How to Reduce Technical Debt – a Guide for CTOs [2024]

Introduction

Technical debt seems like a compromise between faster delivery and high quality.

Often it makes a business and development team more flexible, but the key is to repay the technical debt on time. Otherwise, it can have serious consequences.

Learn how to deal with technical debt and how to prepare preventive processes for the future.

What is meant by technical debt?

What is technical debt?

Technical debt (also referred to as code debt) is the consequence of decisions that prioritize speed of delivery and release over the highest quality of the code. It's the implied cost of rework and refactoring in the future that results from choosing an easier solution at the moment.

The term often refers to the cost of incurring and later refactoring the code, not to the code itself.

Technical debt and financial debt

If you are wondering what is technical debt, and come to think whether it is something like financial debt, you’re right. The term is metaphorically associating software development with financial debt, where interest is extra work one has to do later on for coding quickly now.

Is tech debt always bad?

Some amount of technical debt is inevitable, and it can be used as a valuable tool when the ultimate quality of the code isn't critical or when time is.

But the intention of repaying technical debt on time is what differs good technical debt from bad one.

For example, Minimum Viable Products most often come with code debt, but it's not a problem as long as the team plans to improve them.

<span class="colorbox1" fs-test-element="box1"><p>A tech debt used properly can give a company more flexibility and improve the execution speed. </p></span>

Technical debt - classification

In search of ways how to deal with technical debt, one could start by answering what type of technical debt is at hand. Because it isn’t only related to coding – it can happen at any development stage.

Bad code, and therefore tech debt, can be produced by skilled programmers who are under pressure. Many IT leaders stick to the 4-type classification of technical debt, proposed by Martin Fowler, a ThoughtWorks Chief Scientist, and Tech Author. He stacks two categories together - reckless/prudent and deliberate/inadvertent, to describe all possible scenarios.

There’s also a simpler version, distinguishing 3 basic types – intentional (a deliberate decision), unintentional (outdated design, new features, etc.), and software entropy (deterioration of performance over time). While the first two of these aren’t too grave, you should, indeed, avoid the latter. You can also break technical debt into design debt, code debt, documentation debt, etc.

‍

Causes & types of technical debt

When technical debt occurs

Though that’s a conscious debt, or an informed decision if you will, technical debt can also be created unknowingly or unintentionally. Leaving no annotations to the code, old and not addressed bugs, or no automated test, for example.

In most cases, technical debt occurs because a development team needs to meet deadlines. Another problem comes from legacy code and using frameworks and libraries that easily become outdated.

When a team struggles with constant changes, high customer expectations, changing requirements, new cyber threats, and developer turnover - team leaders often struggle with tech debt brought on by that.

Typical causes of technical debt

Key reasons for technical debt:

• Poor (or no) upfront definition, when design and development process starts without requirements set, to save time.
• Insufficient information on how to find the best technical solution for a problem. Creating quick solutions to test them with users later.
• Deadlines/pressure that prioritize release over diligent completion of all tasks.
• Changing business goals that make the chosen solutions obsolete.
• Lack of knowledge about technical debt, and thus making faulty decisions.
• Lack of code documentation and/or testing procedures.
• Technology evolution and delaying the modernization.
• Poor technological leadership, poor collaboration between team members, lack of standards throughout the organization.
• Delays in code refactoring, as often it has to be updated due to project evolution but is postponed for now, for tomorrow, for next week.
• Budgetary issues/restrictions.
• Insufficient processes and culture built around using the best code practices, and not emphasizing the necessity of testing and test automation.

Technical debt - red flags

1. Legacy Code and Technologies: Using outdated technologies or programming languages can limit the app's ability to integrate with modern systems, leading to increased security risks and decreased performance.
2. Lack of Documentation: Inadequate or outdated documentation makes it difficult for new developers to understand and work on the app, leading to potential errors and inefficiencies.
3. Frequent Outages or Performance Issues: Regular crashes or performance issues can indicate underlying problems in the app's codebase, which may be due to technical debt.
4. Complex and Unmaintainable Code: Overly complex code or a codebase that has become difficult to maintain due to various patches and fixes can be a sign of significant technical debt.
5. Security Vulnerabilities: An accumulation of unresolved security vulnerabilities can be a major red flag, especially in a financial app where data security is paramount.
6. Poor Scalability: Difficulty in scaling the app to accommodate more users or transactions can indicate underlying architectural problems, often arising from technical debt.
7. Inconsistent Coding Standards: Lack of consistent coding standards and practices can lead to a disorganized and inefficient codebase, making maintenance and updates more challenging.
8. Delayed Updates and Feature Releases: If updates and new features are consistently delayed, it might indicate that the team is struggling with a complex and debt-ridden codebase.

