The Silent Killer of Velocity: Why 12-15% Technical Debt Allocation is a Myth

Last week, I found myself in a conversation that's probably all too familiar to many engineering leaders. A brilliant, well-meaning colleague—not from the tech side of the house—suggested we aim to cap our engineering time dedicated to technical debt at a very ambitious 10-12%, maybe 15% tops while in transition. Their rationale? "Think of the velocity! Imagine how many more features we could ship."

On the surface, it sounds so logical, right? More features, more customer value, faster growth. But after years immersed in the relentless grind of building software for payments, including the last three years where we built our ARISE payment gateway from the ground up, achieving EMV L3 certification, enabling multi-channel acceptance, and launching industry-leading features like network tokenization into production (with tap-on-glass MPOC coming soon), where reliability isn't just a buzzword but the very oxygen we breathe, I've learned that this thinking is a trap. It's a fast track to a technical debt spiral that chokes delivery, crushes team spirit, and explodes long-term costs.

This isn't just theoretical for us. We're actively pushing a fundamental shift in how we deliver software: moving from pre-defined release dates to shipping directly to production multiple times per day. We understand that this aggressive approach, while unlocking incredible speed and responsiveness, inherently means we'll encounter more bugs. However, the promise is also a faster ability to fix them, leveraging our DevOps practices. The bitter irony? Trying to ram through this kind of rapid, continuous delivery while simultaneously strangling debt allocation to 10-15% is a perfectly engineered storm for technical bankruptcy. We are expected to measure and improve upon our DORA metrics and report them to our board and investors, and this constraint flies directly in the face of those goals.

The Alluring Math That Doesn't Add Up (Especially in DevOps)

That 10% allocation sings a siren song of efficiency, promising maximum feature development. And yes, when you're trying to ship fast, every hour feels critical. But this approach fundamentally misunderstands the insidious compounding nature of technical debt, particularly in the high-octane world of DevOps where its consequences hit with brutal speed.

Consider this: Stripe's "Developer Coefficient" report revealed developers already spend 42% of their time wrestling with technical debt and maintenance, plus another 9.25% on "bad code." That's over half their working hours not building new features. McKinsey's research hammers this home: technical debt devours 20-40% of an organization's entire tech estate. Even worse, 30% of CIOs confess that over 20% of their new product budget is being bled dry just to resolve existing tech debt. When we artificially constrain debt servicing to 10-15% while simultaneously demanding faster deployments, we're not eliminating the work. We're just deferring it, at exorbitant compound interest rates, while also accelerating the rate at which new debt accumulates. It’s the engineering equivalent of maxing out a credit card and ignoring the bill: it’ll catch up to you fast, with interest.

What the Smart Money (and Research) Actually Says

The industry benchmarks tell a vastly different story than that restrictive 12-15% cap. Take Shopify's "25 Percent Rule." They advocate for a quarter of engineering time dedicated to debt: 10% for daily code hygiene, 10% for weekly debt issues, and 5% for larger monthly projects. This isn't "overhead"; it's proactive maintenance, the very engine of sustainable velocity.

Jacob Kaplan-Moss, a legend in the Django community, suggests a starting point of 10-20% for technical debt management, highlighting that "anything less does not allow for the various types of debt to all be addressed." The critical takeaway here is that not all debt is created equal; different types demand different time horizons and tailored approaches. And let's be crystal clear: this allocation is purely for strategic technical debt. It doesn't even begin to cover the everyday, inevitable bandwidth required for regular bug fixes. Those are table stakes for operating any robust system, separate and essential, and often get mistakenly lumped in, further squeezing out the crucial debt work that truly moves the needle.

The evidence is overwhelming: TinyMCE found companies actively managing debt can free up engineers to spend 50% more time on business-critical work. One CIO from a leading cloud provider put it starkly: "By reinventing our debt management, we went from 75% of engineer time paying the [tech debt] 'tax' to 25%. It allowed us to be who we are today." Getting this right doesn’t just improve operations—it changes how fast you can win in the market.

The DORA Connection: How Debt Devours Your DevOps Dreams

The decade of research from the DevOps Research and Assessment (DORA) team isn't just academic; it’s gospel for why technical debt management directly impacts business outcomes. And it becomes absolutely non-negotiable as we push for faster delivery cycles. DORA’s four key metrics—deployment frequency, lead time for changes, change failure rate, and time to restore service—give us a holistic view of both speed and stability.

Here's why that 10-15% constraint is a DevOps death sentence, especially when aiming for multiple deployments a day:

• Change Lead Time: Elite teams ship multiple times per day with change lead times under 26 hours. Technical debt is a lead time killer, making every code change a complex, high-stakes gamble. When debt festers unchecked due to arbitrary limits, even minor tweaks become agonizingly slow and risky—the exact opposite of what DevOps practices aim to achieve.

• Deployment Frequency: DORA's 2024 research confirms that high-performing teams, even with larger codebases, sustain high deployment frequency only through disciplined debt management. Trying to ship faster while barely addressing debt is like telling a team to run full speed through mud—unsustainable and guaranteed to slow them down over time. When your goal is multiple deployments daily, an unaddressed debt burden transforms from an annoyance into a systemic blocker.

