Do You Allocate Specific Resources or Time for Reducing Technical Debt in Your Development Cycles?

In the whirlwind of scaling a startup or small to medium enterprise (SME), it's easy to get caught up in the relentless pursuit of new features, faster product releases, and market growth. However, as a seasoned leader in tech-driven organisations, I’ve seen countless cases where this frenetic pace leads to a perilous oversight: technical debt. If you’re not deliberately allocating resources to manage and reduce this debt, you could be setting your business up for long-term inefficiencies, increased costs, and even stunted growth.

What is Technical Debt?

To put it simply, technical debt is the cost of deferred maintenance on your codebase. It occurs when shortcuts are taken during development—either due to time constraints, resource limitations, or lack of foresight. These shortcuts might help you meet immediate business goals but often at the expense of long-term software quality. While technical debt can be a necessary evil in the short term, it’s essential to manage and pay it down regularly. Otherwise, the debt accumulates interest in the form of slower development cycles, buggy software, and bloated codebases that are difficult to manage and scale.

When scaling a business, especially without dedicated senior technology leadership like a full-time CTO, it’s easy to focus only on the immediate gains. The issue is that technical debt can creep up on you, and by the time it’s painfully obvious, you may already be facing serious challenges—sluggish performance, security vulnerabilities, or a demoralised development team grappling with code that’s becoming increasingly unmanageable.

Why Reducing Technical Debt is Crucial for Scaling Startups and SMEs

For any tech-driven startup or SME, maintaining momentum while scaling is paramount. However, technical debt acts like an anchor, gradually weighing down your progress. Let me explain why it should be a top priority, especially in your development cycles.

1. Impact on Agility and Speed

Agility is often cited as one of the most significant advantages of a startup or SME compared to larger enterprises. However, technical debt erodes this advantage over time. As your codebase becomes increasingly cluttered with workarounds and quick fixes, new development takes longer and is more prone to errors. Engineers spend more time deciphering old code, which drains resources that could be better spent on innovation.

In contrast, reducing technical debt frees up your development team to move faster and more confidently. It’s like driving a car on a well-maintained road versus a pothole-riddled one. The latter may be doable at first, but as those potholes grow, your ability to reach top speed becomes seriously impaired.

2. Attracting and Retaining Talent

Developers are drawn to innovative companies, but they also want to work with clean, maintainable code. A high level of technical debt can lead to frustration and burnout within your development team. When developers spend most of their time fixing bugs or working around poorly written code, their job satisfaction plummets. This leads to higher turnover rates, which further exacerbates the problem. A constantly rotating development team introduces inconsistencies in code quality, which in turn increases technical debt.

On the flip side, a commitment to reducing technical debt signals to your developers that you value their work and are invested in creating a sustainable, efficient work environment. In the long run, this can help you attract top talent and retain your existing team, giving your business a significant competitive edge.

3. Alignment with Business Goals

One of the core challenges faced by scaling companies is ensuring that technology development remains aligned with business objectives​. Technical debt creates a misalignment, as the time spent fixing issues or navigating suboptimal code can detract from high-priority business goals, such as improving user experience or entering new markets. A proactive approach to managing technical debt ensures that your technology efforts are always moving your business forward, rather than bogging down your team in rework that could have been avoided.

Additionally, when you consider the long-term picture, managing technical debt often has a direct impact on investor confidence. If your team is constantly firefighting, it’s hard to present a compelling case to investors that your technology is scalable and reliable. Allocating resources to reduce debt shows that you’re thinking strategically, not just about the next funding round, but about sustainable growth.

How to Effectively Allocate Resources for Technical Debt Reduction

The next question, of course, is how to allocate resources for technical debt reduction without slowing down the progress of your business goals. Here’s a strategic approach I recommend:

1. Integrate Debt Reduction into Sprint Cycles

One of the most effective ways to tackle technical debt is to integrate its reduction directly into your sprint cycles. Rather than viewing it as a separate task or initiative, build it into your development workflow. For example, you can allocate a percentage of each sprint—say, 10-20%—to addressing technical debt. This approach allows you to make continuous progress on reducing debt without needing to halt feature development altogether.

This strategy also fosters a culture where reducing technical debt becomes a routine part of development, rather than something that’s only addressed when it becomes a critical issue. It also signals to your team that you’re committed to maintaining a clean and efficient codebase, which can improve morale and productivity.

2. Measure and Prioritise Technical Debt

Like any other business issue, technical debt needs to be measured and prioritised. Start by identifying areas of your codebase that are causing the most problems. This could be measured in terms of the frequency of bugs, time spent on maintenance, or difficulties in adding new features. Once identified, rank these areas by impact and effort. This gives you a roadmap for paying down your debt in a strategic and measurable way.

Just as you would for any major initiative, establish clear KPIs for debt reduction. For instance, track how much time is being spent on bug fixes before and after addressing specific debt. If you can demonstrate tangible improvements, it’s easier to justify continued investment in these efforts.

3. Set Aside Dedicated Time

In some cases, you might need to set aside a full development cycle to address significant technical debt. This is particularly true when the debt has reached a level where it’s impacting your ability to release new features or maintain your existing platform. It might seem counterproductive in the short term to halt new development in favour of debt reduction, but this can be a necessary step to ensure that future development isn’t continually hampered by the burden of accumulated debt.

4. Involve Your Team in Decision-Making

Your developers are the ones who experience technical debt firsthand, so involve them in the decision-making process. Ask them to flag areas where debt is causing the most issues and work with them to identify solutions. Not only does this give you better insight into where your debt lies, but it also empowers your team to take ownership of the codebase. Moreover, engaging the team creates a shared understanding of the long-term benefits of reducing debt, which can be motivating.

The Role of Senior Technology Leadership

One of the biggest barriers to managing technical debt effectively in scaling startups and SMEs is the lack of senior technology leadership. Without a CTO or similar role, there is often no one with the authority and strategic oversight to ensure that technical debt is being addressed. This can lead to technology becoming decoupled from business objectives​, with short-term decisions dominating the development process.

A fractional CTO can be an invaluable asset in this scenario, bringing an external perspective and seasoned experience to help you manage technical debt strategically. They can work with your development team to prioritise debt reduction in line with your business goals and ensure that technology investments are being made with an eye towards the future, not just the next release​.

Paying Down Technical Debt Is an Investment in Your Future

In the fast-paced world of scaling startups and SMEs, it’s easy to overlook technical debt in favour of immediate gains. But if left unchecked, technical debt can erode your agility, demoralise your team, and ultimately hinder your ability to scale. By allocating specific resources and time for debt reduction, you’re making an investment in your future—one that will pay dividends in the form of faster development cycles, a more satisfied team, and a technology stack that’s built to support long-term growth.

Whether through regular sprints, dedicated cycles, or the guidance of senior technology leadership, addressing technical debt should be a critical part of your strategy. Remember, the best way to deal with debt is not to avoid it but to manage it deliberately and proactively.