7 Steps to Reduce Technical Debt and Optimize Development Costs, Speed, and Scalability

Technical debt is an invisible anchor weighing down many organizations. Sometimes it seems that a fast solution delivered within tight deadlines is the perfect choice, but it only works in the short term. Your team will always have to spend extra time in the future improving the code, fixing bugs, and even rebuilding whole parts of the system. 

While 86% of companies reported being impacted by technical debt, 91% of CTOs saw it as their greatest challenge in 2024. That doesn’t mean they deliver low-quality solutions. It’s often an inevitable factor in many projects that accumulates like a giant snowball. We’ve seen this far too many times in our 14+ years of experience. So let’s learn why and how to reduce technical debt.

Urgency of Addressing Technical Debt

Technical debt is an inevitable byproduct of custom software development. You’ll always get it in your projects if you prioritize speed over long-term code quality. It’s quite harmless in the short term. However, you’ll definitely discover its disruptive impact on your project’s ability to innovate and compete in the future.

Based on MobiDev’s experience, we can point out several challenges brought by technical debt:

• Increased maintenance costs: As technical debt accumulates, so do maintenance costs. You’ll spend more time and money on bug fixes, patches, and updates. This turns into a never-ending cycle where development hours are consumed by maintenance tasks, forcing budgets to be allocated to keeping legacy systems functional instead of investing in innovation.

• Limited scalability: Your tech infrastructure needs to expand along with your business to accommodate the increased load. But if your system is burdened with technical debt, you’ll find many performance bottlenecks, instability, and integration challenges – all limiting the project’s scalability. This also limits market coverage and potential.

• Reduced product quality: Each development shortcut adds bugs and issues to the codebase. This leads to frequent production issues, reduced system stability, and a decline in the overall user experience. It could be a significant problem across all industries, especially regulated ones.

What’s the overall result? The product loses time and money on issues that could be avoided. As a CTO, your task is to ensure maximum efficiency in budget usage, focusing on the project’s growth and innovative development. That’s why addressing technical debt is critical for a successful long-term result.

Deep Dive into the Costs of Technical Debt

According to Sonar’s research, technical debt costs for 1 million lines of code can reach $1.5 million or around 27,500 developer hours over 5 years. McKinsey’s survey of CIOs indicates that organizations often allocate 20% to 40% of their IT budgets to get out of technical debt. But there’s more.

A recent report by Stepsize shares many insights that we’ve also noticed at MobiDev.

1. Maintenance Costs

Technical debt measurement starts with maintenance costs. The bigger the debt, the more time and resources are spent on bug fixes, patches, and updates. Over time, these maintenance efforts become increasingly complex and expensive.

A McKinsey study highlights that maintenance costs can escalate to 40% of the technology estate’s total value. If we look at time and effort, engineers spend around 33% of their time on technical debt reduction, according to The Developer Coefficient (Stripe). Imagine all the possibilities for growth if your team can get back to developing and be free from the need to tackle maintenance tasks

2. Longer Development Time

Technical debt significantly slows down the software development process, especially when teams are working on an outdated or overly complex codebase. The more technical debt a system accumulates, the harder it becomes for developers to add new features or modify existing ones without breaking something.

Teams typically waste between 23% and 42% of their development time addressing issues related to technical debt. Stripe’s report states that developers spend around 13.5 hours weekly fixing these inefficiencies. This also leads to a longer time to market, which isn’t very good.

3. Lower Productivity

One of the less visible, but equally significant impacts of technical debt, is its effect on developer productivity. When developers are consistently dealing with fragile and inefficient code, their ability to work effectively diminishes. This leads to frustration, burnout, and a decline in overall output.

Research published on ScienceDirect indicates the following issues:

• Negative impact on developers’ self-worth and confidence
• Negative impact on sense of progress
• Unclear future with unpredictable issues

MobiDev’s experience shows that successful projects are only possible when the team is motivated, understands the project’s workflow and progress, and has a clear vision of their work. It’s one of our principles to keep the processes transparent and effective, ensuring everyone is satisfied with the work process. This helps us keep the project going and it allows us to achieve new results.

Advanced Strategies to Reduce Technical Debt

If you’re wondering how to solve technical debt, we’ve gathered the best strategies that will help you achieve this goal. Read on to learn about 7 steps to future-proof your software and eliminate tech debt.

