What is technical debt?

Technical debt: definition

The term “technical debt” goes back to software developer Ward Cunningham, who coined it in the early 1990s. The metaphor: choosing a quick, messy solution is like taking out a loan. In the short term, it saves time; in the long term, the debt has to be repaid—by reworking the code.

Technical debt isn't automatically bad. Taken on deliberately, for example to launch an MVP on time, it can make sense. It becomes a problem when nobody documents it and plans for paying it down.

How technical debt arises

Technical debt often builds up gradually, without anyone making a conscious decision. Typical causes include:

You can recognize it when simple changes take a disproportionately long time, errors occur in unexpected places, or no one dares to touch certain areas anymore.

• Time pressure and shortcuts without later rework
• Missing automated tests and documentation
• Outdated frameworks, libraries, and language versions
• Structures that grew over time and were never adapted to new requirements
• Changing developers without shared standards

Consequences and how to deal with technical debt

Left unaddressed, technical debt slows down further development, increases the security risk from outdated components, and makes software dependent on the few individuals who still understand the code. Onboarding new developers also takes significantly longer. In extreme cases, the only option left is an expensive rebuild.

Paying it down works best step by step: make the debt visible, prioritize it by risk and benefit, and reserve a fixed share of each development phase for refactoring, tests, and updates. Automated checks in a CI/CD pipeline help detect new debt early.

• Assessment through code reviews and analysis tools
• Prioritization by business risk
• Regular refactoring instead of a big restart
• Tests and updates as a fixed part of maintenance

Real-world example: stabilizing software that has grown over time

A mid-sized company uses a custom-built application that various service providers have extended over the years. Every small change creates new errors. A technical audit reveals outdated libraries and missing tests. Instead of rebuilding everything, critical areas are first secured with tests, dependencies are updated, and the code is then reworked step by step. This makes changes predictable again, and new features can be added with reasonable effort.

Nano Concepts also takes over existing software, assesses its condition openly, and develops a realistic plan for reducing technical debt—without jeopardizing ongoing operations.