How to measure technical debt: a step-by-step introduction

Generative AI is accelerating software development cycles significantly.

Understanding how to measure and manage technical debt is crucial for maintaining development velocity while ensuring system reliability—let's explore the practical approaches that engineering teams can implement.

What is technical debt?

Technical debt isn’t just a backlog of minor tasks—it represents the off-balance-sheet accumulation of future technology work that arises when teams take shortcuts or defer best practices. Over time, this debt can hinder growth, inflate costs, and contribute to slower development cycles.

Engineers and operations teams face increasing pressure to deliver features quickly while maintaining system performance and reliability.

While expedited delivery cycles can satisfy immediate business requirements, they often introduce architectural compromises that compound maintenance overhead and reduce system extensibility.

Almost every business has a certain level of technical debt. But the problem is becoming much worse, with companies increasingly adopting cutting-edge technologies and abandoning legacy processes.

In a McKinsey study, for example, CIOs report that technical debt amounts to 20 percent to 40 percent of their entire technology estate before depreciation. What’s more, 60 percent of CIOs claim their company’s technical debt is higher than it was three years ago.

The heavy cost of technical debt

In many ways, technical debt is like financial debt. It’s similar to taking out a loan or pushing a credit card payment to the next billing cycle.

Technical debt becomes particularly challenging because it accumulates gradually, often without clear visibility into its growing impact on development velocity.

Technical debt creates cascading effects beyond increased maintenance costs—it reduces deployment frequency, increases change failure rates, and extends mean time to recovery when issues occur.

In many ways, technical debt is like financial debt. It’s similar to taking out a loan or pushing a credit card payment to the next billing cycle.

Security vulnerabilities

One of the most common types of technical debt takes place during software development. In traditional software development, engineers typically avoid security testing until the very end of the process.

Security engineers perform testing before a software release—and oftentimes, security issues become too costly or complex to address.

When this happens, vulnerabilities often wind up sneaking into production . This results in an endless process of software patching and higher end-to-end development costs.

Weak access management and governance

Despite the clear and present need for strong access controls in the cloud, companies often have minimal safeguards in place to reduce friction for workers.

Unfortunately, weak access management and data governance can lead to privilege escalation and grant authorized and unauthorized identities access to sensitive systems and databases. Revoking access and remediating security issues can take a considerable amount of time and lead to irrevocable brand damage and reputational harm.

Higher complexity

It’s common for technical teams to take on multiple technologies, languages, and strategies. But over time, this can lead to significant complexity.

High complexity is especially dangerous when a technical team inherits another company’s systems and tools during a merger or acquisition. This can cause technical debt to double and spiral out of control.

Project backlogs

IT departments are currently dealing with widespread staffing shortages. As a result, teams often wind up triaging problems and working quickly to keep systems and applications functioning. Doing so can create project backlogs and delay releases and updates.

Project backlogs can lead to unhappy internal stakeholders and customers. Additionally, they can also lead to gaping security and operational vulnerabilities.

It’s imperative to try and maintain consistency when bringing software to market or when maintaining internal IT systems or cloud environments.

Sloppy development

When you consistently allow technical debt to accumulate, it can send the message that speed and efficiency are more important than quality. And this is a very slippery slope.

It’s imperative to try and maintain consistency when bringing software to market or when maintaining internal IT systems or cloud environments.

Without enforcing best practices and detailed policies, taking a fast way out can become a standard operating procedure. Once that happens, it can be very hard to change from a cultural perspective.

How to measure technical debt in your company, step by step

As you can see, technical debt is something that you should try to keep to a minimum at the very least. But to do this, you need to have a system in place for measuring it. Here’s how to start calculating technical debt.

1. Measure the technical debt ratio (TDR)

TDR quantifies the ratio of remediation effort to development effort, providing a concrete metric...

By tracking TDR, you can have a clearer understanding of how much time and effort your team puts into quality improvement.

Industry benchmarks suggest maintaining a TDR below 5 percent, though many organizations operate with TDRs of 10 percent or higher due to accumulated technical debt.

