How to Manage Technical Debt: The Hidden Issue that Affects all Aspects of Business

Many upper-level executives might believe that technical debt is solely an IT problem that should concern only the software development department. If this is something you—or someone on your leadership team—believe, then this article is especially important. We’ll explain why technical debt is a challenge that affects the entire organization, not just IT, and offer strategies to address it before it impacts your long-term success.  

What is Technical Debt? 

Before we dive into definitions, it’s worth understanding just how significant the problem has become. In 2022, the Consortium for IT Software Quality (CISQ) estimated that unresolved technical debt cost U.S. companies a staggering $1.52 trillion annually, with the average enterprise carrying about $3.61 million on its books. 

But what are we really talking about when we say, “technical debt”? “

An easy way to understand technical debt is to think about it like 'borrowing' against future software productivity for a quick gain today.

In more exact terms, technical debt is the accumulation of sub-optimal or expedient solutions in software development that can slow future progress and increase costs. It represents the extra development work that arises when a team chooses a quick and easy solution now instead of using a better approach that would take longer. 

However, measuring technical debt isn't always straightforward. Unlike financial debt, it doesn’t appear neatly on a balance sheet. Technical debt is often abstract, embedded in code quality, architecture decisions, or team workflows, making it difficult to quantify precisely.  It tends to surface only when it starts to slow development, inflate costs, or hinder product delivery. 

However, just like financial debt, technical debt accrues costs over time. These costs can take many forms, including: 

•  Frequent software patches 

• Growing maintenance workloads 

• The need for major code restructuring 

•  Persistent bug fixes 

•  Slower, more complex development cycles 

What factors cause technical debt? 

Although faulty code is often blamed for technical debt, the reality is more nuanced. Even well-written, perfectly functional code can contribute to debt under the right (or wrong) conditions. 

It is true that one of the most common scenarios in software development is the pressure to deploy fast. Programmers aren’t allowed the time needed to create good code, so teams take shortcuts to meet delivery deadlines, and postpone best practices like refactoring, testing, or documentation.  

However, technical debt doesn’t always stem from bad engineering; it often arises from organizational constraints, shifting priorities, or short-term decisions made under pressure. Here are some of the most common causes of technical debt: 

1. Time Pressure / Rushed Deadlines: Teams take shortcuts to meet delivery timelines, postponing best practices like refactoring, testing, or documentation. 

2. Lack of Technical Planning: Poor architectural decisions or the absence of long-term thinking often lead to fragile or unscalable systems. 

3. Evolving Requirements: As business needs change, software is often patched or extended in ways that deviate from the original design, introducing complexity. 

4. Insufficient Code Reviews and Testing: Skipping peer reviews or writing minimal tests allows suboptimal code to enter the codebase unchecked. 

5. Legacy Code and Outdated Technology: Continued reliance on old systems or unsupported libraries makes development harder and costlier over time. 

6. Low Developer Experience or Turnover: Inexperienced developers may write inefficient or overly complex code; frequent turnover leads to knowledge loss and inconsistent practices.  

7. Poor Documentation: Without clear documentation, understanding and modifying code becomes time-consuming, increasing maintenance debt. 

8. Inadequate Tooling or Infrastructure: Lack of automation, CI/CD, or performance monitoring tools makes detecting and addressing issues slower and more error-prone. 

9. Misalignment Between Business and Engineering: When leadership undervalues code quality or ignores technical input, development decisions tend to favor speed over sustainability. 

10. Deferred Refactoring: Continuous delivery of features without revisiting or improving the underlying code accumulates hidden complexity. 

 How to Manage Technical Debt 

Many would argue that technical debt is the price you pay if you want to be ahead of the curve. And while some debt is inevitable and even necessary in fast-paced environments, it’s important to be smart about it. Keep it visible, measurable, and under control.

1. Get Analytical About Measuring Your Technical Debt

You can’t manage what you don’t measure. While technical debt is hard to quantify, organizations can use proxies and metrics to track its impact. These include code complexity scores, number of known bugs, frequency of rework, developer time spent on maintenance, and even qualitative developer feedback. Tools like SonarQube, Code Climate, or proprietary dashboards can surface hotspots in the codebase. More advanced teams assign dollar values to debt-related inefficiencies, helping stakeholders understand the financial tradeoffs involved. 