How can technical debt impact your business?

According to a report created by Stepsize, technical debt is not only causing quality issues, but also slows down the pace of development and impacts developers' morale. Developers often feel like they are forced to prioritise new features over vital maintenance work.

Why is it important to reduce technical debt?

Reducing technical debt on time is crucial because accumulated code debt poses a risk not only to a product itself but also to the whole business.

When a technical debt is not properly managed, it can entail financial risks like increased costs and decreased productivity, but also security-related problems decreased usability of a product, and losing customers unsatisfied with software full of bugs.

Effects and risks of technical debt

Technical debt must be paid off in a timely manner and as planned. The more the team postpones it, the harder it is to deal with the problem which creates a domino effect.

Ignored technical debt can bring consequences like:

• increased number of bugs,
• higher development cost,
• security issues,
• decreased usability.

Financial effects of technical debt

Technical debt can have a seriously negative influence on business in various ways:

• losing customers which are not satisfied with buggy software,
• increasing development costs because of the delays and increased number of developers needed to deal with the problem,
• decreasing productivity of developers because many of them are engaged in repaying tech debt,
• increased customer support costs, related to leaving customers unsatisfied,
• increased security risks which can cause various financial trouble.

<span class="colorbox1" fs-test-element="box1"><p>Need some help? Check out this ranking of top legacy system modernization companies.</p></span>

Managing technical debt

There are several processes and techniques to keep technical debt under control, including:

• defining and tracking debt,
• prioritizing debt tasks,
• agile development approach,
• regular meetings of owners, managers, and engineers,
• setting coding standards,
• instituting code/design/test reviews,
• automated tests,
• code refactoring.

Managing technical debt has two key aspects – preventing technical debt from accumulating – efforts to identify it, be aware of it and implement certain procedures, and repaying debt – prioritizing, incentivizing quality work, refactoring, etc. Thus, the concept is not all about restraining technical debt from incurring. Start with defining it.

In some cases, refactoring the code will no longer suffice as the technical debt escalated to the point where rewriting the product from scratch is more cost- and effort-effective. In addition, some decades-old enterprise-grade technologies, like C or .NET, are updated every year/couple of years. If your app uses one of the older versions, upgrading to a new one might be your way to reducing the technical debt. In November 2021, Microsoft released .NET 6, which brought critical improvements.

Preventing technical debt

Defining technical debt

The first step is the clear definition and overall awareness about technical debt. In many cases, there is a different understanding by programmers and managers of what is technical debt. Often, debt, changes in code, and adding new features are mixed up. Team meetings or training sessions to discuss technical debt, as well as to work out processes to manage it are good practices.

Train the collective ability to identify technical debt with signs like faulty code, overlapping technologies, bugs of various levels of threat. The definition of “done” should also be understood unanimously, if possible. Regardless is it a planned, unintentional, or unavoidable technical debt you’re dealing with, everyone should grasp the consequences if it is abandoned.

Tracking technical debt

As the team must return at some point to those put aside tasks, it is crucial not to delay it for too long. The time and resources you’ll have to spend for rework equal to the interest in financial debt.

As technical debt has no clear metrics to track it, experts recommend making a list of deferred tasks, informing everyone about it, and scheduling regular times to “pay it off”.

However, you can use metrics like a number of bugs or a number of failed CD and CI.

Agile development approach

Inherently close to tracking, there’s an argument for the Agile approach to help deal with technical debt. The Agile environment, with frequent iterations of work, features, and bug fixes delivered, can be an alternative way to manage technical debt. Small chunks of work could help deal with debt in an ongoing manner.

