reduce the risk of technical debt by leveraging their expertise in best practices, early issue identification, sound decision-making, mentorship and a proactive approach to refactoring. Experienced developers follow coding standards, make informed decisions about technology stack and design patterns, invest in code improvement and instill good coding practices in the team, helping prevent the accumulation of technical debt. However, it's important to note that technical debt can still arise due to various factors, regardless of the team's experience level.

Reduce the Risk of Technical Debt with Expert Developers

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