2. Form a debt reduction plan

Once you have a clear understanding of how much technical debt you have and where it exists, the next step is to prioritize your debt and form a plan to reduce it.

This requires collaboration across security, engineering, and operations leadership to align on priorities and resource allocation.

3. Change your culture

Companies often run into issues because they attempt to fix technical debt without addressing the underlying cultural issues that contribute to it.

It’s critical to build a culture of excellence and encourage team members to avoid debt—even if it means pushing back deadlines or spending more time on a project. In the long run, it’s usually better to focus on quality than speed.

4. Track technical debt metrics over time

Over time, technical debt can lead to significantly higher costs, lower quality software, and more performance issues. As such, it’s something that you absolutely need to stay on top of.

Consider using automation to track technical debt over time. This way, you can benchmark debt reduction and also have an easier time understanding how your efforts are paying off.

Some example technical debt metrics to measure over time:

Ultimately, measuring technical debt is an ongoing process. To translate discovery into action, consider establishing a clear metric or score to quantify the impact—this allows teams to prioritize, track reductions over time, and maintain a healthier codebase.

• Technical Debt Ratio (TDR)
• Lead time
• Change failure rate
• Defect ratio

5. Prioritize technical debt

Technical debt isn’t usually a glaring problem until it starts negatively impacting operations. For this reason, you need to make technical debt a priority.

One easy solution is to factor debt reduction into your sprint backlogs. Give your developers extra time to perform additional testing and remediate issues.

By prioritizing technical debt, you can prevent problems from occurring later in the development cycle. This can save time and reduce headaches for your team members.

Reduce technical debt with OpsLevel

Technical debt significantly impacts engineering velocity and system reliability across technology organizations, making proactive debt management essential for sustainable development practices.

OpsLevel helps teams tackle technical debt by automating software intiatives like upgrades, fixes, and migrations. To learn more about the easiest way to stop technical debt from slowing you down, schedule a demo of OpsLevel today .

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Frequently Asked Questions

1. What is technical debt and why does it matter?
Technical debt represents shortcuts or deferred best practices in your codebase that accumulate “interest” over time. Managing it is essential to maintain engineering velocity, system reliability, and reduce long-term maintenance costs.

2. How do you calculate the Technical Debt Ratio (TDR)?
The TDR is calculated as the estimated remediation effort divided by the total development effort. A healthy benchmark is keeping TDR below 5%, though many organizations operate at 10% or higher.

3. Which metrics should I track to measure technical debt?
Key metrics include Technical Debt Ratio, lead time, change failure rate, and defect ratio. Tracking these over time provides visibility into how debt impacts deployment frequency and quality.

4. What are common sources of technical debt?
Typical sources include security vulnerabilities from late testing, weak access management, legacy system complexity, and rushed projects that bypass best practices.

5. How can I prioritize technical debt reduction?
Integrate debt remediation tasks into sprint backlogs, rank debt items by business impact and risk, and allocate dedicated time each sprint for targeted refactoring and testing.

6. What role does engineering culture play in managing technical debt?
A culture that values quality over speed—empowering teams to push back on unrealistic deadlines—prevents debt from compounding and embeds best practices into everyday workflows.

7. How can automation help track and reduce technical debt?
Automated tools can continuously scan for code smells, security gaps, and architectural issues, generating dashboards that highlight debt hot spots and measure reduction over time.

8. What industry benchmarks exist for technical debt?
McKinsey finds that technical debt often represents 20–40% of a technology estate; leading teams aim for TDRs under 5% to sustain high-velocity delivery with minimal rework.

9. How does OpsLevel help manage technical debt?
OpsLevel provides full visibility into your microservices, libraries, and infrastructure, surfacing debt metrics and enforcing best-practice policies to prevent shortcuts from slipping into production.

10. When should I schedule regular technical debt reviews?
Many teams conduct monthly or quarterly debt reviews—aligning cross-functional stakeholders to reassess priorities, adjust remediation plans, and celebrate progress.