• Change Failure Rate: This is where unchecked debt shows its true colors—usually when you can least afford it. More debt almost always means higher failure rates. This ignites a vicious cycle: teams slow down deployments to mitigate failures, completely torpedoing those precious DevOps velocity goals. Trying to fix bugs quickly in production (which our new model demands) becomes exponentially harder and riskier on a foundation riddled with debt.

The companies that truly master their debt aren’t just avoiding problems—they're actually accelerating their growth. Some even see up to 20% more revenue compared to those who let it pile up.

The Merciless Math of Compound Interest

The economics of technical debt are brutal. Stripe estimates a $3 trillion impact on global GDP. For a 50-person engineering team with a $100k average salary, which is admittedly quite low for nearshore or on-shore teams in 2025, the 33% time lost to debt represents a staggering $1.65 million annually in pure opportunity cost.

But here’s the kicker, the point that should keep us up at night: crippling debt servicing to 10-15% doesn't reduce this cost; it accelerates it exponentially. When teams can only dedicate 10-15% to debt management while debt is accumulating at 30-40%, and you're simultaneously pushing for faster delivery, that deficit compounds weekly, not monthly. What could have been a few hours of refactoring becomes a multi-week rewrite. A simple library upgrade morphs into a months-long migration that completely derails your DevOps transformation.

In our payment processing world, managing our own gateway, settlement, BINs, and risk, where every millisecond counts and downtime is nearly unforgivable, I've seen firsthand the critical importance of proactive maintenance. A decision to defer a key performance optimization, simply to 'save' time for a new feature, inevitably leads to system slowdowns and a degraded customer experience. We wouldn't just be losing milliseconds; we would be risking customer trust and facing the potential for attrition due to a non-performant product. That’s the true cost of kicking the can down the road.

The Morale Multiplier: When Your Team Gives Up

Beyond the cold, hard numbers, constrained debt allocation creates a morale crisis that infects everything else—especially when you're trying to cultivate a DevOps culture of ownership. Developers already spend 23% of their time on debt, and a shocking 76% report it utterly crushes their morale. When teams know they’re building on quicksand but aren’t given the time to fix it, and are simultaneously told to deploy more frequently, engagement doesn't just dip; it plummets off a cliff.

DORA’s 2024 research is crystal clear: teams in stable, supportive environments, where developers are truly empowered, drive positive outcomes. The "move fast and constantly pivot" mentality, without addressing the underlying technical reality, actively "negatively impacts developer well-being and consequently, overall performance."

Our best engineers—the ones who truly understand the long-term implications, the ones you desperately want to retain for successful DevOps adoption—are particularly sensitive to this. They get frustrated when organizational policies tie their hands, preventing them from building sustainable systems while simultaneously demanding impossible speed.

A Better Way: Debt as an Accelerator, Not a Burden

The most successful organizations I’ve had the privilege to work with—especially those backed by private equity, where sustainable growth is paramount—don’t view technical debt allocation as overhead. They see it as a strategic investment, an accelerator. Here’s a framework that’s consistently delivered:

1. Establish a Baseline of 20-25%: This is your foundation. Be flexible to adjust based on system maturity (newer systems might need 15-20%; legacy systems often demand 25-35%) and business cycles.

2. Categorize by Impact and Urgency: Security debt? Immediate attention, no questions asked. Performance debt directly hitting customer experience? Priority over architectural cleanup. Developer productivity debt (slow builds, clunky tools)? Consistent, weekly attack.

3. Measure Debt Impact on DORA Metrics: Connect the dots. Track how debt reduction efforts directly improve deployment frequency and slash change failure rates. This hard data is your currency for justifying allocation to business stakeholders and showcasing undeniable ROI.

4. Create Radical Debt Visibility: Maintain a brutally honest, transparent debt register that quantifies the business impact of deferred maintenance. When stakeholders can see that a two-day refactoring effort will prevent a 20% slowdown in future feature development, the allocation discussion shifts from "cost" to "investment."

The Only Path Forward

Organizations stuck in the mindset of viewing technical debt as an unavoidable cost center will always be playing catch-up. But companies that recognize debt management as a core competency—one that enables faster feature delivery, rock-solid reliability, and higher team retention—these are the ones building sustainable competitive advantages, crucial for any private equity portfolio company.

The question isn't whether you can afford to allocate 20-25% of engineering time to technical debt. The real question, the one that should keep us up at night, is whether you can afford not to. In our payment processing world, managing our critical infrastructure, where every millisecond counts and downtime is measured in millions, we've learned that debt isn't something you manage around. It's something you proactively, strategically invest in.

In today's fast-paced market, the latest industry reports consistently show that companies actively managing technical debt aren't just reducing risk; they're gaining a crucial competitive edge. The organizations that truly internalize this core truth—that tech debt is an investment, not just a cost—will be the ones thriving when their competitors are finally crippled by the tech debt bill. Don't be caught flat-footed. Invest wisely.