What is technical debt and why can it "eat" your budget?
Imagine the situation: you've launched a new site or app. Everything works, customers are happy. But after a few months every new feature takes longer and costs more to implement. The developers explain it as "problems in the source code", and you feel the project gradually turning into a black hole for the budget.
If this situation sounds familiar, you've run into technical debt — one of the most widespread and dangerous phenomena in software development. For a business without its own technical department this can be a particularly painful problem, since it's often hard to understand the true cause of the slowdown and rising costs.
Technical debt is a metaphor from the financial world that perfectly describes the situation where you implement fast but suboptimal solutions in development. Like financial debt, technical debt also accumulates and requires "paying interest" — additional resources to maintain suboptimal solutions.
Why does technical debt arise in software development?
Technical debt appears for various reasons, and it's important to understand them in order to manage the quality of your software product effectively:
1. Speed over quality (a conscious choice)
Sometimes a business consciously sacrifices code quality for a fast launch:
- You need to reach the market before competitors
- An important sales season is coming (Black Friday, the New Year holidays)
- Investors are waiting for the product launch
This is strategic technical debt, and in some cases it's justified. However, if you don't plan its "repayment", the consequences can be serious.
2. Insufficient developer expertise
Not all technical solutions are created equal. Sometimes developers:
- Don't have enough experience
- Aren't familiar with best practices
- Pick the first working solution instead of the optimal one
Such unintentional technical debt often goes unnoticed until problems become obvious.
3. Changing requirements and project growth
Most business projects evolve over time:
- New features appear
- Business processes change
- The load on the system grows
An architecture that was ideal at the start may become inadequate for new conditions. This is evolutionary technical debt, which is inevitable in any living project.
The true cost of technical debt for business
Technical debt isn't just a technical problem. For a business it has very real and tangible consequences:
Financial losses
- Rising development costs: every new feature costs more
- Growing support costs: more bugs, more time to fix them
- Unpredictable costs: sudden problems require urgent and expensive solutions
Loss of time and opportunities
- Slower release of new features: you lose your competitive edge
- Longer reaction time to market changes: you can't adapt quickly
- The risk of development grinding to a halt: when adding new features becomes practically impossible
According to a Stripe study, developers spend on average 42% of their time dealing with technical debt and maintaining bad code instead of building new features.
A practical case: One of our clients, an online store with sales of around UAH 500,000 a month, used a website developed 5 years ago. When competitors began introducing personalization features, the owner also wanted to add them. But because of accumulated technical debt the developers had to spend 3 months just "clearing" the code before getting to the new features. In that time competitors were already earning extra profit from personalized offers, and our client lost about UAH 150,000 of potential income.
How to recognize technical debt in your project?
As a business owner without technical experience, you can spot these "red flags":
Signs of technical debt
- Longer time to implement new features: what used to take days now takes weeks
- A growing number of bugs and problems: more and more errors appear after every update
- System instability: random failures, slow performance, security problems
- Developers often talk about "refactoring" or "rewriting the code"
- Developers avoid working with certain parts of the system
Tip: Ask your developers directly: "How much technical debt is there in our project?" If the answer is evasive or they say there's "none at all", that may be a bad sign. All living projects have some level of technical debt.
Technical debt management strategies: what can a business owner do?
The good news: technical debt can be controlled effectively. Here are practical approaches for business owners:
1. Be aware of debt and plan for it
Make conscious decisions about speed vs quality:
- Before launching a new feature, ask the developers: "What technical compromises are we making for the sake of speed?"
- Plan time and budget for "repaying" the debt after launching critical features
- Document every area where a decision was made in favor of speed at the expense of quality
2. Set aside regular time for optimization
Establish a constant regime of maintaining code quality:
- Allocate 15–20% of development time to refactoring and paying off technical debt
- Include optimization tasks in every sprint or development iteration
- Treat technical debt as a regular investment in your business's infrastructure
3. Introduce quality control
Insist on processes that prevent new debt from accumulating:
- Automated testing: code is checked automatically with every change
- Code review: developers check each other's code before release
- Coding standards: established rules and practices for the whole team
4. Invest in the right team
Experienced developers are the best prevention of technical debt:
- Hire or work with developers who understand the balance between speed and quality
- Look for teams that offer a long-term strategy rather than just quick fixes
- Value honest communication about the project's state and potential problems
A practical example: The digital development agency "Digital Evolution" introduced a "technical audit" every 6 months for its clients. The result was a 35% reduction in the total cost of project support over a year and a 40% increase in the speed of delivering new features.
Real examples of technical debt and their solution
Case 1: An online store with scaling problems
Situation: An online furniture store started with a simple catalog of 100 products. After its success the range grew to 5,000+ products and integrations with suppliers and delivery services appeared. The site began to run slowly and during promotions it simply "went down".