Step 1: Identify and Measure Technical Debt

Companies often gain technical debt without acknowledging this issue. At some point, the debt stops being beneficial and starts causing lots of trouble. That’s why the first thing to do is accept the reality of the situation and understand how to identify technical debt. 

A general recommendation is to:

• Conduct frequent code reviews
• Use static code analysis tools like SonarQube, Coverity, or Veracode
• Gather developer feedback during standups and meetings

Technical debt measurement is another important issue. It can be measured with automated tools like SonarQube or CodeClimate. They analyze code quality, identify issues, and provide a “technical debt ratio” that estimates the time and effort required to fix these problems compared to the ideal code. You can also measure new bugs versus closed bugs. If your new bugs are outpacing your closed bugs, you should focus more on technical debt management.

Step 2: Prioritize the Most Critical Debt

Not all technical debt needs to be addressed at once. The key to managing debt effectively is prioritization. Focus on the areas that pose the greatest risk to your system’s stability, scalability, or ability to deliver new features. These can be divided into three sections:

• High-risk areas: These are the sections in your codebase that have frequent changes and updates. Such areas are often where technical debt causes the most issues, as each change increases the chance of introducing bugs or performance issues.

• Customer impact: Prioritize technical debt that affects end-users directly. For example, if your debt is causing performance bottlenecks or user experience issues, this should take priority over debt that has a low or negligible impact on the customer.

• ROI-based priorities: Evaluate the potential ROI for addressing each area of technical debt. Focus first on debt that, once resolved, will unlock significant time and resource savings for your development team.

Any action must have meaning. If you can’t see any benefits or explain the reasons behind your updates, then it may be a serious point to consider.

Step 3: Conduct Architectural Improvements

In many cases, technical debt accumulates due to outdated or inefficient system architectures. Companies can eliminate many bottlenecks and inefficiencies caused by technical debt by investing in architectural improvements. This can include popular approaches like:

• Transitioning to microservices: Monolithic systems, where all components are tightly coupled, tend to accumulate more technical debt over time. Migrating to a microservices architecture allows for independent development, testing, and deployment of smaller & isolated components. This makes it easier to refactor individual services without affecting the entire system.

• Event-driven architecture: This approach allows your software to handle more complex workflows asynchronously. It reduces the dependency between different parts of the system, making it easier to scale and update components without creating more technical debt.

• Cloud-native architecture: Try using containerization with Docker and orchestration with Kubernetes. This will help your team scale the product and manage the infrastructure much easier. At the same time, the software will remain modular and flexible.

A good architecture saves your product time, money, and resources. It also provides better security and prevents risks, so don’t skip out on this step.

Step 4: Apply a Modular Design

Modular design allows your developers to break down complex systems into smaller and more manageable pieces. This reduces technical debt by letting your team isolate and address issues within individual modules without affecting the global system. This is how a modular design should work:

• Encapsulation: Each module should have well-defined boundaries and responsibilities. This makes it easier to refactor or replace specific parts of the system without impacting the rest of the codebase. Encapsulation also reduces the risk of bugs spreading through the system.
• Separation of concerns: Modular systems benefit from separating different functionalities into distinct components. For example, separating business logic, data access, and user interfaces provides greater flexibility and easier updates in each area.
• Interface-based design: Using interfaces or APIs to connect different modules ensures that teams can change the internal structure of a module without affecting how it interacts with the rest of the system. This isolation of functionality reduces the accumulation of technical debt.

Modular designs are generally considered to be the best approach to future-proof your product. The approach is considered to be very beneficial and sustainable, allowing your team to reuse patterns and improve the product’s quality.

Step 5: Code Refactoring

Code refactoring is the process of improving the internal structure of a code without changing its external behavior. Regular refactoring eliminates bottlenecks, reduces code complexity, and improves long-term maintainability. This is how you can use it:

• Continuous refactoring: Rather than waiting for technical debt to build up, refactor code continuously as part of your development process. This ensures the codebase remains clean and avoids the accumulation of larger debt.
• Automated refactoring tools: JetBrains IntelliJ IDEA, Eclipse, and ReSharper offer built-in features to automate certain refactoring tasks. These include renaming variables, extracting methods, and removing duplicate code.
• Test-driven refactoring: Refactor code in combination with automated testing frameworks like JUnit or Selenium. Tests ensure the functionality of your system remains intact as you restructure the codebase.

