In the first of a 3-part series on the challenges currently facing CTOs and software companies, Charlie Sell, MD for Solutions & Consultancy, discusses how the increasing pressure to drive productivity and ROI without further investment raises the prospect of technical debt and all that comes with it.

As CTO face calls from founders, shareholders or investors to deliver the same quality of product, at greater speed with less investment and resource, something has to give.

If engineers are expected to work harder, work faster, be more productive or cut corners, it comes at a cost, including the risk of damage developer morale. How do CTOs strike the right balance to ensure the company doesn’t strike out?

What’s different now?

Pressure to release products or updates is nothing new. The core driver in recent years has been speed to market, and most companies have been given funding to invest in engineering capability. In fact most of the hiring that’s happened within our clients has been within the engineering teams.

However in the current climate, resource has been temporarily put on hold. Some are taking a cautious approach, saying “Stop hiring right now, we don’t know what’s going to happen in the market”. Others are saying “We were going to commit £5 million to next year’s R&D budget, but now it’s only going to be £1m”.

The challenge now is that founders and investors still want what they’ve always wanted; Speed, quality and profit, but from lower levels of investment. For many CTOs, that brings technical debt – the often intentional cutting of corners or acceptance that your product will launch unfinished – into their strategic decision making.

The dangers of technical debt

Many CTOs are now having to make their Board aware of the benefits and costs of technical debt, and pose questions like “Are we willing to accept that the product will be 80% complete?”

For some companies, technical debt is part of the long-term model or, with hardware related companies for example, the impact may take months or years to play out. But for many, particularly ecommerce, the consequences hit faster and harder than they expect.

For those companies, it may be possible to cut corners in other business functions – to be understaffed in human resources or even in sales teams – without , but where technology serves a fast-paced consumer market, cutting corners on tech is a delicate balancing act.

With online reviews an increasingly important factor in consumer choices, the impact of a product falling short of consumer expectations can become evident immediately.

Yet even when you are aware of the risks, releasing software that’s part-finished may still be the right strategic decision if it enables you to get to market before the competition. Many of our SaaS clients have people tied in to monthly or yearly subscriptions, so it may be preferable to keep them tied in. There’s no right or wrong answer when it comes to technical debt, only that it must be a strategic choice.

Something that must be a part of that strategy is communication – both upwards and downwards – about the rationale behind accepting a degree of technical debt. If the need and tolerance for technical debt isn’t explained to engineering teams, morale can quickly drop.

Engineers often work out of pride for their product and stay with a company because they believe in what they’re developing. When pressure to deliver begins to disrupt their work-life balance or there’s a change in the culture, engineers can get burnt out, stop believing in the value of the product or leave. Individually, each of those are damaging, but combined, they can be terminal for a company.


A recipe for success

Economic uncertainty has become another factor in the technical debt equation, but it won’t last forever and the challenge of technical debt will still be there, albeit with a different lens. That means that every business needs an understanding of that equation and an effective response.

One solution companies try is outsourcing, and while it can work in specific circumstances (I’ll be discussing the pros and cons in part 2 of this series) and it helps to reduce cost, it’s almost impossible to get the same quality. Offshore developer teams can be just as skilled as your in-house team, but time differences and cultural differences are difficult barriers to overcome.

The only approach to the challenge of technical debt that really works is good communication. For the company to take a balanced view of the benefits and risks, it’s crucial that everyone gets an appreciation of why you may be willing to accept technical debt, and quite how much you can take on.

In the best companies, the engineering teams are part of the conversation. The CTO will discuss the realities they face and agree the compromises they are willing to accept. Then, with their buy-in secured, it can be discussed at the business level. To have these conversations, CTOs must wear both hats, and have an understanding of the financial implications as well as the technical detail.

Technical debt is a hot topic and it’s certainly not going away. In this period of economic turbulence, the most effective leaders will be those who embrace the difficult conversations and articulate the challenges to both the business and engineering sides of the company.