How to Navigate Technical Debt: A Guide for Business Leaders

Learn to Identify the 5 Main Types of Tech Debt — and Ways to Avoid Them

By Leon Ginsburg, Founder and CEO, Sphere Partners

Speed is everything in modern business. We race to evolve, innovate, optimize, and streamline — always seeking the latest technology to help us be faster and more agile. 

However, this constant and frenetic drive for progress can come with a hidden cost: technical debt. 

Similar to financial debt, technical debt starts to add up when you take shortcuts and make other compromises during software development or tech implementation. Those shortcuts — usually taken in order to meet tight deadlines, to address pressing business needs, or simply because one doesn’t see the potential long-term consequences — lead to various costs down the line that can greatly affect you as a business leader.

I’ll show you how to identify the five main types of tech debt, the negative effects it can have across an organization, and ways to proactively address it. At Sphere, our experienced tech executives, enterprise architects, and strategists are constantly exploring solutions to challenges surrounding tech debt, systems modernization, and transformation.

Be Aware: 5 Types of Tech Debt

It’s crucial that business leaders, especially those in tech, fully grasp the implications of tech debt as it can significantly impact an organization’s agility, innovation, and overall success.

Tech debt comes in various forms, each with its own set of challenges. Here are the five main types to look out for:

  1. Design Debt. Rushed or poorly thought-out architectural decisions can lead to design debt. Over time, this can hinder adaptability, making it more difficult to incorporate new features or technologies.
  2. Code Debt. Cutting corners in coding, such as ignoring best practices, can result in code debt. This can lead to increased maintenance, reduced software quality, and slower development cycles.
  3. Testing Debt. Insufficient testing, either due to time constraints or inadequate resources, results in testing debt. This can lead to undiscovered bugs, reduced product reliability, and increased customer dissatisfaction.
  4. Documentation Debt. Neglecting proper documentation can lead to documentation debt. This hampers knowledge transfer, makes onboarding new team members difficult, and can lead to misunderstandings down the road.
  5. Infrastructure Debt. Using outdated or suboptimal infrastructure can accumulate infrastructure debt. This often results in higher operational costs, slower performance, and security vulnerabilities.

Ways That Tech Debt Can Drag Down an Organization

Tech debt can affect everything from company culture to bottom-line performance. These are five ways that tech debt will rear its ugly head if given the opportunity:  

  • Slowed Innovation. Developers spend more time fixing issues and less time on new features, hampering the organization’s ability to stay competitive.
  • Increased Costs. Tech debt requires resources to fix, refactor, or rebuild. This can strain budgets, impacting other critical initiatives.
  • Longer Time-to-Market. Without addressing tech debt, delivering new products or features becomes slower and more challenging, potentially leading to missed market opportunities.
  • A Slip in Talent Retention. Developers working with outdated or poorly structured codebases might become disengaged, leading to attrition. Skilled developers prefer working in environments that prioritize technical excellence.
  • Customer Experience. Tech debt can translate to bugs, system failures, and downtime, ultimately affecting customer satisfaction and damaging brand reputation.

How to Proactively Address Tech Debt

Consider these four tips to reduce or eliminate tech debt at your organization before it becomes a costly burden: 

  1. Be Aware. Business leaders must recognize the existence of tech debt. Encourage a culture where developers feel empowered to communicate potential debt and its implications
  2. Prioritize. Not all tech debt is equal. Collaborate with technical teams to prioritize what debt needs to be addressed urgently and what can be managed over time.
  3. Allocate Resources. This allows you to address tech debt systematically. This might involve allocating extra time in development cycles or forming dedicated teams for debt reduction.
  4. Strategize. Consider tech debt when planning the long-term technology strategy. Balance immediate business needs with investments in technical excellence.

The Next Steps in Eliminating Tech Debt 

Tech debt is an inevitable part of technology-driven organizations, but understanding its nuances and implications is critical for smart business leaders. Addressing tech debt isn’t solely a technical decision; it’s a strategic one that impacts an organization’s ability to innovate, respond to market changes, and maintain a competitive edge. 

By fostering a culture of technical excellence, prioritizing debt reduction, and aligning technology strategies, businesses can effectively manage tech debt and pave the way for a more resilient and innovative future.

To learn more about tech debt and how Sphere can help you find and reduce it within your organization, contact our seasoned experts for a consultation.

Related Articles