Technical Debt Carries Interest: Why Every Business Leader Should Care

In today’s fast-paced software industry, speed is often a top priority. New features and products need to ship yesterday, and development teams are under constant pressure to deliver. Technical debt is the hidden cost of that hurry. It’s what accumulates when engineers take shortcuts to meet immediate goals—skipping thorough testing, delaying the implementation of best practices like continuous integration and delivery (CI/CD), or writing “good enough” code instead of a cleaner solution. These decisions save time in the short run but create extra work and complexity that must be paid back later.

At DigiDaaS, we’ve seen technical debt creep into almost every project at some stage. Crucially, technical debt isn’t just a nuisance for developers—it’s a business concern. Just as financial debt can constrain a company's future choices, technical debt can slow a company’s ability to innovate. Left unmanaged, it may lead to slower release cycles, higher maintenance costs, and missed market opportunities. On the flip side, taking on technical debt deliberately can sometimes be a savvy strategic move to achieve a business win quickly. The difference lies in whether that debt is tactical or accidental, and how it’s managed.

Software projects can become like precarious building projects. Each time you add a quick, temporary fix, it’s like adding another floor on an unstable foundation—eventually the cracks start to show. This conceptual illustration depicts how multiple layers of code and patches might stack up, highlighting the importance of reinforcing your foundation as you build. When too much unchecked technical debt piles up, the result is a fragile system that demands significant effort to set right.

Tactical Technical Debt: Strategic Shortcuts for Immediate Gains

Tactical technical debt is like taking a calculated shortcut. Imagine you’re late for a crucial meeting across town. Instead of the safe, smooth highway, you cut through a bumpy side road to save 15 minutes. You know the rough road might jostle your car and even cause some damage, but you’re willing to deal with those repairs later because making the meeting on time is that important. In software development, this is the mindset behind tactical technical debt.

When a team incurs tactical debt, they do so deliberately, with eyes wide open about the consequences. It usually happens to meet a pressing business need—like hitting a deadline for a product launch or delivering a must-have feature before a competitor. The key is that everyone understands it's a trade-off. Just as a company might take out a loan to capitalize on a growth opportunity, an engineering team and its stakeholders agree to “borrow” against the code by implementing a quick, imperfect solution now, with a plan to refine it later. For example, a startup might rush out a prototype with some messy code to seize early customers, fully intending to rebuild that component properly once the concept is proven. Used wisely, tactical debt can be empowering – it buys speed and agility when you need it most. But it comes with an important caveat: you must schedule time to pay it back before the interest accumulates and undermines your long-term goals.

Accidental Technical Debt: The Hidden Costs of Uninformed Decisions

Accidental technical debt, on the other hand, creeps in without you realizing. Think of building a backyard treehouse with your kids without really knowing the best construction methods. You hammer some nails together and get it standing, and initially everything looks okay. But over time, the treehouse starts to tilt and boards loosen—problems caused by subtle mistakes you didn’t realize you were making. In hindsight, you weren’t intentionally cutting corners; you just didn’t have the right knowledge or tools at the time. That’s accidental technical debt.

In software, accidental debt typically results from knowledge gaps, poor planning, or simply moving too fast without proper checks. No one sets out to write fragile, hard-to-maintain code, but it happens when best practices are overlooked or when the team is inexperienced with a technology. The worst part is that you often don’t notice accidental debt until it starts causing trouble. A common scenario is a company that hastily builds an application to meet an aggressive launch date. It works fine at first, but as more users come on board, the system begins to buckle under the load—perhaps the architecture wasn’t designed to scale, or the codebase has become a tangled web that makes every change risky. Suddenly the team is in crisis mode, scrambling to stabilize an over-stressed system instead of developing new features. In this way, accidental debt can catch you off guard and demand a hefty price to fix when you least expect it.

