“If it ain’t broke, don’t fix it.”
- Famous last words of many failed software projects.
For business managers, it’s often puzzling why software needs ongoing refactoring. The code works, customers are happy, revenue is flowing - so why spend money on something that seems to be running perfectly fine?
The harsh reality: ignoring refactoring is like skipping maintenance on a Formula 1 car. It might work for a few laps, but eventually, you’ll find yourself broken down on the side of the track while your competitors speed past.
This article will show you why refactoring is not optional, when it becomes dangerous, and how to find the sweet spot that keeps your engineering team productive without breaking the bank.
What is Code Refactoring?
Think of refactoring as renovating your house while you’re still living in it.
You’re not adding new rooms or changing the fundamental purpose of the building. Instead, you’re:
- Updating the electrical wiring to handle modern appliances
- Replacing old pipes before they burst
- Reinforcing the foundation to support additional floors
- Modernizing the heating system for better efficiency
In software terms, refactoring means improving the internal structure of your code without changing what it does for your users.
The application looks and behaves exactly the same, but underneath, it becomes more maintainable, secure, and ready for future features.
Why is Refactoring Necessary?
Imagine you’re running a small car manufacturing company. Everything seems to be going smoothly until…
The world around you changes:
- Roads become more bumpy (new security threats)
- Traffic laws change to left-side driving (new regulations)
- Customers demand larger, more robust vehicles (new feature requests)
- Government sets new emission standards (compliance requirements)
Your supply chain evolves:
- You want to upgrade the tires, but they won’t fit the old axles
- Better steel is available, but requires new manufacturing processes
- Your electronics supplier goes out of business. The new supplier uses different interfaces that need new integration logic
- Security vulnerabilities are discovered in your key systems, but the original supplier can’t fix them. The replacement system requires a complete door redesign
This is the reality of software development!
- Dependencies get outdated
- Security vulnerabilities are discovered
- Operating systems update
- Browsers change their standards
- Third-party APIs evolve
The simple printer in the corner of your office, that is not connected to the web? That’s maybe easy to manage.
But even here you will see issues when people suddenly have no USB A port on their computers any longer.
Modern software is usually connected to the web. There, you fight changes on a daily basis. It’s like maintaining a Formula 1 car during a race.
Can We Just Skip Refactoring?
Absolutely. You can save those refactoring costs - but those costs will reappear elsewhere, usually multiplied.
Here’s what happens when you skip maintenance:
Teams Get Slower
Remember our car example?
When you don’t upgrade the electronics but need to add a new feature, your team has to create complex workarounds. Instead of a simple integration, they’re building bridges between incompatible systems.
Real example: Adding a simple user notification feature that should take 2 days ends up taking 2 weeks because the team has to work around outdated authentication systems, legacy database structures, and deprecated APIs.
Systems Slowly Die
If you don’t plan to be in business in 5 years, then sure, skip refactoring. But for everyone else, technical debt compounds like interest on a credit card.
The only exception: You’re building a throwaway MVP to test market fit. These prototypes are designed to be discarded, not maintained.
The Hidden Costs Surface Later
- New developers take weeks to understand messy legacy code
- Simple bug fixes become archaeological expeditions
- Security vulnerabilities multiply in outdated dependencies
- Eventually, you’ll need a complete rewrite that costs 10x more than regular maintenance
Finding the Sweet Spot
While refactoring should be non-negotiable for production systems, engineering teams can also go overboard. This usually stems from perfectionism rather than the need to refactor.
The Perfectionism Trap
Many developers want to create “perfect code” - but they can’t even define what that means. Some struggle with the 80/20 rule, spending weeks optimizing code that already works well enough.
The Management Approach
Treat refactoring like any other aspect of your product:
Essential maintenance (non-negotiable):
- Keep libraries up to date
- Close security vulnerabilities
- Maintain compatibility with external systems
- Ensure regulatory compliance
Optimization work (prioritize like features):
- Code readability improvements
- Performance optimizations
- Architecture enhancements
- Developer experience improvements
Budget Allocation
A healthy software project typically allocates:
- 20-30% of development time to refactoring and technical debt
- 70-80% to new features and business requirements
This isn’t overhead - it’s the cost of keeping your software competitive and maintainable.
Decision Framework
Use this simple framework to evaluate refactoring needs:
Immediate Action Required
- Security vulnerabilities in dependencies
- Compatibility issues with critical systems
- Performance problems affecting users
- Compliance violations
Schedule Within Next Quarter
- Outdated dependencies with available updates
- Code that slows down new feature development
- Technical debt that increases bug frequency
- Developer experience issues affecting productivity
Consider for Future Sprints
- Code style improvements
- Architecture optimizations
- Performance enhancements for edge cases
- Developer tooling upgrades
Is there an AI for it?
There are even non-AI systems that help you for free!
Tools like Renovate or GitHub’s Dependabot scan your dependencies and help you keep them updated.
Linters and Coding Guidelines can help you to keep things maintainable right from the beginning.
The issue: While there is a lot of help (and also AI agents on the rise), you still need to count their costs in - at least what it takes to evaluate whether the help might be even worse.
The Bottom Line
Never save money on refactoring for production systems used by paying customers. It’s not a cost - it’s insurance against much larger future expenses.
However, monitor refactoring work closely to ensure it doesn’t spiral into perfectionism. This balance requires experienced engineering leadership who understand both technical necessity and business priorities.
Remember: the goal isn’t perfect code. The goal is sustainable, maintainable code that supports your business objectives without breaking your development velocity or your budget.
