4 Levels of Tech Debt

There are 4 levels of tech debt based on severity. What are they, and how can you reduce and prevent tech debt from spiraling out of control?

Sep 30, 2024

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Technical Debt (Tech Debt) is called debt because it represents the technical tasks that need to be done now but are postponed for the future in favor of shortcut solutions.

I may start with something that simple such as improper database design. Then comes small issue. Fix it using workaround. Push the development and add more issue that fix through workaround. Until one day the small issues become greater issues and now it’s hard to solve it.

Technical Debt (Tech Debt) is called "debt" because it refers to the technical work that should be done now but is postponed in favor of quicker, short-term solutions.

It often starts with something simple, like a poorly designed database. Then a small issue comes up. You fix it with a workaround, push forward with development, and add more issues that also get fixed with workarounds. Eventually, those small problems grow into much larger ones, making them difficult—and expensive—to fix.

Tech Debt usually happens for a few reasons:

Improper system design – A common example is poor database design, often caused by rushed development or an inexperienced engineer.
Poor code quality – This leads to bugs that are patched with quick fixes instead of proper solutions.
Using outdated technology – Continuing to rely on old tools that don’t scale or perform well over time.

Tech Debt is dangerous and tricky. Why?

It’s like a ticking time bomb. It builds up slowly, and if left unchecked, it can "explode" into serious issues. What seems like small, manageable problems at first can snowball into something much bigger.

For non-technical people, it may not seem like a big deal, and the impact of not addressing these issues isn’t always clear—until it’s too late.

That’s why, in many companies without strong engineering leadership, management often prioritizes fast development and growth, overlooking the need for proper processes. Eventually, though, the debt catches up, and it has to be paid.

Stages of Tech Debt

Level 1: Minimal Impact

At Level 1, there are some reported issues, but they’re still minimal.

Fixes are easy and don’t slow down development.
All stakeholders, including engineers, product teams, and ops, are content.
Business continues as usual with no major disruptions.

Level 2: Emerging Problems

At Level 2, the number of reported issues begins to grow.

Workarounds or "band-aid" fixes become common to prevent breaking existing features.
Productivity is slightly impacted, but things remain under control.
The product and engineering teams start spending more time on ad hoc issues, though it's still manageable.

Level 3: Increasing Complexity

At Level 3, issues arise almost daily.

Fixes become more difficult, and past technical decisions become major roadblocks.
Productivity noticeably declines.
Product and engineering teams work overtime to keep things running, patching issues as they arise.

Level 4: Critical Breakdown

At Level 4, issues are constant.

Frequent outages, performance issues, and cascading failures are common.
Every bug fix or update introduces new problems.
New features are either impossible or incredibly expensive to implement.
Stakeholders are experiencing burnout.
Teams outside engineering, such as ops and business, begin losing trust in the tech teams.

What to Do if You’re Already at Level 4?

At Level 4, it’s not just the company that’s suffering financially due to the instability of the application—it also affects team morale and culture. To avoid reaching this point, prevention is key. Scheduling regular "tech debt payments" can help keep issues from spiraling out of control.

But what if your company is already at Level 4? Before jumping into solutions, ensure that management understands the severity of the situation.

At this stage, your system likely has deep architectural problems. It’s similar to having a house with a crumbling foundation—you can’t add new rooms or floors until you fix the base structure.

Here’s how you can approach it:

Hire an Expert
You need a skilled software architect. If you don’t have one, hire a full-time expert or a fractional architect who can help restructure the system.
Commit to Long-Term Fixes
Reducing tech debt from Level 4 to Level 1 takes time, energy, and resources. This requires strong commitment from management and collaboration across all teams.

There are two main approaches:

Hard Reset:
Halt all development. The system might remain unstable, but focus all resources on laying a new foundation.
Create a SWAT Team:
Minor changes are allowed, but major changes are prohibited. The current team continues firefighting, while a new SWAT team, led by the best architect and highest leader, lays the groundwork for a new system and handles the migration.

That’s all for today. How’s your company’s tech debt situation? Comment below! Thank you for reading today's newsletter! If you find it valuable, don’t forget to: