Nowadays, it is almost inevitable that companies make compromises when developing their IT infrastructure. Quick fixes are often favored to address urgent issues or introduce new features. This leads to technical debt. This “legacy debt” slows down a company’s efficiency, ability to innovate and competitiveness in the long term. This article therefore explains what technical debt is, how to identify and prioritize it, and what steps are necessary to reduce this debt.  

What is technical debt? 

Technical debt is the term used to describe the costs and risks that arise when companies use short-term, sub-optimal technical solutions instead of choosing more robust, long-term alternatives. Similar to financial debt, technical debt leads to “interest payments” – additional maintenance costs, limited flexibility and a more cumbersome IT infrastructure that can hinder the development of future projects. In contrast, a gap analysis, for example, refers to the identification of the gap between the current state of a company or system and the desired target state. It is a strategic tool for identifying potential for improvement in various areas – not only in IT – and taking measures to close these gaps. 

Examples of technical debt:  

  • Outdated code or software that does not comply with current standards 
  • Insufficiently documented processes or systems that are difficult to maintain or expand 
  • Quickly implemented but poorly optimized software solutions that are inefficient in the long term 

While some technical debts are unavoidable and are deliberately incurred as short-term solutions, they can lead to significant problems in the long term if they are not specifically addressed. 

Why is technical debt analysis important? 

The analysis of technical debt is crucial to enable companies to modernize their IT infrastructure and make it fit for the future. Technical debt affects all areas of a company – from software development and customer support to strategic innovation projects. 

Increasing efficiency  
The greater the technical debt burden, the more difficult it becomes to develop new functions or systems. Developers and IT teams spend more time maintaining legacy systems and fixing bugs, which inhibits productivity and slows down the pace of innovation. 

Reducing risks 
Outdated systems pose significant security risks and are prone to errors and failures. A systematic analysis of technical debt helps to identify potential weaknesses at an early stage and rectify them in a targeted manner. 

Cost control 
The long-term costs of technical debt can be enormous. Maintenance work, system failures and the need for emergency solutions lead to higher operating costs. By reducing their technical debt, companies can save money in the long term. 

Steps for technical debt analysis

1. Identification of technical debt

The first step in the analysis is to identify all areas where technical debt exists. This can be done through regular code reviews, system audits and discussions with developers and IT teams. Important questions here are: 

  • Which systems or processes require excessive maintenance? 
  • Which parts of the infrastructure are outdated or inefficient?
  • Are there areas that are delaying or hindering the development of new features? 

Support tools:  

There are specialized tools for automated detection of technical debt that analyze code quality, security vulnerabilities and maintainability issues. Some common tools are: 

  • SonarQube: Provides comprehensive insights into the state of the code and identifies problematic areas. 
  • Code Climate: Monitors code quality and provides indications of technical debt buildup. 
  • Jira (or other project management tools): Can be used to document and prioritize technical debt in the form of tickets or tasks. 

2. Classification and prioritization

Once technical debt is identified, it needs to be classified and prioritized. Not all technical debt is equally important and it is crucial to tackle the most urgent issues first. Factors such as urgency, risk and business impact should be considered. 

Criteria for prioritization:  

  • Business impact: which technical debt has the greatest negative impact on productivity, customers or business results?  
  • Cost of resolution: How costly is it to resolve the technical debt?  
  • Risk and urgency: Which technical debt poses an immediate risk (e.g. security vulnerabilities or high susceptibility to errors)?

A common model for prioritizing technical debt is the Eisenhower matrix, in which debt is classified according to its urgency and importance. This method helps companies to focus on the most urgent and important problems. 

3. Creation of an action plan

Once the technical debt has been prioritized, an action plan must be created to fix it. This can be done through incremental changes to the IT infrastructure or through large-scale projects such as migration to a new platform or the complete redevelopment of a system. 

Steps for creating an action plan:  

  • Definition of objectives: What are the goals to be achieved by reducing technical debt (e.g. lower maintenance costs, higher security, better scalability)?
  • Setting a timetable: In what timeframe should the most important technical debt be reduced? This should be realistic but ambitious.  
  • Allocation of resources: Which teams or employees are responsible for eliminating the technical debt, and which tools or budgets are required? 

4. Implementation and monitoring

Reducing technical debt is often a long-term project that requires constant attention. It is important to regularly monitor progress and ensure that the plan is being adhered to. 

Continuous monitoring: 

  • Regular reviews: Conduct regular reviews to ensure that technical debt is not being built up again. This can be done through automated tools or regular IT team meetings. 
  • Ongoing communication: It is important that management and the affected teams stay informed about progress. This creates transparency and promotes understanding of the importance of technical debt reduction. 

Challenges in reducing technical debt    

1. Short-term thinking

The challange:

Often, technical debt reduction is postponed as short-term projects or quick fixes are favored. However, this leads to technical debt continuing to grow and the problem getting bigger. 

The solution:

It is crucial to promote a long-term mindset and consider technical debt reduction as an integral part of the company’s strategy. Clear targets and regular progress reviews will help to keep the problem on track. 

2.  Lack of resources

The challange:

Eliminating technical debt requires time, budget and qualified staff. Often, however, these resources are not sufficiently available.

The solution:

Organizations should ensure that resources are allocated specifically to address the most pressing technical debt. This can be done by setting clear priorities and involving external consultants or developers.

3. Lack of transparency

The challange:

Technical debt is not always visible at first glance and it can be difficult to understand its scope and impact on the business.

The solution:

Regular code and system audits and the use of code quality monitoring tools can help to make technical debt visible. Transparent reporting and communication within the company are crucial to raising awareness of technical debt. 

Conclusion and recommendations for action 

Technical debt is an inevitable part of business development, but can have serious consequences if it is not regularly analyzed and reduced. Companies that proactively tackle their technical debt can increase their efficiency, reduce costs and secure their ability to innovate in the long term. 

Summary of the most important points:

  • Technical debt arises when short-term solutions are not sustainable in the long term. 
  • Systematic analysis and prioritization of technical debt is crucial for reducing it. 
  • Tools and clear processes help to make technical debt visible and eliminate it efficiently.  

Do you have an overview of your technical debt? Start now with a comprehensive technical debt analysis and create a future-proof IT infrastructure that will strengthen your company in the long term. Contact us today for a consultation! 

Tags:
#Data integration #Digitalization #Innovation #Tools

About the author

Mathias Herrmann

CEO at ALLEHERZEN

Mathias Herrmann is an internet entrepreneur going back to the Internet’s early days with a deep interest in digital and future technologies. For over 20 years, he has been helping companies make the most of their data by forging innovative solutions – without forgetting the people behind the data.

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