It is sound, of course, to keep a backlog of deferred tasks. To repay the technical debt through the Agile approach, the definition of “done” and test automation might be helpful as well in the long run. Agile teams perceive job “done” as ready for release, which in regards to technical debt means strict supervision.

Regular meetings of owners, managers, and engineers

One other key thing in technical debt prevention – communication, cannot be omitted. Developers and managers should talk frankly and openly, especially because IT managers are also prone to mistakes. It is crucial to include deferred tasks in the next sprints planning, not just in an issue tracker.

You also have to motivate staff to maintain quality work, or even reward it. Measuring the number of delivered features or bugs fixed is just an example of both motivation and tools to tackle technical debt. Such team culture will encourage code reviews, proper testing, mutual help, and good practices.

DevOps helps to avoid technical debt

DevOps culture and environment are helpful in avoiding technical debt. Continuous development, testing, and the integration of operations and development make it harder to ignore technical challenges as well as make decisions and solve problems having the business goals in mind.

Step-by-step preventive plan for a financial app - case study

Preventing technical debt in a financial application requires a comprehensive approach that focuses on best practices in software development, continuous evaluation, and maintaining high standards of code quality and security. Here's a step-by-step plan tailored specifically for the financial sector:

Step 1: Establish clear development standards

1. Define Coding Standards: Establish clear coding guidelines to ensure consistency and maintainability.
2. Adopt Security Protocols: Given the sensitive nature of financial data, integrate robust security measures from the outset.

Step 2: Implement rigorous planning and design

1. Conduct Thorough Requirement Analysis: Understand the financial sector's specific needs, regulations, and customer expectations.
2. Design with Scalability in Mind: Plan for future growth and integration capabilities to avoid overhauling the system later.

Step 3: Foster a quality-first development culture

1. Encourage Code Reviews: Regular peer reviews help catch potential issues early.
2. Promote Test-Driven Development (TDD): Write tests before coding to ensure each functionality is fully tested.

Step 4: Invest in Continuous Integration and Deployment (CI/CD)

1. Automate Testing and Deployment: Implement CI/CD pipelines to streamline testing and deployment, ensuring rapid and reliable delivery.

Step 5: Prioritize documentation and knowledge sharing

1. Maintain Comprehensive Documentation: Keep documentation updated to help new team members and ensure continuity.
2. Facilitate Regular Knowledge Transfer: Conduct regular sessions where team members share insights and knowledge about the system.

Step 6: Regularly review and refactor code

1. Schedule Code Refactoring: Regularly refactor code to improve efficiency and reduce complexity.
2. Address Technical Debt Proactively: Identify and address technical debt in regular development cycles.

Step 7: Stay updated with industry trends and compliance

1. Monitor Regulatory Changes: Stay abreast of changes in financial regulations and ensure compliance.
2. Adopt Latest Technologies Judiciously: Evaluate and integrate new technologies that align with business goals and regulatory requirements.

Step 8: Incorporate user feedback and market research

1. Gather User Feedback: Regularly collect and analyze user feedback for insights into potential improvements.
2. Conduct Market Research: Stay informed about the evolving needs of the financial sector to anticipate changes and adapt the app accordingly.

Step 9: Plan for scalability and integration

1. Build for Interoperability: Ensure the app can easily integrate with other financial systems and services.
2. Optimize for Performance: Regularly monitor and optimize the app’s performance, especially under high transaction loads.

Step 10: Foster agile and adaptive project management

1. Implement Agile Methodologies: Adopt an agile approach for flexibility and rapid response to changes.
2. Allocate Time for Managing Technical Debt: Dedicate a portion of the development cycle to addressing and reducing technical debt.

<span class="colorbox1" fs-test-element="box1"><p>Need some help? Check out this ranking of top fintech software development companies.</p></span>

How to detect a growing technical debt?

When a technical debt grows big, it becomes hard to deal with, slows down your speed to market, and just becomes costly.

There are metrics you can track to detect a growing technical debt on time:

• Code coverage percentage and code coverage per feature.
• A number of failed CI or CD builds (if it increases, your codebase may be unstable).
• A number of new bugs per week or month (it allows you to track the quality of code).

