Why is Technical Debt Causes After IT Restructuring Efforts?

For business leaders, IT restructuring aims to boost operational efficiency and accelerate growth. However, many companies complete a transformation only to discover that technical debt continues to slow systems and increase costs. Understanding the technical debt causes that persist after restructuring is essential for long-term scalability and business agility.

What is Technical Debt Causes?

• Technical debt is the cost of taking shortcuts or quick fixes in software development.
• It accumulates like financial debt, requiring time and resources for maintenance and rework.
• Legacy systems, outdated components, poor documentation, and rushed coding all contribute to technical debt.

Even after restructuring, technical debt remains if teams do not address underlying tech stack issues, architecture, or organisational culture.

Why Technical Debt Persists After IT Restructuring

Focus on Structure Instead of Tech Stack

• Restructuring often prioritises team organisation, reporting lines, and workflows.
• Architectural debt remains if monolithic or tightly coupled systems are unchanged.
• Outdated software, frameworks, and languages continue to slow development.
• Teams organised around poor architecture often create new technical debt without realising it.

Pressure for Immediate ROI

• Business leaders expect quick results from IT restructuring.
• Teams deliver features quickly by skipping documentation, testing, or code refactoring.
• Budget allocations often fall short of covering technical debt, allowing it to grow.

Cultural and Knowledge Gaps

• Loss of senior staff during restructuring removes undocumented knowledge about legacy systems.
• New teams may lack consistent coding and quality standards.
• Inconsistent practices generate new technical debt with every release.

Data Insights on Technical Debt

• Technical debt can consume 20–40% of IT budgets, limiting innovation (McKinsey, 2023).
• Organisations with lower debt see roughly 20% higher revenue growth (McKinsey, 2023).
• Companies with high debt are 40% more likely to have incomplete IT modernisation projects (McKinsey, 2023).
• 70% of CIOs identify legacy systems as a major barrier to scalability (Deloitte, 2024).

These figures show that technical debt is both a technical and strategic business challenge.

Real-World Example: A UK Retailer

• A major retailer shifted from a waterfall model to DevOps and product-centric teams.
• Feature releases remained slow due to a legacy monolithic e-commerce platform.
• Developers spent 50% of their time fixing old code instead of creating new features.
• Structural changes alone could not resolve technical debt causes embedded in the tech stack.

The retailer committed to a multi-year strategy to modernise core components for scalability and efficiency.

Future Outlook: AI and Emerging Technical Debt

• Rapid adoption of AI can introduce new forms of debt.
• Inefficiently trained AI models create data and operational debt.
• Hasty AI integrations with existing systems generate architectural debt.
• Technical debt must be managed continuously, not as a one-time post-restructuring task.

How Business Leaders Can Address Technical Debt

• Quantify and fund technical debt: Check how much debt exists. Set aside 20–30% of the budget to fix the most important issues.
• Prioritise key systems: Focus on systems that affect revenue or growth. Remove old systems that no longer add value.
• Maintain quality in operations: Require code reviews and automated testing. Reward developers for writing clean, reliable code.
• Build a strong tech stack: Replace monolithic systems with modular microservices. Use modern, standardised tools and frameworks.

Frequently Asked Questions (FAQ)

• What is technical debt in simple terms?

Technical debt is the cost your organisation pays for taking shortcuts in software development, slowing future changes and maintenance (McKinsey, 2023).

• How much does technical debt cost a company?

It can represent 20–40% of the technology estate and divert IT budgets from new initiatives (McKinsey, 2023).

• What is the difference between good and bad technical debt?

Good debt is strategic and temporary with a repayment plan. Bad debt is accidental, unchecked, and grows without control.

• How does IT restructuring contribute to technical debt?

Rushed timelines, insufficient budgets, and unchanged systems force teams to take shortcuts, creating new debt (PwC, 2023).

• Why is a strong tech stack essential?

A modern, modular stack enables scalability, faster delivery, and easier maintenance, reducing the chance of new debt.

• What role does scalability play?

Systems with high technical debt cannot handle increased load without costly rework, limiting growth and operational efficiency (Statista, 2023).

• How can organisations tackle persistent technical debt?

Make debt visible, measure it, allocate dedicated time and budget, and link reductions to business outcomes (BCG, 2023).

Conclusion

Persistent technical debt causes after IT restructuring indicate a strategic failure. Structural changes alone cannot resolve outdated systems, poor architecture, or cultural gaps.

Organisations that measure, fund, and prevent technical debt create a foundation for scalable growth, operational efficiency, and sustained innovation.

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