Tech debt has become a major concern for software businesses around the world. We all know that digital transformation is driving demand for Cloud-based solutions and SaaS. As software companies race to keep up with demand, however, best practices can fall by the wayside.
DevOps teams can be forced to compromise on the quality of their code for the sake of speedy delivery. In the moment, this may seem like a win, but long term, the costs associated with hastily written code can add up. This is where tech debt can be a killer for your ROI.
How much is tech debt costing you?
It can be difficult to determine exactly how much technical debt costs. In a 2020 survey, McKinsey found that CIOs estimated the total cost of tech debt amounted to 20-40% of their organizations’ tech value.
What makes the cost of tech debt hard to ascertain is the variety of ways that it can be realized. Features developed in a hurry can cost you in terms of maintenance and code refactoring. Applying third-party solutions can also put your products at risk of security breaches and other pitfalls.
It’s common for developers to measure tech debt in the number of days necessary to fix issues that can arise. A dollar-cost can then be calculated based on the amount of work that needs to be done.
Keeping track of Tech Debt
A little tech debt isn’t necessarily a bad thing. Depending on the stage of your product, it might be advantageous to release software that you know has technical debt. This could be to cash in on opportunities in the market or to address customer needs as they arise.
Tech debt only becomes dangerous when it begins incurring costs that you aren’t even aware of. You could be pouring time and developer capacity into maintaining your software product, but you may not know why. These unknown costs can bleed resources from your development teams slowing progress on new products or features.
To understand where your software efforts are generating tech debt, the following measures can help:
- Communicating openly with your DevOps teams.
- Keeping abreast of key strategic decisions within the development process.
- Staying conscious of teams’ capacity and how much they can accomplish in a given timeframe.
Strategies to address Tech Debt
There will always be technical debt in the development process. How you manage it determines whether it becomes an asset or a liability for your business.
Proactive Resource Allocation
Once you know that your tech debt exists, a proactive solution could be to regularly allocate some time or capacity to clearing it. Much like paying off financial debt in monthly installments, this approach helps you stay on top of your tech debt and minimize potential costs long term.
Another benefit is visibility. You can calculate the cost in terms of the man-hours and developer capacity. Over time and as your product grows you can keep track of your spending to determine if the technical debt in this area is still under control or if it’s getting out of hand.
Reactive Response to Technical Debt
A less hands-on approach can be to simply wait for technical debt to become a problem before dealing with it. Of course, you still need to be aware of where your technical debt is being accrued and what it could cost you to resolve. In this case, you make the conscious decision to focus your resources on product development and maintenance.
While this approach can be useful for maximizing ROI in the short term, it may be a gamble if you aren’t fully aware of the consequences. In the end, you still pay the debt, but possibly with higher interest.
At some point, your tech debt must be dealt with. This can be triggered by software failure, security breaches, or customer dissatisfaction. When this happens, you’ll need to pour all your resources into fixing the problem as quickly as possible to reduce down-time and loss of revenue.
Tech Debt Doesn’t Have to Be Scary
For tech decision-makers, the most important thing is staying up to date with tech debt. This could mean staying in communication with DevOps teams or using software monitoring tools to identify where technical debt is being accrued.
Ultimately, managing technical debt is a form of risk management. You can be either proactive or reactive in how you choose to address it. There will always be tech debt, but it’s up to you to take the initiative and plan accordingly.