Understanding Technical Debt
Strategically priming your business for profitability
Technical debt is a big buzzword in the always-evolving digitally driven business environment. But it’s a concept that non-technical stakeholders often don’t fully understand—or more critically, know why it matters.
What is technical debt? There are many nuanced definitions but simply put, technical debt refers to software development decisions and actions that prioritize speed of delivery, to meet a client’s most urgent needs, over optimal technology—providing an immediate though incomplete solution—and the long-term effects of those choices.
There are many kinds of technical debt. Some academic studies identify as many as 13 categories—but in general, it can be broken into two types: intentional and unintentional.
Intentional technical debt is strategic, and ideally, well managed. At times an organization needs a technical solution right away, but may not have cash on hand for the best technology, or the time to wait for a developer to deliver an optimized system. So, in order to get a product to market more quickly, they opt for coding or design that will need refactoring down the line.
You might compare this type of technical debt to an auto loan. You need transportation to get to your job, so you borrow money to buy a car—not a Tesla, but the one you can afford at the moment. You take on debt, and will ultimately pay more for the car with interest, but it serves a worthy purpose. Your immediate need is met: the car is a tool to create a revenue stream, and you have a plan in place to pay off the loan in monthly installments.
Unintentional technical debt happens in a number of ways. Some of it is simply inevitable—all systems eventually become outdated and need upgrades. Having technical debt doesn’t necessarily mean that hasty solutions were sloppy ones. However, while stopgap fixes, shortcuts, and patches work for a time, they become cumbersome as code gets overly complex, increasingly difficult to maintain or build upon. To return to the car example, even a good car needs regular tune-ups, more and more so as it ages: tires wear out, brakes need to be replaced, the transmission goes. At a certain point, it’s not prudent to keep investing in something no longer worth fixing—it’s time for a newer, more modern model.
Unfortunately, unintentional technical debt can also accrue due to process problems: poor management throughout development, unstable IT operations, conflicting systems, weak disaster recovery, and critical blind spots.
But it’s important to know that technical debt, in and of itself, is neither good nor bad—it’s how a company manages it that matters. It’s typical for businesses to be operating with a mix of intentional and unintentional technical debt. IT teams and developers are always juggling the immediate demands of their client company against that organization’s need for fully optimized systems, and the time it takes to deliver them.
However, if an IT team spends the bulk of its time managing complications and repairing legacy systems, resources are squandered on support and maintenance instead of enhancement. The ability to innovate and build new, scalable, revenue-boosting technologies is severely inhibited. Both user and customer experience are diminished. This can create friction among various teams, and make it harder to attract and retain top tech talent. Further, disjointed and outdated architecture prevents the use of advanced analytics that help drive growth. All of these factors slow productivity, transformation, and revenue.
Companies must weigh the cost of technical debt and use it responsibly. In some cases, a system that’s cheaper and easier today is much more costly and complicated in the long run. And like financial debt, all technical debt eventually needs to be repaid. If allowed to accumulate out of control, it can bury you—you’re left “bankrupt” with no choice but to start all over.
At Lukasa, we specialize in recognizing and building on your company’s strengths. Working as true partners with your team, we get to know your company from the inside. Our expertise and holistic view allow us to identify pain points and inertia, and outline inefficient processes and programs. We’ll help you allocate appropriate time and money to proactively address your organization’s technical debt, and strategically build equity by creating modern, agile, custom infrastructure solutions that seamlessly integrate business and technology and prime your organization for profitability.
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Lukasa empowers small-to-medium-sized businesses by designing and implementing custom business and technology solutions that drive efficiency, productivity, and innovation, enabling them to stay ahead in today’s rapidly-changing competitive landscape.