MobiDev’s code refactoring services are a great way to improve your system’s performance and cost-efficiency without adding load to your in-house team. Our clear workflow allows us to quickly adapt to your system’s code and find ways to improve it in no time.

Step 6: Introduce Automation and Continuous Integration

Automation plays a key role in reducing technical debt by ensuring your code is consistently tested and deployed, catching issues early before they grow into larger problems. Let’s take a look at some of the tools you can use during each approach:

• Automated testing: Automated unit tests, integration tests, and performance tests help detect and prevent technical debt early in the development cycle. JUnit, PyTest, and Selenium are examples of testing frameworks that can be integrated into your workflow to maintain code quality.
• CI/CD pipelines: CI/CD pipelines allow teams to make changes frequently and run tests on every commit. Tools like Jenkins, CircleCI, and GitLab CI support continuous testing and integration, reducing the risk of technical debt accumulating between releases.
• Static code analysis: Static analysis tools like SonarQube, PMD, and Checkstyle automatically analyze code to catch potential issues. This includes security vulnerabilities, code complexity, and code smells, which contribute to technical debt.

Many companies have already adopted automated software testing. Many more are adopting automation across other areas, minimizing manual labor and focusing on more important tasks. It’s important to start early to avoid wasting your team’s resources.

Step 7: Set a Clean Code Culture

CTOs, team leads, and other experts must set a mindset of clear code practices across their development teams. If it’s possible to do something better without cutting corners, then it must be done. This is how long-term and future-proof systems are created.

You can typically set this type of culture with:

• Coding standards: These must include guidelines that promote maintainability, readability, and modularity. You’ll have to regularly review and enforce these standards to ensure consistency and top-tier quality within your projects.

• Developer training: Invest in ongoing training for developers to ensure they understand how to avoid and manage technical debt. Provide learning opportunities & workshops focused on clean coding practices, efficient architecture, and refactoring techniques.

This approach allowed MobiDev’s team to reach 89% of middle and senior developers on our team. Everyone is constantly improving their skills, focusing on creating high-quality software that will bring long-term benefits. 

Balancing Innovation with Debt Reduction

While managing technical debt, it’s necessary to keep on innovating and ensuring long-term sustainability. Many teams focus only on one thing and waste all their resources. Let’s see how to save your resources and keep on enhancing your project.

1. Allocate Time for Debt Reduction During Sprints

One effective way to balance innovation with debt reduction is by setting aside a portion of each sprint (10-20%) to eliminate technical debt. This ensures your engineers continuously address debt without halting the development of new features.

Incorporate technical debt tasks into sprint planning on top of new feature development. For example, if a sprint involves developing a new feature, allocate time to refactor or clean up the related code. This approach will help you gradually reduce technical debt while still progressing on product innovation.

2. Incorporate Debt-Driven Development

Instead of treating technical debt as a separate project, integrate it into regular development tasks. When your engineers are developing new features or fixing bugs, they should address the technical debt related to that specific area. This method reduces the risk of debt building up in critical parts of the codebase while keeping the engineers focused on innovation.

3. Create a Long-Term Debt Management Strategy

Develop a long-term strategy that includes scheduled “debt sprints” or dedicated refactoring periods. They can be implemented after major releases. This ensures that debt is systematically reduced without interrupting product development. Your team will be able to remove this issue without feeling the pressure of immediate feature releases, balancing long-term stability with ongoing innovation.

Success Stories for Getting Out of Technical Debt

Success Story #1: Modernizing a Fintech Web Portal for Enhanced Performance

Client Background

A leading credit association in Canada, serving manufacturers and wholesalers in the flooring industry, relied on a Ruby on Rails web portal hosted on Heroku. This portal was integral for the secure exchange of credit-related data among members.

The Challenge

By 2022, the client faced significant performance issues due to an outdated tech stack, including non-functional tests, obsolete libraries, and an outdated database structure. The original development team had moved away from Ruby on Rails, leaving the client with unresolved technical debt that hindered their system’s efficiency and security.

How We Helped

• Comprehensive code audit: MobiDev began by conducting a detailed software audit to assess the state of the codebase and pinpoint areas of technical debt. This audit provided critical insights into the issues, which were summarized in a Project Review Report.
• Platform upgrade: the team upgraded the system from Ruby 2.5.8 to the latest stable versions of Ruby and Rails, improving system performance and maintainability. Despite the complex task, the upgrade was completed in just three months.
• Thorough testing: MobiDev conducted regression testing to ensure the system remained stable after the upgrade, fixing various bugs along the way to further enhance the portal’s reliability.
• Project documentation: the creation of detailed functional and user acceptance testing (UAT) documentation ensured that the system’s functionality was well-defined, paving the way for future improvements.

