Unpacking Technical Debt: The Hidden Costs Of Cutting Corners

We've All Done It...

Just like how we sometimes ignore household repairs because of lack of time or resources, companies often neglect their technical debt by postponing necessary updates or improvements. This can be due to competing priorities, resource constraints, or even pride in past makeshift solutions. However, just like with household repairs, neglecting technical debt can lead to bigger problems down the line.

What Is Technical Debt?

Technical debt refers to the price organizations pay to maintain and upgrade their systems to meet changing demands. It is a result of the trade-off between taking shortcuts in order to move faster and deliver today and facing the consequences of those imperfect solutions tomorrow.

Why is it common?

Perfect is the enemy of done. Technical debt is inevitable when you need to move fast. Developing the “perfect architecture” is time consuming and can restrain continuous development.

Let’s be clear: Every growing business has some level of technical debt. It’s not a matter of if technical debt will need to be addressed but when.

Why is it important?

Shortcuts and non-scalable solutions in the development process can accumulate and they must be addressed to keep the codebase healthy and scalable.

Managing Technical Debt

Contrary to common perception, technical debt is not always negative, it's a balance of trade offs. In the right amount, it can enable a business to grow rapidly by allowing them to quickly launch products, be first to market, or gain an edge without sacrificing the opportunity by striving for perfection.

That said, we’re not playing the devil’s advocate here. Excessive technical debt can obstruct progress. Companies must be vigilant because it isn’t without its issues:

• Technical debt can blow up at any moment – picture an e-commerce ruining a CyberMonday, their busiest sales day, and causing a loss of millions of dollars and loyal clients.
• Technical debt often requires redirecting valuable and costly data engineering hours to repairs instead of critical business, strategy, and operational tasks. This is both expensive and inefficient.
• Mckinsey carried out a survey where around 30% of CIOs believed that more than 20% of their new tech product budget was diverted to resolving technical debt. They estimated that debt amounted up to 40% of the value of their entire tech estate.

Tackling Technical Debt

Let's dive into the process of Discovery, Priorities, Planning, and Operationalization.

Discovery & Classification

The first step is to diagnose the organization’s debt. Essentially this means following a discovery process which involves asking a lot of questions (below are some examples of these questions)

Before embarking on any project, do your homework. Take the time to mount a quick discovery process. Ask yourself some questions:

• What technical debt have you already accumulated?
• What type of debt is it? (There are six types of debt see below)
• How complex is it?
  • Do we currently have the resources to deal with it?
  • Can we see a clear beginning and end to this debt?
  • How much manpower is needed to solve this debt?
  • How much time is needed to solve this debt?

Getting Your Priorities Straight

Great Job! You’ve successfully classified and ordered your debt. You know what type of debt it is and how complex it is to solve. The next step is to prioritize it so you can design an action plan to manage it. The guiding question for this step is: Why should this technical debt be addressed now? Consider:

• Is there something to gain from not addressing this today?
• Does it impact the final user/client?
• How many teams, areas, or final consumers actually benefit from this technical debt being addressed today? Is it an organizational-level pain point or just for one area or subgroup?
• Are the benefits solely technical? What other types of benefits does it bring to the table?
• Why should this technical debt be addressed now?

Action Plan

After classifying and prioritizing your technical debt, the next step is organization. This means creating a clear action plan with specific goals, timelines, and people responsible for each task. The key is to establish a process that works for your organization and ensures accountability to achieve the desired outcomes.

Operationalization

Fast-paced organizations that are scaling are the perfect breeding ground for technical debt. Sudden surges in user bases, frequent feature releases, and updates make it easy for debt to silently grow.

To keep your technical debt under control and prevent unexpected challenges, it is crucial to continuously follow the three-step process of Discover, Classify, and Prioritize. Technical debt management is essential for ensuring the growth and changing needs of your company are not hindered by accumulated debt.

Technical Debt And The Modern Data Stack

Aside from implementing a continuous monitoring process, there are other ways of tackling or proactively managing technical debt. Evolving or Implementing a Modern Data Stack can help businesses with technical debt issues in several ways:

• Standardized data formats avoid data integration and analysis issues that can generate technical debt.
• Consolidated data sources and improved data management reduce the likelihood of duplicated or conflicting data. A single source of truth facilitates data maintenance and management.
• Streamlined workflows and automation reduce the risk of manual errors and generation of technical debt.
• Modern Data Stacks are built to scale easily. A scalable infrastructure avoids technical debt generated when systems can’t keep up with increased volumes of data or become outdated.
• If required, Modern Data Stacks can enable real-time analytics. This means faster, informed decisions.

In summary, a modern data stack can assist companies in minimizing technical debt while moving through a fast development phase by enhancing data management, streamlining workflows, standardizing data formats, providing adaptable infrastructure, and allowing real-time data analysis.

Strict About The Outcome, Flexible About The Process.

Has your technical debt become overwhelming? Want to proactively tackle technical debt management before it becomes an issue? We’re here to help! Don’t take it from us, see how we helped ClassDojo with their technical debt implementing a Modern Data Stack:

• From ClassDojo’s Point Of View
• From Our Point of View
• From Amazon Web Service’s Point Of View

As your on-demand expert data team, Mutt Data can help you crystallize your AI strategy through the design and implementation of technical capabilities and best practices. We study your company’s business goals to understand what has to change so we can help you accomplish it through a robust technical strategy with a clear roadmap and set of milestones. Talk to one of our sales reps at hi@muttdata.ai or check out our sales booklet and blog.

See It To Believe It! Check Out Our Success Stories

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• Supply Chain & Delivery: Habitat Logistics
• Fintech: Ank
• Health: Sirum
• E-Commerce: Mercado Libre
• Amazon Web Services Published Success Stories: ClassDojo & Ank