Technical Debt Explained: The Hidden Cost Slowing Down Your Software Projects

• Software
• November 18, 2025

by Pratik Patel

Developing and fixing software at speed is great, but choosing a shortcut to that leaves a trace. That trace is what we call technical debt (or tech debt), which is a hidden cost of choosing quick fixes over a standardized software maintenance process.

At the start, it feels like cost saving, but in the long run, it acts as an accumulated “interest” you pay for quick development decisions made under pressure to deliver faster.

Technical debt is not just a developer issue but a business liability, slowing down a product’s performance, inflating maintenance costs, and delaying go-to-market timelines. It’s not different than financial debt, eroding team morale, customer experience, and ultimately, competitiveness.

But not every technical debt is bad. Sometimes, taking it on strategically helps companies launch faster and capture market share early. The key lies in understanding, tracking, and managing technical debt before it starts dictating your roadmap instead of enabling it.This blog unpacks everything you need to know about what is technical debt in software development and how legacy software modernization services can help to solve it.

What is Technical Debt in Software Development?

Technical debt definition refers to the future cost incurred by taking shortcuts or making suboptimal design decisions during software development to achieve short-term solutions to technical issues.

It is quite similar to a real-life scenario of financial debt, where you take a loan for quick gain, which you also have to repay, but with interest.

In tech debt, interest is equal to increased effort, more time, and higher costs for future maintenance, bug fixes, and integrations.

Types of Technical Debt

Technical debt comes in various forms, including code, documentation, architecture, infrastructure, security, design or UX, testing, and people debt.

Let’s understand all the types or examples of tech debt:

• Code Debt occurs when taking shortcuts in the codebase, such as duplicating code or writing code that is complex to maintain.
• Documentation Debt occurs when software documentation is missing, outdated, or incomplete, making it hard for developers to understand the software well.
• Architecture Debt occurs when you make compromises in software architecture at the start to save costs. But in the long run, it leads to scalability issues and blockages to future enhancements.
• Infrastructure Debt occurs when you use outdated hardware, dependencies, or misconfigured servers that impact stability and reliability.
• Security Debt occurs when you leave software vulnerabilities untouched or postpone security measures to avoid incurring the cost of that time. But this mistake can put your software at risk of breaches.
• Design or UX Debt occurs when you implement quick, piecemeal design changes to a user interface without thinking about the overall UX impact or unknowingly trying out UI design mistakes.
• Testing Debt occurs when you don’t fully leverage your STLC process, leaving bugs that become roadblocks.
• People Debt stems from knowledge gaps, poor communication, or team dynamics that affect overall productivity and code quality.

What Causes Technical Debt?

Technical debt in software is caused by rushed development and deadlines, poor coding practices, insufficient testing, lack of documentation, outdated technologies, and suboptimal design choices.

Let’s understand these causes of technical debt:

Rushed Development to Meet Deadlines

Considering the increased competition in the digital transformation market, every business is in a hurry to launch its software faster to gain a competitive advantage.

In order to satisfy their needs, developers ship features faster with unoptimized code, skipped documentation, and minimal testing. These shortcuts, in the long run, turn into maintenance headaches.

Constantly Changing Requirements

We all know that today, technology is evolving faster, and in order to catch up with its speed, business goals and customer demands are shifting rapidly. When it happens in mid-project, the software developers you hire do adapt quickly, but only a few manage to do so cleanly.

These frequent pivots and feature revisions create fragmented logic, unused code, and misaligned architecture, leading to tech debt.

Also Read: How Does the Software Discovery Phase Help to Scope Your Development Project?

Inadequate Testing and QA Practices

The same hurry to launch software faster often makes operations teams skip rigorous software testing. This skip of the full-cycle QA process may sound time-saving today, but it leads to more defects and regressions later. Plus, the cost to fix those defects later on compounds across releases.

Outdated or Incompatible Technology

Rushed development always leads developers to create architecture and choose app frameworks that make their development faster without considering future possibilities.

This leads them to use legacy frameworks, libraries, and tools that may not provide support in the long run, adding up complexity and risk. Over time, it makes software systems harder to integrate, scale, or secure, eventually piling up technical debt with every update.

Poor Documentation and Knowledge Gap

In a hurry to launch software faster, developers often fail to communicate well with the technical documentation team, leading to skipped or poor documentation.

