Business leaders are often tempted to make hasty decisions, not always due to their faults, of course. However, such choices can have repercussions in the name of technical debt, especially in the tech business.
In this blog, we’ll help you understand the concept behind agile technical debt, its various types, and business impact, and provide tips on managing and reducing it.
What is Agile Technical Debt?
The cost of rework incurred by choosing obsolete solutions over newer, more robust ones is typically understood as technical debt in agile. Generally speaking, tech debt definition is the consequence of selecting suboptimal technologies.
When it comes to software development, technical debt is the result of a situation where development teams prioritize speed and delivery over long-term code quality and maintainability. This trade-off often leads to higher costs and negatively impacts business operations.
What is tech debt in agile? It can be either intentional or unintentional; for instance, agile technical debt arises due to time limitations, budget constraints, or a lack of awareness of strategic organizational goals.
Technical debt for an ecommerce platform
Consider a development team working on a new feature for an ecommerce platform. If the deadline is looming, the team might speed up the process by incorporating discount values directly into the checkout process rather than building a flexible discount feature that can handle dynamic rules. The debt incurred may include the following:
- The hardcoded discounts may work well now, but if your team wants to change the discount rules or add new ones later, they’ll need to update the code manually.
- Not having a discount engine will make it harder to test and maintain the code.
- Future developers may struggle to understand why the discounts are hardcoded, which could lead to confusion or errors.
As a result, when you want to introduce season-based discounts, your team will need to spend significant time refactoring the code to replace the hardcoded logic with a proper discount engine. The consequences could have been avoided if you had the right solution upfront.
Different Types of Technical Debt
For business owners, it is essential to understand that agile technical debt can manifest in various forms, other than the technical form itself.
Code Debt
One of the most common occurrences, code debt, happens when teams implement poor coding practices or obsolete techniques within the codebase or display a lack of standardization. This makes the code problematic and more challenging to maintain and scale.
Consider a developer quickly fixing a bug by duplicating a block of code rather than refactoring it into a reusable function. Over time, this duplication will spread across the codebase, making updates time-consuming and prone to errors.
Design Debt
Design debt originates from flawed or outdated software architecture, such as overly complex designs, improper use of patterns, or a lack of modularity. It restricts scalability and makes it difficult to add new features.
Suppose a monolithic application is designed without modular components. When the team attempts to add a new feature, they’ll realize that the tightly coupled architecture requires rewriting large portions of the system, thereby delaying the release.
Documentation Debt
Documentation debt, as the name suggests, arises when documentation is incomplete, outdated, or missing entirely. This makes it harder for developers to understand the system, leading to inefficiencies and errors.
If a team rushes to deliver a project and skips writing documentation or follows a poorly maintained development timeline. A future hire will struggle to understand how the system works or the user manuals of the product, spending weeks deciphering the code instead of contributing to new features.
Testing Debt
Testing debt occurs when there is insufficient test coverage, including unit tests, integration tests, or end-to-end functionality tests. Such debt increases the risk of bugs and system failures in production.
When a team skips writing automated tests for a critical payment module to meet a deadline, a minor code change later introduced may cause payment failures, leading to customer complaints and revenue loss.
Infrastructure Debt
Infrastructure debt refers to the use of outdated or inadequate legacy systems, such as old servers, poor deployment practices, or the absence of disaster recovery plans. The debt can lead to performance issues and downtime.
When a team continues to use an outdated server with limited capacity, there is a high likelihood that the server will crash during a peak sales event, causing significant downtime and lost sales.
Technical Skills Debt
When a team lacks the necessary expertise or knowledge to implement optimal solutions, the business is bound to experience technical skills debt, resulting in subpar outcomes.
Suppose a team unfamiliar with cloud technologies develops a solution using on-premise servers rather than utilizing scalable cloud services. Such instances could result in higher costs and slower performance compared to modern alternatives.
Dependency Debt
As a business owner, we can confirm that agile development comes with plenty of dependencies. For instance, when a project relies on outdated or unsupported third-party libraries, frameworks, or tools, it’ll likely be exposed to security risks and compatibility issues.
Assume a team is using an older version of a JavaScript library that is no longer maintained. When a security vulnerability is discovered, the team will be forced to spend weeks migrating to a newer library to avoid further risks.
Process Debt
Poor communication, lack of agile methodologies, inadequate collaboration tools, and other inefficient or obsolete development practices puts teams in process debt.
Suppose your agile development team is using email for task tracking and correspondence instead of a project management tool. In that case, there is a risk that tasks will be lost, deadlines will be missed, and team members will struggle to stay aligned with project objectives.
Service/Versioning Debt
Service or versioning debt happens when services or components are not correctly versioned. In other words, when legacy systems are used without integration capabilities or sufficient support.
Let’s take a team that continues to use an outdated API version without backward compatibility. When the API is deprecated, the system breaks, demanding a costly and time-consuming upgrade.
The Business Impact of Technical Debt
Technical debt isn’t just a “technical” problem; it’s a business consequence, as we learned from the different types above. Here’s how debt impacts key areas of your business.
