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A Business Owner’s Guide To Understanding Technical Debt and Knowing How To Keep Costs Down

Technical Debt

Software development is not a straight or easy road. Snares and hiccups along the way will happen as problems arise in a project. But, sometimes, your team causes more problems because of the way they deal with issues that arise in development. 

To keep overhead costs low, an understanding of technical debt and how to avoid it is necessary. 

What Is Technical Debt?

Technical debt is the generation of code that needs to be fixed later due to crunch or time constraints. As time goes on during a project, this code builds up as shortcuts or workarounds keep a project moving. So, this is not a financial debt but rather a labor debt on the software project. 

Eventually, technical debt has to be paid off by reviewing and trimming code for a project. Excess or sloppy coding catches up with a project as customers of the software find that this code slows down their processes or does not deliver on the promises made by the development team. 

How Technical Debt Affects Costs

Company costs are not directly affected by technical debt in that you can not pay money to fix a backlog of technical debt. Instead, technical debt increases the costs associated with quality assurance and development time as fixes go out. 

Much like with financial debts, the further into a technical debt a project gets, the more expensive it is to reduce that debt. In this case, the interest that builds over time is the company time and resources that will have to go into fixing the project rather than a dollar amount. While employee pay and opportunity costs have dollar values, it’s not a direct comparison to something like a bank loan.

For projects where quality coding isn’t an issue, then this technical debt is ignorable. However, projects that have quality expectations that should move towards paying down this debt. 

Business owners will have to decide which projects will get prioritized to reduce debt. Projects that stand to have their technical debt bleed over into financial costs will need to get prioritized to keep lights on and the work environment churning. 

Reducing Technical Debt and Costs Together

Reducing the company’s costs surrounding technical debt will require a mindful approach to the problem. To reduce costs, it needs to be understood that technical debt will happen naturally. 

Also, there are steps a team can take to reduce this debt during a project’s development. Here are some of those practices: 

  • Account for all technical debt: Have dev teams review their code and account for instances where they used a quick fix over a nuanced solution. 
  • Reduce technical debt during each crunch: Committing resources and time to every sprint towards a development goal to removing technical debt will prevent extensive bug fix periods at the end of the dev cycle. 
  • Implement standardized code reviews: Establish or improve coding review periods to see if technical debt is accounted for based on the standards set by the team or client. 

By adding these practices into a development cycle, the project team can pay down this technical debt before it becomes a massive problem. While technical debt is not always a conscious decision by the coder, it is one of those snares that can cause a project to become hung up if not handled properly. 

Business owners will need to either make sure their teams understand what they need to do to remove technical debt or be willing to chip away at it themselves. 


Although a team can ignore technical debt for certain projects, they will need to pay it off at some point. Taking a mindful approach to this debt as a business owner can reduce costs by preventing long periods of bug fixing and test benching that do not add to the software’s functions. 

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