Technical Debt: What It Actually Costs Your Business

What Technical Debt Actually Looks Like

Technical debt isn't always obvious. It rarely shows up as "the code is bad" — it manifests as business symptoms: features take longer than expected, bugs keep recurring in the same areas, new developers take months to become productive, and the team is afraid to touch certain parts of the system.

Common forms include: outdated dependencies with known security vulnerabilities, copy-pasted code that needs to be changed in 12 places for a single update, missing tests that make every deployment a gamble, and tightly coupled systems where changing one thing breaks three others.

The Real Cost: It's Not Just Developer Time

The direct cost of tech debt is easy to calculate: engineering hours spent on workarounds, bug fixes, and fighting the codebase. But the indirect costs are often larger: missed market opportunities because features ship too slowly, customer churn from unreliable software, security incidents from unpatched vulnerabilities, and difficulty hiring because good developers don't want to work in a legacy codebase.

We've seen companies where 60-70% of engineering time goes to maintenance and firefighting, leaving only 30-40% for actual feature development. That's like paying a full engineering team but only getting a third of their capacity in return.

Strategic Approaches to Paying Down Tech Debt

The answer isn't to stop everything and rewrite from scratch — that's almost always a mistake. Instead, treat tech debt like financial debt: make regular payments while continuing to invest in growth.

The 20% rule works well for most teams: dedicate 20% of each sprint to tech debt reduction. This is enough to make steady progress without stopping feature development. Focus on the areas with the highest interest rate — the code that changes most often and causes the most friction.

For severe cases, the strangler fig pattern lets you incrementally replace a legacy system with a new one. New features get built in the new system, and legacy functionality gets migrated over time. At no point does the old system need to be "finished" — it just gradually shrinks.

When to Consider a Full Rebuild

Sometimes the debt is so severe that incremental improvement isn't feasible. Signs that a rebuild might be the right call: the tech stack is no longer supported or staffable, the architecture fundamentally doesn't support your current product requirements, or the team spends more than 70% of their time on maintenance.

Even then, a phased rebuild (strangler fig) is usually better than a ground-up rewrite. The risks of rewrites are well-documented: they take longer than expected, they lose institutional knowledge embedded in the old code, and the business has to maintain two systems during the transition.

If you're considering a rebuild, talk to us. We can assess your current system, identify the highest-value targets for modernization, and recommend an approach that minimizes risk.