Outcome

As a result of MobiDev’s modernization efforts, the client now operates a fully updated and stable web portal. The system is more secure and efficient, allowing members to continue their operations smoothly. MobiDev’s extensive documentation also ensures ongoing system maintenance is made easier for future needs.

Success Story #2: Revitalizing a Healthcare Application for Scalability and Efficiency

Client Background

A healthcare provider relied on a mission-critical application to manage sensitive patient data and support core healthcare processes. Over time, the app accumulated significant technical debt due to outdated versions of Ruby and Ruby on Rails, as well as a fragmented codebase and poor documentation.

The Challenge

The client faced difficulties in maintaining and scaling the application. The outdated tech stack caused performance bottlenecks and hampered the development of new features. Moreover, the lack of documentation made it hard for their team to manage the system effectively.

How We Helped

• In-depth code audit: MobiDev’s Ruby architects conducted an extensive review of the codebase to identify areas of technical debt and assess the overall health of the system.
• System modernization: we upgraded the application to the latest versions of Ruby and Rails, while transitioning from a monolithic structure to a modular architecture, vastly improving scalability and maintainability.
• Cloud migration: MobiDev migrated the application to Microsoft Azure, a robust cloud platform chosen for its security and scalability, which was vital for the healthcare provider’s growing needs.
• Extensive testing: regression and functional testing were conducted to ensure the updated application was stable and bug-free, with additional unrelated issues identified and resolved during the process.
• Detailed documentation: a comprehensive set of UAT cases and project documentation was created to ensure the client could easily manage and further develop the application in the future.

Outcome

MobiDev’s modernization and cloud migration efforts have made the healthcare provider’s application more scalable, secure, and efficient. The modular design makes room for easier updates and maintenance, enabling the client to focus on innovation without being distracted by technical debt. In-depth documentation ensures long-term sustainability and further scalability.

Future-Proofing Your Technology Strategy

Technology evolves, and so should your systems. You must always keep them adaptable, scalable, and maintainable for long-term success. As a CTO or team lead, your task is to ensure your developers follow this checklist to future-proof your systems:

1. Integrate technical debt management into your development process
2. Adopt a scalable architecture
3. Use continuous refactoring and automation
4. Prioritize a modular and flexible design to avoid new dependencies
5. Use cloud-based technologies and infrastructures
6. Establish strong coding standards and governance

Also, don’t forget about these important steps:

• Perform regular audits
• Establish debt prioritization
• Create a refactoring roadmap
• Invest in developer training and clean code culture
• Implement scalable technologies

While these steps may take some time to get used to, they are the perfect way to avoid wasting tons of resources and development hours on things that could be avoided. Always aim to be efficient!

Consider MobiDev for Tech Debt Management

Since 2009, MobiDev’s team has helped hundreds of clients build, scale, and modernize their software products. Our engineers have seen the rise of new technologies and the “great migration periods” associated with each of these technologies. You’ll get access to an expert team of professionals who know how to reduce your technical debt and future-proof your technology infrastructure.

Why choose MobiDev?

• Software audit: Our in-house experts will audit your software and existing infrastructure to create a clear roadmap for improvement. You’ll discover all your technical debt and how to get rid of it.

• Exclusive DevOps Expertise: You’ll get the industry’s best practices, like the implementation of CI/CD pipelines. This means your project will gain an efficient and reliable pipeline that doesn’t accumulate tech debt.
• Code Refactoring for Long-Term Efficiency: Our code refactoring services eliminate bottlenecks and clean up legacy systems, reducing the risk of accumulating further technical debt. We help you optimize your software for long-term sustainability and performance.

• Cloud Migration and Modernization: We work with Google Cloud, Microsoft Azure, and AWS to enhance your project’s scalability, performance, and flexibility. We tailor cloud solutions to your business needs, supporting sustainable growth. 

• App Modernization Expertise: We have extensive experience in helping businesses modernize their software systems. You’ll get extensive and relevant support from seasoned consultants and engineers who will turn your software product into a future-proof asset. 

Let’s start working today!