As technology companies continue to deliver innovative products, often on very tight deadlines and with limited budgets (especially now, in the post-zero interest rates era), they also accumulate one natural byproduct —the infamous technical debt.

The Real Impact of Technical Debt on Business

Technical debt is the sum of various trade-offs made while building and maintaining the product and all the things that should have been applied to the system but were not. While most seasoned software engineers have a good grasp of technical debt and know how to address it, they would likely invest more time to “pay it down” and take measures to prevent it in the future, but it’s getting more complex on the business level.

Though the term is widespread, often even among non-technical folks in SaaS businesses, it’s usually perceived as “the problems with the tech” or “the issue that developers have.” However, as companies reach Product-Market Fit and accelerate their growth, accrued technical debt becomes a business-wide issue. Addressing it effectively is critical for technical executives.

Business Risks of Growing Technical Debt

Technical debt impacts several key areas:

  • Reduced Productivity and Performance: This leads to a longer time to market
  • Increased Developer Turnover: High turnover rates can disrupt projects and increase recruitment costs.
  • Increased Number of Defects: More defects mean more maintenance, decreased trust, and lower customer satisfaction.
  • Increased Maintenance Overhead: More resources are needed to maintain systems, affecting budgets.
  • Decreased Stability: Unstable systems can lead to outages, impacting customer trust.
  • Increased Risk of Security Exploits: Vulnerable systems are more susceptible to attacks, posing a significant business risk.

While these points might initially sound like exclusively engineering issues, they have a way broader impact on the entire business. 

Key Skills for Engineering Executives to Manage Technical Debt

Addressing technical debt isn’t just about having a solid plan; it’s more about communication. The most crucial skill for engineering executives is effective communication with other business leaders to highlight the business impact of technical debt.

It might be a greatly overlooked factor, as the natural tendency (at least on the engineers’ side) is to focus on tactics and getting things done. Yet, the initiative’s overall success depends on how well the issue is communicated and discussed with other stakeholders and on reaching consensus and alignment regarding the business impact of the accrued technical debt.

If reducing tech debt is never recognized as an essential topic to tackle, it will likely progress little, and no plan or even no fantastic team of engineers will be able to make a significant difference.

How To Communicate The Impact of the Technical Debt with Stakeholders

Let’s focus on some actionable steps to help ensure enough resources are allocated to decrease accrued technical debt and minimize its future growth. When it comes to efficient communication, understanding the perspective of other executives will help us big time. The simplest way to approach it would be to think about “what’s in it for them?”. Using tech jargon and operating on technical KPIs will not help; they could annoy everyone who does not have a software engineering background. However, speaking of the impact on finances, delayed delivery, customer churn, or reputation damage will help reach the alignment faster.

To give a few examples, let’s see why different executives might care about technical debt and what would be essential for them to:

  • CEOs: Emphasize how increased time to market affects innovation and market response.
  • CMOs and CPOs: Highlight how reduced productivity delays product launches and marketing campaigns.
  • CFOs: Point out the financial implications of increased maintenance costs, reduced productivity, and developer turnover.
  • CCOs: Discuss how defects and reliability issues increase customer dissatisfaction.
  • CSOs: Explain how slow delivery affects customer acquisition and competitive positioning.

Speaking the language of whomever we are talking with and appreciating their perspective can take us quite far.

Wrapping up

Technical debt is not only an engineering problem — it’s a complex issue that impacts the business on many levels. While various tactics exist for reducing accrued technical debt and minimizing its future growth, none of them will matter without a critical skill on the engineering executive’s side: effective communication. By effectively communicating its impact and addressing tech debt strategically, tech executives can ensure their companies remain competitive and healthy.

In the upcoming articles, I’ll focus more on the perspective and collaboration with other business leaders. In the end, I’ll get to the actual tactics of conquering the tech debt on the engineering side, so stay tuned!

How do you communicate technical debt issues with other business leaders? Do you have any recent success stories with this problem? Please share them in the comments!

posted in: Technical Debt, Leadership, Business Impact