Technical debt is used to define the obligations of a software company when it has opted for an expedient construction approach or design that has resulted in increasing the complexity and proved to be more expensive in the long run. The term ‘technical debt’ is supposed to be quite useful, as far as, communication with technical teams is concerned. It is helpful in providing a robust metaphor for effectively describing this concept to particularly the non-technical stakeholders.

“What can be added to the happiness of a man who is in health, out of debt, and has a clear conscience?”

-Adam Smith

Simply speaking, debt involves borrowing today intending and promising to make the repayments in the future. The debt would be making sense if a current borrowing would culminate in a better tomorrow, for instance, borrowing for purchasing a house or for pursuing a college education. Debt is usually bad if you are taking a debt today but it is leading to a relatively worse tomorrow, for instance, indulging in an expensive dining experience using your credit card knowing fully-well that you would not be paying off the expenses immediately.

In corporate terms, you must understand that debt could be good, provided it is incurred for funding investments which would be providing a greater return as compared to the total cost of your debt. It would be sensible if you plan to sell off the business much before your debt is due. The drawback associated with debt is that it involves a real expense which would be dragging profits and cash, restricting flexibility, and could even culminate in bankruptcy.

Financial debt is supposed to be another kind of debt and technical debt seems to have several similar features and must be managed, and measured. If financial debt or technical debt helps your organization to stay ahead of the curve, then it could be worth the effort.

But you must understand the fact that technical debt has its drawbacks that may lead to inefficiency and inertia like the instance when a specific department may not be interested in using another department’s software or when you keep delaying advancement numerous times for catering to short-term financial goals and targets.

What Actually Is Technical Debt?

Technical debt is supposed to be a term which is confined to the technical community and is in use since 1992 when a computer programmer Ward Cunningham had for the first time coined the phrase.  Technical debt or code debt or design debt is supposed to be a software development concept that is known to reflect the implied cost and expenses of extra rework resulting from opting for an easy resolution now instead of utilizing a better approach which would be involving a longer period of time.

Technical debt could be compared even to the monetary debt. In this context, you must understand that suppose the technical debt is actually not repaid on time, it could go on accumulating interest and it would get more difficult for implementing changes later on. You must appreciate the fact that if technical debt is not addressed or repaid, it would result in increasing software entropy. In this context, you must acknowledge the fact that technical debt is not essentially a bad thing. There would be situations when technical debt could prove to be a boon in moving projects forward. Learn more about perfect financial debt solutions by visiting

Simply put, technical debt involves incremental costs incurred and setbacks faced by your company due to shortcuts that were taken earlier in the decision-making process or the implementation and maintenance processes. These compromises could perhaps have felt reasonable at the time because they saved time and money, and they may still work out if the risk is a calculated one, but otherwise, they may cost you in the long run. Typical examples of these are overly complex code that could have been simplified given some time and effort, or systems that have been imperfectly implemented. Technical debt is because of a host of reasons like time to market factors, inefficiencies, or using obsolete versions of software etc.

Types of Technical Debt

Types of Technical Debt

We know that clever financial debt could be helpful in reaching major objectives in life much faster. Similarly, you must appreciate that type of technical debt are not bad and if you manage them efficiently they could yield immense benefits for your organization. This is especially true for most fast-growing organizations that have a crucial requirement for shipping products early for determining market or product fit, fulfilling customer needs, and grabbing emerging opportunities. You need to be extraordinarily clever regarding incurring technical debt. Over a period of time, you know that accumulated debt could be slowing down your shipping speeds, end up causing developer morale problems or completely drown your business.

1. Deliberate Tech Debt

Engineers are aware of the fact that there is a right way of doing something and invariably there is a faster way of doing the same thing. In several cases, the faster way could possibly be the right way, however, on some occasions; the team would be deliberately doing something wrong simply because they require delivering product quickly to the market. So, technical debt is often incurred for reducing time to market.

2. Accidental Tech Debt

While designing and crafting software systems, it is critical to find the right balance between planning well ahead and also, future-proofing all the designs with fast delivery and simplicity. This could prove to be quite a tricky balance and it is quite difficult to get things right all the time. With the change in requirements and evolution of systems, you may understand that your design has some flaws, or the new functionality seems to be pretty challenging and exceptionally slow to implement. You must keep in mind that a really good, flawless, and original design would easily be refactored incrementally. However, things could prove to be difficult and you may have to get involved in a more serious and significant refactor.

3. Bit Rot Tech Debt

This type of technical debt would be occurring over time. A system or a component gradually culminates in undesirable complications via several incremental changes and these could be aggravated when those people are involved who do not fully understand or appreciate the original design. The symptoms involved are cargo-cult programming and copy-paste etc.


When tech debt is categorized it would help in strengthening your team and generate really productive conversations. Technical debt must be present in systems. It is crucial for you to understand and appreciate exactly how the technical debt is retarding the progress of your team and focus on balancing your endeavors of delivering features with a boost in overall productivity basically in the mid-term to the long-term.

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