What Is Technical Debt? Definition, Meaning and Types

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What Is Technical Debt?

Technical debt definition:

Technical debt (also known as tech debt or code debt) happens when development teams rush to deliver a piece of functionality or a project, only to have to modify it later. Put another way; it’s the effect of favoring speed over perfection in coding.

This programming theory has its roots in technical debt, which sounds like a financial phrase. In the software development industry, we use the term all the time. It’s also known as “code debt” or “tech debt,” a more concise and catchy phrase. Whatever you want to name it, it’s a part of our everyday life.

Stay with us if you’d want to learn more.

Tech debt may appear to be a negative thing, and it is in many circumstances. Still, it may be a beneficial tool for moving development forward rapidly when needed and when correctly handled.

Tech debt happens when a developer rushes production using easy-to-implement, sub-optimal code or design solutions. The team must then return to this product (at some time) to add more functionality or change the code.

“Left uncontrolled, technical debt will ensure that the only work that gets done is unplanned work!” 

Ward Cunningham, a software developer who is the father of developing the wiki and being a writer of the Agile Manifesto and others, created the term “technical debt.”

Examples of Technical Debt:

Two real-life examples of planned and unintentional technical debt below provide a clear understanding.

Example 1: Technical debt that is prudent and deliberate

  • Technical debt: A rigid framework.
  • Reason for debt: Management sets a tight timetable to get to market rapidly and take advantage of the “first movers” advantage.
  • Debt Description: Developers pick a framework that is easy to use but has known concerns with adaptability.
  • Debt payback: Refactoring the software to make it more versatile.

To accomplish an early launch, the team, in this case, chooses a framework with known flaws. Developers return to restructure components and fix code bugs once the organization achieves its goal.

Example 2: Hasty and unintentional technical debt

  • Technical debt: Poorly written code.
  • Reason for debt: Insufficient coding experience.
  • Debt Description: The developers lack coding expertise, so the team produces low-quality code to meet a short deadline.
  • Debt payback: Problematic code is being cleaned up and rewritten.

In this instance, technical debt results from low skill rather than a deliberate decision. The team releases a product with flaws that increase cloud expenses and churn. The only way to repay debt is to rebuild the code with a more experienced developer.

What Are the Types of Technical Debt?

There are as many different varieties of technical debt as there are different definitions of technical debt. For years, software developers have been looking for innovative ways to define and explain technical debt.

  • Deliberate technical debt (also known as active debt) happens when a firm intentionally delays the resolution of an issue to meet a predetermined goal (e.g., shipping an MVP to users to raise funds or get a proof-of-concept).
  • Inadvertent technical debt (also known as passive debt) occurs through chance or carelessness, such as selecting the incorrect platform or creating coding errors.

In 2007, Steve McConnell proposed that technical debt divides into deliberate and accidental. Intentional technical debt, according to him, is technical debt that is taken on purposefully as a strategic instrument. In contrast to unintended debt, which he refers to as “the non-strategic result of poor performance.”

Martin Fowler took McConnell’s concept a step further and released the “Technical Debt Quadrant” a few years later. Based on both goal and context, this quadrant attempts to define technical debt into four types.

Technical Debt vs. Business Value:

Let’s look at business value and how it differs from technical debt now that we know what it is.

In corporate valuation, it is the conventional value metric. The PMBOK® defines business value as the total value of a company’s tangible and intangible assets. Business value is a subjective concept in which the demands determine the firm.

Some CEOs may still believe that having employees work on the technical debt will prevent them from bringing value to the company. This, however, is incorrect. 

Technology advancements work directly with your business, providing increased system stability, better performance, faster releases, and even the potential to introduce new capabilities that would otherwise be impossible.

Adding more and more features to existing items may be a short-term gain, but it will become a long-term headache.

Is it more important to have technical debt or to have business value? There is no victor. Do both.

What Causes Technical Debt?

A variety of factors can cause technical debt. They are frequently the outcome of choosing easy or quick shortcuts in a project rather than a more long-term approach.

Some of these factors are cultural. For example, a team may be under pressure to deliver a product before it is ready, resulting in more revisions later.

When software design and implementation decisions run into – or outright collide with – business goals and timelines, technical debt builds up.

Another factor could be a lack of technical expertise. Another mistake is not devoting enough time and effort to creating effective code testing procedures. This problem might be exacerbated by spending too much time on manual testing or electing to ignore specific test methods.

Why Reduce Technical Debt?

Too much technical debt can limit your team’s agility, result in low-quality code, put pressure on your testing team, and ultimately lower your company’s overall productivity.

It can also slow down development (for example, due to increasing code complexity); assessing the quantity of work completed from iteration to iteration can reveal the influence of tech debt on team performance.

How to Measure Technical Debt?

Technical debt is difficult to quantify since no single statistic can capture the entire picture. The solution is to calculate the technical debt’s second-order effects.

Rather than counting how many units of technical debt you have (which is impossible), you must typically consider the impact of technical debt on other business indicators.

Closed Bugs vs. New Bugs

Here’s a simple one to get a kickoff.

Every known bug is nothing more than a speck of technical debt. It’s critical for your engineers to keep track of your overall debt if you want to know how much you owe.

You can determine how effectively you manage your technical debt if your engineers keep track of the problem fixes. You should make some changes if new bugs exceed closed bugs.

Cycle time

Cycle time refers to the time it takes to complete an activity. It is the time between a developer’s first commitment to a piece of code and the deployment of that code in programming. Shorter cycle times denote a well-designed process with little technological debt. Longer cycle times have the opposite effect.

Developer happiness

If your developers are becoming increasingly dissatisfied with a particular system compared to others, it’s a sign that the system has more tech debt.

How Can Product Managers Help You Solve Technical Debt?

Product managers have a deep understanding of a company’s various departments and stakeholders and access to them. As a result, they’re in a great position to foster a working culture focused on preventing and dealing with technical debt.

As a product manager, you get to undertake situation planning, prioritize work, and play with “what if” scenarios daily. Technical debt is an excellent way to get your development team involved in similar activities. Allowing your development team to submit suggestions, create a wish list, and be part of your planning activities.

Vision, features, strategy, product launch, market position and rivals, and road mapping are crucial factors for product managers. Because of their unique work at the intersection of engineering, sales, support, and marketing, they are mainly there to handle the issue of technical debt.

Consider technical debt as a tool that may make or break your product release cycle; learn about it, use it, and manage it over time.


How much technical debt is acceptable?

Whether it looks harmless or dangerous, technical debt is an unavoidable feature of any software development. Be mindful that if you can’t control it, the problem will only get worse and more expensive as the project grows. No one wants a high Technical Debt Ratio [TDR], and some teams want TDRs of less than or equal to 5%.

Who is responsible for technical debt?

The Scrum Master and the entire team are in charge of controlling technical debt throughout the development project.

What are the consequences of technical debt?

Ignoring technical debt has long-term consequences that jeopardize the business – and value creation ambitions. Technical debt will sap your production, causing you to produce less and less.

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