The "Interest" on Technical Debt

Just like a financial loan, technical debt accrues interest over time. In software, this "interest" shows up as a drag on future development. Developers have to navigate around kludges and workaround code, which makes even straightforward changes take longer. As debt builds up, progress slows. New features that once took days might now take weeks, and bugs become harder to track down and fix. Team morale can suffer as well, because developers feel like they’re wading through mud when working on a debt-ridden codebase. From a business perspective, the interest on technical debt reveals itself in slower time-to-market, higher development costs due to inefficiency, and potentially a poorer user experience as quality issues slip through.

The cost of this interest is not just theoretical—studies have tried to measure it. According to Stripe’s Developer Coefficient report, software engineers spend roughly 33% of their time dealing with issues related to technical debt​. That’s a third of your engineering capacity tied up with rework and maintenance instead of building the next innovation. For a team of 50 developers, that time sink has been calculated to cost on the order of $1.65 million per year in salary expenses​. And on a global scale, accumulated technical debt is estimated to carry a staggering price tag of around $3 trillion in lost economic value over the coming decade​. These figures drive home a simple truth: ignoring technical debt can become extremely expensive, both for individual organizations and the economy at large.

Knowing this, how can you keep technical debt from crippling your plans? The answer is to be proactive and manage it like the strategic factor it is. Here are some best practices that both engineering teams and product leaders can apply to identify, manage, and mitigate technical debt:

• Acknowledge and Document Tactical Debt: If you deliberately incur technical debt, be transparent about it. Document what was done and why – for example, “temporarily using a quick fix for the checkout process to meet the holiday rush, will rewrite properly in Q1.” Also set a clear timeframe or criteria for when that debt will be paid down. Treat it like taking out a short-term loan: you should know how and when you’ll repay it.

• Minimize Accidental Debt with Proper Planning: Many unintended problems can be avoided by investing in good upfront practices. Ensure your team follows sound design principles and doesn’t skip critical quality assurance (QA) steps. Use robust development workflows (for instance, automated testing and continuous integration/continuous delivery pipelines) so that errors are caught early, before they seep into your product. A bit more time spent on architecture and testing can save a lot of pain later on.

• Conduct Regular Code Reviews and Refactoring: Make code quality a continuous priority. Have engineers routinely review each other’s code, not only to catch bugs but to spot poorly structured or outdated code that needs improvement. Schedule periodic refactoring sessions where the team cleans up problematic areas of the codebase, simplifies overly complex logic, or updates old libraries. Regular maintenance like this prevents small issues from snowballing into large debt.

• Invest in Team Education and Best Practices: The best way to avoid accidental debt is to cultivate a knowledgeable team. Provide training and mentorship so developers stay up to date on modern frameworks, architectural patterns, and development processes. Encourage a culture where engineers feel comfortable pointing out potential issues and addressing them. A well-trained, quality-conscious team is less likely to introduce serious debt in the first place, and more capable of handling it when they do.

• Prioritize Debt Pay-Down in the Roadmap: Don’t let technical debt exist in darkness. Make it visible by tracking known debt items in your project backlog, and prioritize time to tackle them. Product managers and tech leads should regularly discuss technical debt alongside new features. You might allocate a portion of each development sprint to refactoring and improvement, or schedule dedicated “debt pay-down” sprints when needed. By treating debt reduction as part of the normal workflow, you ensure it doesn’t keep growing unchecked.

Technical debt is nearly unavoidable in a fast-moving software project, but it doesn’t have to be unmanageable. The difference between a product that stagnates under the weight of compounding debt and one that continues to evolve comes down to foresight and discipline. Business and technology leaders must work together to keep debt at a manageable level—making conscious decisions about when to accept a bit of debt for the greater good and making time to pay it off before it cripples progress.

At DigiDaaS, our philosophy is that managing technical debt is an integral part of delivering scalable, sustainable software. We partner with organizations to identify areas of risky debt early on, to make informed choices about trade-offs, and to implement the kinds of best practices outlined above. By treating technical debt as a shared responsibility across both engineering and management, companies can leverage it strategically when they must—without letting it spiral out of control. In the end, whether technical debt is tactical or accidental, addressing it proactively is key to faster innovation, more resilient systems, and happier customers.