Technical Debt: Everything you need to know in 4 Easy Points (2021)


If you are not from a software engineering background, it is highly probable that you have no idea whatsoever about technical debt and what it refers to. However, if you are wading into product management in the tech industry or just want a better idea of its functioning, knowing all about technical debt is certainly important and that is what this article seeks to achieve. Read on to explore the various facets of technical debt and better understand what it means in this technical debt for dummies article.

  1. What is technical debt?
  2. Types of Technical Debt 
  3. Causes of Technical Debt
  4. Measures of Technical Debt

1. What is technical debt?

The technical debt meaning has evolved over time due to a number of reasons and is often also referred to as code debt or design debt. To understand what is technical debt, one must keep in mind the simple phrase, ‘release now, fix later.’ The technical debt definition refers to a concept in software development that attempts to internalize the potential costs or consequences of a development choice that offers short-term benefits in the form of speedy delivery but would later have to be reworked.

One can also define technical debt as a situation that is created when the quality of a code is compromised in order to ensure faster delivery. This usually occurs when it more important to deliver the product as soon as possible, rather than flawlessly. 

The term technical debt was coined by one of the authors of the Agile Manifesto of Software Development, Ward Cunningham. To understand what is technical debt in Agile interpretation, one can refer to what Cunningham himself had to say about it. He believed that any sort of code that is not optimal for the task at hand and is delivered by taking short cuts generates a type of debt.

This debt is called technical debt and can be paid off by refactoring the code and ensuring that the shortcomings are adequately addressed. What is technical debt in scrum can also be understood in more detail with the help of the Scrum guide that offers product development and management framework within the Agile Manifesto? Over the years, several different approaches have been suggested with respect to technical debt which has also led to the understanding of certain types of technical debt. 

2. Types of Technical Debt 

You must now have some sort of working understanding of the meaning of technical debt and what it essentially refers to. At this juncture, it is important to also know the various tech debt types that exist in the world of software product management and the challenges that they pose to technical debt management. There are primarily three types of technical debt, deliberate, accidental, and bit rot.  

  • Deliberate technical debt, as the name suggests, refers to the voluntary sacrificing of code quality by product development teams in order to attain certain more important goals or targets, such as faster delivery or marketing constraints. In these situations, the team understands that certain parts of the code are sub-optimal and need improvement but chooses to work with a short-cut anyway. 
  • Accidental technical debt is the opposite of deliberate tech debt and is not a conscious decision taken by the developers. It is also called design debt and is the result of the software design or code becoming redundant or unusable in the future due to changing requirements or product evolution. If the code is well-written, this could easily be refactored incrementally, but if the code is not future-proof, such a debt would require huge efforts to repay.
  • Bit rot technical debt is a self-inflicted debt that is the result of constant incremental changes made to the code that causes the system to devolve into unnecessarily complicated components. This is often the result of too many individuals working on changes to the code without fully understanding the original design.
  • Experts have consistently maintained that this is one type of technical debt that must be actively avoided at all costs through proper and regular refactoring as the impact of technical debt of this kind can make it very difficult to modify or refactor the product. Avoiding bit rot tech debt is therefore considered one of the technical debt best practices in the industry.

3. Causes of Technical Debt

Now that you know the types of technical debt, you can read on to better understand what causes technical debt in the software industry.

  • Time constraints: Very often, developers are under pressure from clients or even their own marketing teams to deliver a product and this might often push them to consciously take on tech debt in order to meet deadlines.
  • Overly complex code: If the code that is being used involves a very complicated design, it is likely that it will be time-consuming and possess certain flaws that ensure some sort of technical debt when the product is released.
  • Poor alignment to industry standards: If the product does not meet the commonly accepted industry standards in terms of quality and efficacy, it leads to technical debt.
  • Lack of skill: If the development team lacks the skill and expertise to design the product efficiently, technical debt may be incurred.
  • Suboptimal code: If the code that is being used by the development team is not perfect and has room for improvement, technical debt is said to be incurred and this could be done either consciously or accidentally.
  • Irregular refactoring: If the development team does not make the necessary changes to the product and the code as the requirements change and evolve, a form of technical debt is created.
  • Insufficient testing: Another major cause of tech debt is the failure on behalf of the team to properly test and eliminate the loopholes in the design if any.

4. Measures of Technical Debt

Technical debt is therefore a crucial aspect of software development which makes it all the more important that an organization knows how to measure technical debt. Although there are a number of complicated variables involved in the process and tools to measure technical debt, it can also be reflected in the form of a simple technical debt ratio.

There are two costs that are involved in the calculation of this ratio which is the remediation cost and the development cost. Remediation costs refer to the cost incurred on the fixing of a software system and development cost refers to the costs of developing such software at the first instance. The equation to calculate the Technical Debt Ratio (TDR) can be represented as follows:

Technical Debt Ratio (TDR) = (Remediation Cost/Development Cost) x 100


After reading this article, we hope that you have a clearer and more solid understanding of the various aspects of technical debt and the important role it plays in software development and design.

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