Because of this, in future scenarios, the existing dedicated software development team may lack understanding of what they did in the start, or the new team may find it difficult to understand the software programming well.

Misalignment Between Business and Engineering Teams

When business leaders push for faster delivery without considering technical implications, development teams are forced into trade-offs. This tension between short-term gains and long-term stability is one of the biggest contributors to unmanaged tech debt.

Also Read: Common App Development Mistakes To Avoid That May Lead to Tech Debt

The Hidden Costs of Technical Debt in Software

The hidden costs of technical debt in software development are financial, operational, strategic, and human costs. It leads to rising maintenance and operational costs, slower development velocity, increased security and compliance risks, developer burnout, lost innovation, and opportunity costs.

Let’s know these hidden costs of tech debt more clearly:

Rising Maintenance and Operational Costs

Every shortcut you choose to develop software or fix a bug quickly adds an extra layer of complexity. Over time, as their performance degrades, you’d find the development team spending more time maintaining code than enhancing it.

Plus, bug fixes would take longer, and you also have to spend more time fixing code for API integration and even to make minor changes. All of which inflate your operational expenses.

Slower Development Velocity

With each quick joint to temporarily fix the bug, the code gets more tangled up. As the code grows like that, fixing even a small update by making changes to the core would make developers hesitate, as it might introduce risk.

Increased Security and Compliance Risks

Use of outdated dependencies, unpatched frameworks, and legacy interactions creates blind spots that attackers love to exploit. Here, tech debt turns into security debt, exposing your business to compliance violations and reputational damage.

Declining Product Quality and User Experience

Compromising on the app UX design to save time and cost in the beginning often leaves users frustrated and can even lose their trust in the product. This churn turns into accumulated UX debt.

Developer Burnout

Nobody likes to constantly work with messy, fragile code because it’s mentally exhausting. Due to that, talented engineers either disengage or leave the project, taking critical system knowledge with them. This adds up to more time in hiring and onboarding new developers, indirectly amplifying your existing debt.

Lost Innovation and Opportunity Costs

Every hour spent refactoring or debugging is an hour not spent building the next feature or exploring a new market. Over time, technical debt becomes a growth tax, slowing your ability to respond to change, seize new opportunities, or adapt to software development trends.

Also Read: Application Modernization Strategy to Deal With Tech Debt

How to Measure Technical Debt?

You can measure technical debt by using quantitative metrics (like technical debt ratio (TDR), code quality metrics, etc.) and qualitative and process-based methods (like code reviews, incident tracking, sprint analytics, etc.).

Let’s understand each method and metric to measure technical debt:

Quantitative Metrics

• Technical Debt Ratio: It calculates the ratio of the estimated cost to fix the codebase to the total cost of software development. It should be below 5%.
• Code Quality Metrics: It makes you use tools to measure aspects like code complexity, duplication, and test coverage.
• Lead Time for Changes: This metric tells you to track the time it takes to deliver new features. If the lead time is increasing, it must be a signal of mounting debt.
• Defect Ratio: This metric measures the number of defects against the size of the codebase.

Qualitative and Process-Based Methods

• Code Reviews: You can manually review the software code to identify “code smells” or bad practices that can lead to tech debt.
• Developer Feedback: Survey developers at the end of each sprint to understand their pain points and parts of the codebase that are complex to work with.
• Incident Tracking: Enforce continuous monitoring on your software to check for frequent or recurring bugs in it, causing incidents, which can be an indicator of underlying debt.
• Sprint Analytics: It gives insights into the ratio of time spent on refactoring versus implementing new app features.

How to Manage and Reduce Technical Debt?

You can manage and reduce tech debt by allocating dedicated time, prioritizing based on business impact, performing regular refactoring, and implementing quality gates. You can also conduct rigorous code reviews, update documentation, and foster a culture of quality to manage and reduce technical debt.

Let’s understand ways to manage and reduce tech debt:

• Allocate dedicated time in each sprint (e.g., 20%) to address technical debt.
• Prioritize code parts that are significantly slowing down development, posing a security risk, or impacting the customer experience.
• Regularly refactor the software (though small and incremental) with every new feature to leave the code cleaner than you found it.
• Implement automated quality checks (gates) in your CI/CD pipeline to prevent clean and fixed problematic code from reaching production.
• Update software documentation every time you make changes to its code while ensuring it’s accurate and helpful to reduce knowledge gaps and speed up issue fixing.
• Create a shared metric that reflects both business outcomes and technical health.
• Train your team on software development best practices and reward maintenance work to prevent the accidental accumulation of new tech debt.
• Opt for enterprise application modernization to manage accumulated technical debt.

