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How enterprise software organizations can reduce technical debt

Posted on by David Gibb
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Technical debt is the consequence of poor or sub-optimal software development processes.

Understanding technical debt is crucial for any development team or enterprise striving for efficiency and quality.

This guide will demystify the concept of technical debt. We’ll tell you the main types and causes, how to identify them, and, most importantly, strategies to effectively manage and reduce technical debt.

Understanding technical debt

Wade Cunningham, an American computer programmer, first introduced technical debt in 1992 when explaining the importance of budgeting for software refactoring.

Originally, technical debt described the deliberate sacrifice of optimal code quality for short-term gains in development speed, but it has a much broader meaning today.

Technical debt definition.

Today, technical debt refers to shortcuts, omissions, and intentional or unintentional deficiencies in a software project’s workflow. Those issues result in future changes that are more tedious, costly, or impossible.

Technical debt is similar to financial debt. For example, if you take out a credit card and pay your balances in full every month, the debt is managed and doesn’t create any future problems. 

But if you don’t clear your balances and keep spending on the card, the interest keeps growing. Eventually, the accrued interest can make the total debt so large and overwhelming that you’re unable to pay it off.

In software development, you introduce a technical debt when you take a shortcut or opt for a short fix. That’s okay if you repay the debt on time with steps like code refactoring.

But if you don’t pay or even forget about it, the interest continuously accrues, just like with financial debt. Here, the interest is the additional cost, effort, and resources required to redesign software or fix problems down the road. 

The longer technical debt goes unresolved, the more interest it gathers.

If you don’t actively manage or reduce technical debt, it compounds over time, making future software modifications or improvements exponentially more complex and costly.

Ultimately, technical debt can become so huge that it can’t be paid anymore, and you might have to abandon your product, leading to technical bankruptcy. 

Types of Technical Debt

Technical debt can be classified into three main categories: reckless, unavoidable, and strategic. Each has unique challenges.

Reckless debt

Reckless debt falls into two sub-categories: deliberate reckless and unintentional reckless debt.

Deliberate reckless debt

This type of debt arises from intentional choices made with full awareness of the potential negative consequences. For example, developers might consciously ignore coding standards to beat a product delivery deadline, even if it causes bad code.

Unintentional reckless debt

Sometimes, teams unintentionally introduce technical debt due to a lack of or gaps in their skills, experience, or knowledge. For example, the team might use outdated frameworks during the coding without understanding the consequences of their decisions. 

Unavoidable debt

Sometimes, technical debt can’t be avoided. It stems from the natural evolution of a project or the emergence of new technologies, requirements, and best practices.

An example is when a development team uses a design that’s optimal at the time but later becomes obsolete due to evolving coding standards. Unfortunately, this type of technical debt is impossible to predict as no one truly has a crystal ball for what the future holds.

Strategic debt

Strategic technical debt is intentionally incurred because the benefits of doing so outweigh the cost.

For example, an enterprise might take deliberate shortcuts during development to get a time-sensitive product into the market.

Or it might release a less-than-perfect product to remain competitive. For example, a global survey by Software AG found that up to 78% of organizations took on extra technical debt to stay competitive during the COVID-19 pandemic.

Another example is an organization facing financial constraints that releases a product earlier than planned and uses sales to fund further development and improvement.

Strategic debt can be beneficial, but there are risks. One risk is the erosion of user trust. Releasing a product with excessive performance issues or instability can permanently tarnish a company’s reputation, even if future iterations and updates fix these issues.

Causes of technical debt

Technical debt can come from various sources. In some cases, technical debt arises from a combination of factors.

  • Tight project timelines: Stringent deadlines can force development teams to compromise or take shortcuts that create technical debt.
  • Inadequate upfront definitions: Starting coding work before requirements and designs are fully fleshed out can lead to misalignments. Sometimes, it has a snowball effect where each change forces yet another change.
  • Lack of technical knowledge or experience: Development teams that lack the proper technical skills, knowledge, and experience might not adhere to best practices, resulting in substandard code.
  • Unawareness of technical debt: Some organizations are unaware of the concept of technical debt. Decisions made without considering the potential impacts of technical debt can inadvertently increase it.
  • Poor documentation: Inadequate documentation can lead to confusion and inconsistent development practices that create technical debt.
  • Tightly coupled requirements: Excessive interdependence among system components can make changes complex and risky, resulting in rigid structures that continuously accumulate debt.
  • Parallel development: Working on multiple aspects of a project simultaneously without proper coordination can lead to inconsistencies and redundancies in the codebase that create technical debt.
  • Inadequate testing or testing infrastructure: Lack of thorough testing or proper testing infrastructure can leave bugs and other issues unaddressed, accumulating as technical debt.
  • Last-minute changes: Introducing modifications late in the development process without adequate budgeting or time allocation for proper documentation and testing can create technical debt.
  • Business constraints: Limited budgets can force teams to cut corners, leading to the accumulation of technical debt.