2. Apply Governance to Tech Debt

Without governance, technical debt tends to grow unchecked. That’s why it’s crucial to build technical debt management into your development lifecycle. This includes defining ownership (e.g., tech leads or architecture committees), establishing review checkpoints for debt accrual, and creating policies around acceptable vs. critical debt. 

Strategic governance also involves making technical debt part of sprint planning, architecture decisions, and quarterly roadmaps, ensuring it’s visible and addressed at all levels of the organization. 

3. Prioritize What You Pay Down

Not all technical debt is equally urgent. Some may slow you down daily; others might sit quietly until they cause major failures. The most effective teams triage debt based on business impact. For example, debt that blocks key features, causes bugs in production, or increases cloud costs may need immediate attention. Less critical items can be logged and scheduled for future sprints. Use effort-impact matrices or ROI models to guide these decisions, and always align debt pay-down with business objectives. 

4. Check Modularity and Design Patterns

One of the best defenses against technical debt is building modular, well-architected systems. When components are decoupled and follow proven design patterns (such as MVC, microservices, or hexagonal architecture), they’re easier to update, test, and refactor.  

(Read Korber’s Success Story to learn more about how Jalasoft can help you with microservices)

Modular design helps reduce the spread of debt and makes targeted improvements more feasible. Regular architecture reviews and codebase audits can ensure your structure remains flexible, scalable, and resilient to long-term complexity. 

5. Document Debt

Technical debt that isn’t tracked is almost always forgotten. Encourage your teams to document known debt clearly, whether in the code itself (using comments or TODOs), internal wikis, or backlog tools like Jira. This not only helps current team members stay aware of debt trade-offs but also creates transparency for future teams and leadership.  

Some organizations even maintain a “technical debt register” to track items, rationale, estimated cost, and repayment plans. 

Consequences of Technical Debt  

 One of the clearest ways technical debt hurts profitability is by reducing developer productivity and increasing operational costs. A widely cited survey by Stripe found that engineers spend about 33% of their time dealing with maintenance issues and technical debt instead of building new features. Similarly, McKinsey Digital reported that organizations with high levels of tech debt spend ~40% more on software maintenance than their peers.  

In other words, nearly half again as much budget is consumed just keeping the lights on due to inefficiencies and defects introduced by technical debt. 

However, as we’ve stated priorly, technical debt is not only an IT concern, as it can also affect the company’s ability to acquire new customers.  A legacy platform with significant architectural debt may take weeks or months to implement a new feature that a leaner competitor can roll out in days. This hampers a business's ability to meet customer needs, thus directly impacting the top line. 

This is not only a legacy software issue. When developers are tied up resolving technical debt (e.g. fixing bugs, restructuring code, etc), they have less time to develop new features and innovations. McKinsey’s analysis shows high-debt teams deliver new features 25–50% slower than those with manageably low debt. Similarly, in an OutSystems survey report, 61% of IT leaders said technical debt was dragging down their company’s performance and ability to respond to changes. 

From a market competitiveness standpoint, organizations encumbered by high technical debt often find themselves stuck in a defensive position: their development teams spend much of their time “keeping the ship afloat” (bug fixes, patching, performance tweaks) rather than delivering differentiating value. McKinsey notes that cutting back tech debt can “free up engineers to spend as much as 50% more of their time on value-generating work” and dramatically improve reliability and uptime. 

In financial terms, resolving technical debt is an investment in future profitability: more developer time on new features can translate to faster revenue growth, and improved system reliability can protect revenue by avoiding costly outages. Thus, managing technical debt is increasingly seen as integral to maintaining competitiveness and long-term financial health in the software industry.

Quantitative Impact of Technical Debt on Software Organizations

Conclusion: Turning Technical Debt into Competitive Advantage 

Companies that proactively modernize their software and refactor accumulated technical debt consistently report a sharper ability to innovate. By freeing engineering capacity from endless maintenance loops, they unlock bandwidth value‑creating features, data‑driven experimentation, and strategic initiatives that move the business forward. 

 The pay‑offs are clear: faster time‑to‑market, happier customers, and healthier profit margins. In short, turning down the "interest payments" on debt gives your organization the freedom to invest in growth. 

 At Jalasoft, we specialize in helping companies transform legacy codebases, implement modular architectures, and embed governance practices that keep debt under control. Our Top 2% Latin American talent is ready to jump in. 

Ready to turn technical debt into a competitive advantage? Reach out today, and let’s craft a roadmap tailored to your goals.