Understanding Technical Debt: A Guide for Executives

Technical Debt is a term well understood by technical members of the product team but remains obscure to non-technical members of the team and executives in particular. Technical debt has damning consequences on the perceived value of an organisation’s product and service, eventually affecting business performance; hence Technical Debt must be discussed as the highest level of governance and control in the organisation.

This article aims to demystify technical debt for executives(including non-technical team members) and provide a framework for recognizing its business implications, identifying indicators of high technical debt in products, and initiating meaningful conversations to address it effectively.

What is Technical Debt:

Technical debt can be described as undone work that results from making suboptimal technical decisions while developing a product. It manifests as low-quality code that is unscalable, difficult to extend, unpredictable, and fragile.

Technical Debt is very similar to financial debt in that it incurs "interest" in the form of additional maintenance efforts, increased complexity, and the need for future rework. 

Common symptoms of High Technical Debt in Products.

1. Degraded performance when under high usage: One of the common symptoms that we have observed as consultants and users is products that degrade when subjected to high traffic. For example, consider a mobile banking application where bank transfers have a higher failure rate at the end of the month or the last working day before Christmas. Another example is OTP codes that are valid for 20 seconds but don't get delivered to a customer’s mobile for more than 30 minutes on rainy days.

2. Quick Restart is Impossible: We once had a client who revealed that one of their critical systems had not been updated in years and, as a result, had not been restarted at the same time. The technical members of the teams had little to no confidence that the system would be restarted successfully. There are so many reasons why this could happen, and this is a form of technical debt that would eventually hold up normal business operations if it is not sorted out in the near term.

3. Outdated Dependencies Causing Failures: A product that has not been updated or restarted in years would have obsolete dependencies. The libraries used in the product have aged and usually become incompatible with newer versions of other components, or they may develop vulnerabilities. These forms of technical debt would eventually lead to crashes and service outages.

Technical debt isn’t just a technical problem—it’s a business problem. It will affect business performance in multiple ways, leading to higher costs of building new features, missed opportunities due to increased time to market, and compromised customer satisfaction due to unavailability or degradation of your products.

Every product will have some form of Technical Debt, and sometimes teams take on Technical Debt to take advantage of business opportunities; other times, technical debt can come from inexperienced or sloppy technical team members. In both instances, the most crucial factor is to consider the cumulative technical debt inherent in a product and decide on an appropriate time to start paying back the technical debt.

What can you do about Technical Debt?

As an executive, addressing technical debt requires collaboration with your technical leaders, product managers, and development teams. We have described some steps to having productive conversations about technical debt and work towards mitigating its impact:

1. Acknowledge Technical Debt as a Strategic Concern: Recognize that technical debt is not just a technical issue but a strategic one that impacts business outcomes. It is worth noting that discussing Technical Debt is not an admission of failure but rather seen as a proactive approach to maintaining the health of your product. Leaders should ensure they create a safe space at all levels when discussing Technical Debt.

2. Represent Technical Debt on the Product Roadmap: Technical Debt should be represented on the product backlog and features on the roadmap; this indicates certain levels of proactiveness from the organisation in paying back the technical debt. Leaders should mandate their teams to articulate technical debt regarding its impact on business. For example, how does it affect time-to-market, product stability, or maintenance costs? These metrics make it easier to prioritise technical debt against other business initiatives on the Product Roadmap.

3. Reward and Celebrate Technical Debt Reduction: Fixing technical debt should be treated like every other business investment and, as a result, should have a clear return on investment. Some ideas for ROI include reduced maintenance costs, faster delivery times, and the ability to introduce new features with less effort.  Reducing Technical Debt will take away some time from the team’s capability to deliver new features. Leaders should support their teams in balancing short-term deliverables with long-term product health. Some approaches that should be considered include a phased approach where technical debt reduction efforts are integrated with ongoing feature development work.

Conclusion

If left unchecked, technical debt will severely hinder your business’s ability to deliver value, innovate, and grow. More importantly, you will lose customers to competitors if left unsolved. 

Executives can work alongside technical leaders to balance short-term gains with long-term product health by understanding its impact and encouraging open conversations around technical debt. The key is to treat technical debt as a strategic business consideration and take proactive steps to manage it, ensuring that your product remains competitive, scalable, and adaptable in an ever-evolving market.

Addressing technical debt may seem daunting, but it is an investment in your organisation’s future success.