The technical debt problem: The original architecture was designed for a small catalog without integrations. Data was stored suboptimally and database queries were not optimized.
The solution:
- A site performance audit was carried out
- Caching of popular pages and queries was introduced
- The database structure was optimized
- Functionality was split into microservices for better scaling
Result: Page load speed grew 3 times and the site began to work stably even during load peaks. Revenue increased by 30% because customers no longer left the site because of its slowness.
Case 2: A CRM system with security problems
Situation: A company used a custom-built CRM system to manage customers and sales. Over time security problems began to appear — data leaks and unauthorized access.
The technical debt problem: The original development was carried out under a limited budget and time. Developers skimped on security, used outdated libraries and didn't implement modern protection practices.
The solution:
- A comprehensive security audit was carried out
- All components and libraries were updated to the latest versions
- Multi-level authentication was introduced
- A regular process for security checks and updates was created
Result: The system began to meet modern security standards and the risk of data leaks was minimized. The company avoided potential fines for GDPR violations and kept its customers' trust.
How to choose an IT partner who understands the importance of managing technical debt?
Choosing the right IT partner is a critical factor in preventing technical debt. What to pay attention to:
1. Ask the right questions when choosing a contractor
- "How do you ensure code quality in long-term projects?"
- "How do you balance development speed and technical excellence?"
- "Can you share examples of how you've solved technical debt problems?"
- "What tools and processes do you use for quality control?"
2. Look for signs of a quality approach
- Process documentation: professional teams document their work
- Testing: the presence of QA engineers or automated tests
- Transparency: willingness to speak openly about problems and limitations
- Long-term thinking: discussing not only the launch but also the project's support
- Phased development: a proposal to split the project into manageable stages with intermediate results
3. Consider the technology stack and development approach
- Modern technologies: using current but proven tools
- Flexible methodology: adapting to changing requirements without accumulating debt
- DevOps practices: automation of development and deployment processes
- Code review: the practice of reviewing code before release
Practical tip: Ask potential contractors to tell you how they approach optimizing existing projects with technical debt. Their answer will say a lot about their experience and approach to quality.
How does technical debt affect the cost of owning an IT product?
Understanding the total cost of ownership (TCO) of your IT product is impossible without accounting for technical debt:
Initial development vs long-term costs
- Cheap initial development often leads to high maintenance costs
- Quality development may cost more at first but saves significant money in the future
A comparison of approaches:
Saving on initial development often means that a project costing UAH 100,000 will cost you an extra UAH 80,000 in the first year of support, UAH 120,000 in the second year, and in the third either UAH 180,000 or a complete rewrite for UAH 300,000+.
By contrast, investing in quality from the start (about UAH 150,000) usually reduces support costs to UAH 30–40,000 a year. The total cost over 3 years comes out 30–50% lower.
The hidden cost of technical debt
Besides the obvious financial costs, technical debt creates other "hidden" costs:
- Missed opportunities: the inability to respond quickly to market needs
- Loss of reputation: due to the product's unstable performance
- Staff turnover: developers don't want to work with "dirty" code
- Limits to growth: the system can't scale in line with business growth
A practical approach to managing technical debt for non-technical managers
If you don't have technical experience but want to manage the quality of your software product effectively, here is a step-by-step plan:
Step 1: Run a technical audit
- Commission an independent assessment of your project's condition
- Discuss the results with the development team
- Create a technical debt map — a document that shows the problem areas
Step 2: Set priorities
- Critical debt: security, performance and stability problems
- Important debt: scaling limitations, outdated technologies
- Desirable improvements: better maintainability, code optimization
Step 3: Create a repayment plan
- Allocate a budget for regular repayment of technical debt
- Include optimization tasks in every development iteration
- Set success metrics: development speed, number of bugs, site speed
Step 4: Introduce preventive measures
- Define quality standards for future development
- Introduce quality control processes: code review, testing, monitoring
- Discuss with the team how to prevent new debt from accumulating
Conclusions: technical debt as a strategic asset
Technical debt, like financial debt, isn't always a negative phenomenon. Strategic management of technical debt can become your competitive advantage:
- Conscious technical debt lets you reach the market faster
- Regular servicing of the debt ensures stability and scalability
- Strategic repayment of the debt lets you optimize costs in the long run
Successful companies don't try to avoid technical debt entirely — they manage it consciously, making balanced decisions about when to borrow and when to repay.
Our digital agency has significant experience working with technical debt and optimizing projects for small and medium businesses. We help clients not only "put out fires" but also build a long-term success strategy for IT products.
Need help assessing technical debt in your project?
Our team offers a free initial audit that will help determine your project's current state and possible directions for optimization.