Also Read: AI in Legacy System Modernization: Overcoming Challenges, Driving Growth

How to Prevent Technical Debt in the First Place?

To prevent technical debt in the first place, you have to design software with scalability in mind, set clear coding and documentation standards, and prioritize quality in project timelines.

Further, you should integrate testing and automation early, keep dependencies and frameworks up to date, foster cross-functional collaboration, and build technical debt monitoring into governance.

Let’s know ways to prevent technical debt in the first place:

• Invest time upfront in designing flexible, modular systems that can evolve with business needs.
• Define coding conventions, enforce peer reviews, and make documentation a mandatory deliverable.
• Align leadership goals with realistic timelines that include code review buffers, testing, and refactoring.
• Reward teams for building top-notch software products, not just for building fast.
• Implement automated unit, integration, and regression testing from day one to catch and fix issues sooner.
• Allocate time each quarter for version upgrades, dependency audits, and deprecation checks to keep your tech stack healthy.
• Encourage transparent conversations about trade-offs, cost implications, and long-term system impact before committing to shortcuts.
• Establish regular code health reviews and tie KPIs to technical excellence to build tech debt monitoring into governance.

Also Read: Benefits and Challenges Associated With Legacy System Modernization

Real-World Case Example of Technical Debt

Big companies like Southwest Airlines, Adobe Flash, and many others have faced destructive tech debt in order to save some money or time. Some of them survived, and some saw their last day in the market.

So, let’s check out real-world case studies of technical debt:

1. Southwest Airlines

Southwest Airlines is the world’s largest operator of the Boeing 737 Next Generation family. In late December 2022, it faced a major breakdown during which more than 16,700 flights were cancelled. The main reason was its outdated crew-scheduling system – SkySolver – designed in the 1990s, which could not cope with storm-related disruptions.

Because of this, Southwest faced pre-tax losses of around US$825 million across lost revenue, refunds, premium pay, and operational chaos. Beyond the outdated system, its root cause was a massive technical debt from deferred updates and insufficient investment in core operational systems.

With a budget of over $12 billion, which it could allocate to keep its basic services running, be tech-debt free, and spend on upgrading services and buying a new aircraft, the company lost around $1 billion or more on just paying for not being able to provide services.

Hence, after realization, it committed over $1.3 billion to modernize its IT systems entirely along with cloud migration, big data, and AI development services.

In short, Southwest is tackling its technical debt by treating it as a business risk rather than just a technical problem, making significant financial and strategic investments to prevent a recurrence of the 2022 crisis. 

2. Adobe Flash

Adobe Flash, once a dominant platform for web content, became a prime example of the consequences of unmanaged technical debt. Despite its widespread use, Flash suffered from security vulnerabilities and scalability issues, which were left unaddressed over time. As the internet evolved, newer technologies like HTML5 began to surpass Flash in performance and security.

When Adobe officially terminated Flash in 2020, many organizations, including those with archived content like 9/11 news coverage, found themselves unable to access critical resources. The technical debt of relying on outdated, unsupported technology became glaringly apparent. Legacy systems were unable to adapt, leading to significant disruptions.

Post termination, many organizations were forced to modernize by migrating their content and systems to newer, more secure frameworks such as HTML5, WebGL, and modern video players.

This shift underscored the importance of proactive modernization and continuous technical debt management as part of long-term digital resilience.

The Solution? Opt For Legacy System Audit and Modernization Services At MindInventory

Every outdated system, every quick fix, and every deferred update slows your ability to compete. The longer it lingers, the harder and more expensive it becomes to move fast again.

That’s where MindInventory steps in. Providing software modernization services, we help enterprises confront the hidden layers of technical debt through comprehensive legacy system audits.

Our process involves deep analysis of your software architecture, dependencies, and performance bottlenecks that limit scalability and innovation.

Based on this assessment, we help you decide whether to optimize the existing system or replace it entirely, ensuring your technology supports growth.

FAQs About Tech Debt