Why reduce technical debt?

Large technical debt negatively impacts your software development and overall business. Here are key reasons why reducing technical debt should be a priority for every organization.

Consequences of technical debt.

It increases development costs

As the amount of technical debt increases, so will your development costs. Tasks that were once cheap and simple become complicated and expensive. A survey by Protiviti found that over 30% of most IT budgets deal with technical debt. 

For example, a feature you could previously add to an existing software relatively cheaply without technical debt now becomes much more expensive because of other changes that must be made first.

It slows down delivery times

As technical debt accumulates, your codebase becomes increasingly complex, slowing down development. This can delay the release of new updates or features and impact your business's ability to respond swiftly to customer needs or market changes.

It stalls business growth

Technical debt can divert resources from new projects to maintenance. When you have too much technical debt, a significant portion of your firm’s IT budget may go toward managing existing issues rather than fueling growth and innovation.

In a survey by DXC Technology, 46% of executives said that technical debt is a major obstacle to innovation and growth in their organizations.

Technical debt share of organizations’ IT budgets.

It lowers your employees’ morale

Dealing with legacy systems and code filled with technical debt instead of new and innovative work can frustrate developers and lower their morale. Low employee morale leads to low-quality code, decreased productivity, high turnover rates, and even more technical debt.

It increases product defects 

Technical debt can lead to significant product issues, adversely affecting user experience. In turn, that requires deploying more customer support resources, further escalating project costs.

It erodes customer trust and satisfaction

Issues stemming from technical debt, such as bugs and delayed updates, can erode customer trust and satisfaction. This can harm your brand’s reputation and lead to loss of business.

It hampers planning 

With a growing backlog of issues and a complex codebase, predicting development timelines becomes increasingly tricky. This unpredictability hampers planning and strategic decision-making.

It can lead to product atrophy

In severe cases, technical debt can lead to atrophy, where software becomes so cumbersome to update or fix defects that it’s no longer viable. You may have to undertake costly overhauls or, in the worst-case scenario, abandon it completely.

How to spot technical debt

Learning to spot technical debt is the first step toward reducing or managing it effectively. Here are some common indicators of growing technical debt. 

  • Difficulty adding new features: If integrating new functionalities becomes increasingly challenging, it’s often a sign that your codebase has unaddressed technical debt.
  • Frequent bugs: Glitches can be a telltale sign of technical debt, especially if these are systemic or repetitive. If you spend more time fixing bugs than developing new features, it’s a sign that you’ve accumulated too much technical debt.
  • Complexity and clutter: An overly complex and cluttered codebase is a clear indicator of technical debt.
  • Growing customer complaints: An increase in customer complaints or negative reviews about your product can also indicate technical debt.

Following best practices for reducing technical debt can help proactively prevent these issues.

How to reduce technical debt: Best practices

Reducing technical debt improves operations and reduces costs. In fact, one study found that companies can realize at least 50% faster service delivery by managing and reducing technical debt. 

Here are nine strategies to help you manage and reduce technical debt:

Best practices for reducing technical debt.

Test the code

Using automated testing and static code analysis pinpoints problems quickly. This process allows you to identify issues early on and fix them before you even take the code to a human reviewer for another look. 

Static code analysis uses tools like CodeClimate, SonarQube, and Reshape to inspect code for errors, inefficiencies, and even deviations from coding standards without executing it. Some static code analysis tools also integrate with CI/CD tools to automate the code validation process.

Automated testing enables early detection of bugs and others, ensuring that changes to the code don’t introduce new problems or break existing functionalities. These tests also provide a safety net that allows developers to update or refactor code with confidence. You can use tools like Selenium, JUNit, and TestNG for this purpose. 

Adopt a code review culture

Code reviews involve members of the development team examining each other’s codes. The process has several benefits that could result in lower technical debt.