Reducing technical debt

An effective approach to technical debt reduction is crucial.

Moving on to the “repaying” aspect, it might be activities ranging from urgent temporary fixes to refactoring the whole structure of the code. Refactoring is one of the most frequently advised methods of how to deal with technical debt. At some point, it becomes inevitable, in fact, and we’ll get back to it in a moment.

Setting coding standards

Set procedures and schedules in motion in order not to let technical debt build up. Similar to financial debt, you have to plan pay-off periods to reduce the debt, which means scheduled days or hours when the team is doing the clean-up. A popular practice is doing it piece-by-piece, instead of trying to rid the whole debt at once.

Bottom line: plan, predict, pay.

Instituting code/design/test reviews

Another technique for technical debt is testing and code reviews. As critical as testing for the software development process, is a culture of code reviews. No matter how much and how rigorous testing you conduct, an independent fresh look can help spot missed typos, bugs, edge cases, etc.

Automated tests

An integral part here is automated tests. 99% of engineers agree this is the best way to avoid bugs. In essence, automated testing is a bunch of individual tests – as automated scripts, to double-check the code and validate the system in its entirety.

Apropos, one of the universal rules is making legacy code understandable because you’ll get legacy code no matter what. Organized, clean, and apprehendable code will not leave new developers baffled when they get to it months or years later. As “to-do” is a sort of programmers’ inside joke, and different developers have different coding styles, a source control system could be a handy artifact, providing a history of changes and explanations.

And naturally, in some cases, there is no need to repay technical debt. It is simply not worth the effort when debt is related to prototypes, experimental projects, systems approaching termination, or migration from a legacy system to a new one.

Refactoring

Adding a few lines of code here or there to fix a bug or to add a new unplanned feature is a common thing. It then accumulates, your codebase becomes messy and, eventually, you’ll just have to restructure the code to make it orderly.

This is called refactoring, and you’ve probably seen it many times in relation to technical debt. In fact, as soon as the project has been designed and launched, refactoring becomes the only way to reduce technical debt. It can speed things up, though as in any sizeable code there is always a place and reason for refactoring, the key is to do it in the right places.

Often both project managers and developers are reluctant to code refactoring, because, in their words, it doesn’t fix bugs, it is too risky and takes time, or the existing code works fine. So, before doing it, you better get everyone “on the same page” about it. When all recognize the value of refactoring, as well as acknowledge the technical debt, there’s a chance of a positive outcome.

Few tips:

• Welcome regular minor refactoring to implement best practice design patterns.
• When a code is easy to read (names describe the purpose), refactoring may be simply renaming classes/methods/variables or re-organizing them.
• Encourage engineers who have a “better way” ideas.
• Don’t do it prematurely – not all refactoring have to be done before the v1.0 is released.
• Branching the codebase, as a kind of refactor, might be helpful in some cases – consider assigning some time to developers for it.

<span class="colorbox1" fs-test-element="box1"><p>Discover how this development team prioritized technical debt and refactored their code without disruptions on production and the whole project.</p></span>

Reducing technical debt - how to start?

• Categorize tech debt by separating it into good and bad ones. That allows you to prioritize which issues to cover first.
• If the issue is big, call all hands on deck.
• Choose metrics to measure the impact - like application crash data or the number of bugs. These metrics will help you to check if you're successfully getting rid of the tech debt.

Reducing existing technical debt with Agile

The iterative development approach that lies in the basis of Agile, promotes the quality and helps to maintain it at a consistent level.

Defining "done" as ready to release is one way to increase the code quality.

Also, a Product Owner (or another role that keeps the finger on a pulse of planning the scope of work for a particular sprint) can help a team by reducing the scope of the release, prioritizing, and by that, not compromising quality.

It's crucial to manage technical debt consciously

Technical debt isn’t necessarily a bad thing, it just has to be a conscious decision.

Facilitate awareness and accountability about technical debt among team members. Backlog any incomplete or deferred tasks, regardless of type, significance, or development stage – prioritize and complete them. Use tools for visibility and control over technical debt.

And remember that is crucial to track technical debt, plan to repay it, and do it on time.