Delays innovation and time-to-market
When teams spend more time fixing old code or working around outdated systems instead of building new, robust features, this will only push your product launches, allowing your competitors to surpass you with modern systems. A company might miss a critical market window because its legacy systems require extensive application modernization to support a new product.
Download Our Guide: A Business Leader’s Guide to App Modernization
Increases operational costs
Agile technical debt easily translates into longer development cycles, frequent bugs, and higher maintenance costs. Resources that could be spent on growth or strategic initiatives are more exhausted on “keeping the lights on.” An online retailer might spend a fortune each year maintaining a legacy ecommerce portal instead of investing in a cost-effective, faster architecture that promises a high-quality shopping experience.
Hurts customer experience
No business owner, regardless of the industry, wants to deliver poor customer experiences to their audience. Even more so when poorly maintained systems are prone to crashes, slow performance, and bugs. A banking app incurring technical debt may crash during peak usage, preventing customers from accessing their accounts, leading to a surge in complaints and lost revenue, and ultimately encouraging them to switch to the financial institution’s competitors.
Reduces employee productivity and morale
No developer stuck patching up old systems instead of working on meaningful projects is going to exhibit motivation and an innovative mentality. This results in high turnover, increased recruitment costs, and the loss of institutional knowledge. A talented developer, for instance, might leave the organization because they’re tired of working on a legacy infrastructure with no plans for updating to modern mainframes.
Limits scalability and growth
It is not simple to scale operations or adapt to new market needs when using outdated systems and poor architecture. This can cause your business to miss growth opportunities, such as entering new markets or delivering new products and features. If a SaaS company’s platform is unable to handle an increased load, it’ll risk losing a major client to a competitor.
Increases risk of system failures
Agile technical debt often forces teams to work with fragile systems vulnerable to crashes, security concerns, and compliance issues. Consequently, system failures can result in costly downtime, legal penalties, and, more importantly, loss of customer trust. A healthcare provider may experience a data breach due to an outdated platform, which can result in regulatory fines and reputational damage.
Affects strategic decision-making
Some business leaders often struggle to adopt new technologies or pivot quickly in response to market changes. Apparently, such technical debts can leave their business lagging behind more agile competitors. An online retail company may struggle to implement AI-driven personalization features because its legacy systems are incompatible with modern tools, thereby losing customers to more tech-savvy competitors.
How to Manage and Reduce Technical Debt
Technical debt is inevitable, particularly in industries that heavily rely on legacy systems, such as financial services, healthcare, telecommunications, etc. However, that doesn’t mean you should leave your business stranded under pressure. Here are practical steps CEOs can take to manage and reduce agile technical debt effectively.
Invest in tech health
One of the foremost tips on how to manage technical debt. Dedicate an allotted budget for refactoring, modernizing systems, and addressing technical debt. Simply speaking, consider your company’s technology health as a strategic priority, not an afterthought.
Leaders must understand that, just as physical assets like machinery or office spaces require regular maintenance, their software systems also need regular upkeep to remain efficient and scalable. Set aside a specific percentage of your IT budget for debt reduction initiatives, identify high-impact areas, and collaborate with experienced technology partners to create a roadmap for modernization.
Handpicked content: How Offshore Software Development Accelerates Business Growth
Balance speed and quality
Over-prioritizing short-term wins at the expense of long-term sustainability isn’t wise. First, acknowledge that application quality and performance are essential for a positive customer experience, and timely deliveries are equally important to meet your business goals on schedule. The idea is to encourage a culture where quality and speed are balanced.
Set realistic timelines that allow for appropriate design, development, and testing. Further, use agile methodologies to deliver incremental improvements and communicate to stakeholders that investing in quality upfront saves time and future expenses.
Empower your developers
Your development teams must have access to the right resources, tools, and time they need to address debt effectively. A motivated and well-equipped team is better prepared to tackle agile technical debt and deliver high-quality solutions simultaneously.
Allocate dedicated time, for example, through tech debt sprints, for developers to focus on refactoring and improvements. Second, invest in training and upskilling and facilitate a culture where developers feel empowered to raise concerns about technical debt without fear of blame or any backlash from supporting departments.
Adopt a proactive approach
Regularly assess and address technical debt rather than waiting for it to become an organization-wide crisis. Proactively managing debt will contain it from growing to uncontrollable levels, thereby alleviating the risk of costly disruptions.
Conduct regular audits of your systems or tech stack to identify critical areas. Use metrics such as code quality and test coverage to track progress, and incorporate debt reduction into your development lifecycle to ensure it’s part of a continuous improvement loop rather than a one-time initiative.
Conclusion
As we discussed, technical debt is no longer just a technical issue. It’s a business risk that requires leadership attention and action.
By investing in tech health, striking a balance between speed and quality, empowering your team, and adopting a proactive approach, your technical debt management activities can mitigate the long-term costs and position your business for sustainable growth.
Business leaders can also partner with tech solutions providers to gain a deeper understanding of their technology positioning. And the best agile practices they can use to manage debt.