A fresh set of eyes often catches issues that the original developer missed.

Code reviews also present a platform for team members to share their expertise and knowledge. The reviews can foster an environment of continuous improvement and learning where team members profit from each other's perspectives and insights. This leads to better solutions, preventing suboptimal design choices that could later become debt sources.

Overall, code reviews, when done consistently, can lead to high-quality code and significantly reduce the accumulation of debt. Tools like Crucible and Gerrit can help with this process.

Maintain proper documentation

Maintain proper documentation of your codebase, updating it as necessary to reflect any changes. Good documentation helps reduce time spent on system comprehension and streamlines maintenance and enhancement. Tools like Confluence, Pandoc, and GitHub Wiki can help you maintain proper documentation.

Regularly refactor code

Code refactoring means improving existing code's design or internal structure without changing its core functionality. Think of it as routine maintenance that keeps the codebase healthy and adaptable.

Schedule regular refactoring sessions to assess issues like code smells, redundant code, and overly complex structures. This practice helps reduce code complexity, improves readability and maintainability, and ensures the software can adapt to future requirements more efficiently. 

Finding time to refactor code is sometimes easier said than done, especially if your IT team is already bogged down by other tasks such as server management. Liquid Web’s managed hosting solutions can free up your team from such tasks so they can have more time for technical debt reduction actions like code refactoring.

Adopt agile development methodologies

Agile methodologies, with their iterative and incremental approach, can help prevent the buildup of technical debt.

Practices like Scrum or Kanban foster a culture of collaboration, regular reassessment of the work done, and rapid feedback, which are crucial for identifying and addressing technical debt early in the development process.

Plan for technical debt reduction 

Technical debt reduction should be integral to the product development roadmap, not just an afterthought.

Plan and allocate a specific time with resources in each development cycle for managing or reducing technical debt. This approach ensures a continuous and systematic technical debt reduction, preventing accumulation.

Prioritize tasks based on impact

Like financial debt, it might not be practical to pay all your technical debt at once, especially if you’ve accumulated a lot.

Prioritization can make the process of reducing technical debt more manageable.

Start by determining specific criteria for prioritizing technical debt. Examples of criteria you can use include:

  • Impact on business: For example, issues that threaten to disrupt your product’s core functionalities or negatively impact the user experience should be high on the priority list. Liquid Web’s products, such as our VMware Private Cloud, include performance monitoring tools to aid in the detection of major bottlenecks and inefficiencies in your applications. These tools can help you see where technical debt reduction efforts are needed most. 
  • Risk of accumulation: Debts that accumulate more interest than others during each development phase, that is, those that significantly increase the complexity and costs of future changes, should be addressed first.
  • Frequency of code use: This refers to how often problematic code is used or modified. Prioritize repaying the debt on components that are used regularly or that play a more important role than others in your system to prevent it from escalating.
  • Ease of resolution: Consider the ease of resolving the debt. Tackle small problems that you can resolve with minor tweaks first. This approach can provide quick wins and set the stage for addressing larger, more complex debts.

Upskill your development teams

Provide your development teams with regular training sessions, workshops, and other professional development opportunities to ensure their skills and knowledge are up-to-date.

Well-trained developers are more adept at avoiding practices that lead to technical debt. They are also better equipped to address existing debt efficiently.

Track and analyze relevant metrics

Use tech debt metrics like code churn, cyclomatic complexity, and technical debt ratio to quantify and understand the extent of your technical debt. Set specific goals for improvement based on these metrics and monitor progress over time.

Final thoughts: How enterprise software organizations can reduce technical debt

Every enterprise will incur technical debt at some point; it’s an inevitable part of being in business. However, if left unchecked, technical debt can escalate quickly, leading to adverse outcomes for your organization, like higher development costs, stalled growth, and low customer satisfaction.

While you can’t eliminate it completely, ways to effectively manage or significantly reduce technical debt include code refactoring, code reviews, and automated testing.

At Liquid Web, we understand the complexities of software development, such as the accumulation of technical debt. We are committed to offering support and solutions that improve your experience and lead to better outcomes. Contact us today to see how our monitoring tools and managed hosting can help take some pressure off your IT teams.



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About the Author

David Gibb

David Gibb is the Financial Controller at Liquid Web. He has over 20 years of experience working in Finance. He is a CPA in Canada, CGMA in the United Kingdom, and a CPA in Australia.

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