A common assumption vis-à-vis technical debt is that we can model its productivity-depressing and velocity-reducing effects. We model them as the “interest” on the technical debt (MICs). And we assume that MICs are relatively constant over time. In practice, MICs can fluctuate dramatically. Those fluctuations provide planners valuable insight and flexibility, if they choose to use it. Unfortunately, most plans I have seen make the assumption that MICs are relatively stable.
An example of MICs behavior
30-year average fixed mortgage rates in the United States, 2012-2017, in %. Over this five-year period, rates did fluctuate. But they did so in a narrow range of from 3.3% to just over 4.5%. When we speak of “interest,” we evoke an impression of relative stability. This happens even when we’re speaking of technical debt. MICs for technical debt can vary from 0 to well above MPrin in any given time period. That’s one thing that makes the term “interest” so misleading in the context of technical debt. Data provided by U.S. Federal Reserve Bank of St. Louis [Federal Reserve 2017].As an example of this assumption is available in a paper by Buschmann [Buschmann 2011b]. He states that the longer we wait to retire technical debt in design and code, the larger the amount of interest. This presumes constant or non-negative MICs. That assumption that might be valid for some situations, but it isn’t universally applicable.
Consider a project that entails maintenance or extension of parts of the system that don’t manifest a specific class of technical debt. And suppose that the assets in question don’t depend on elements that do manifest that debt. Such a project is less likely to incur the MICs associated with that debt. So with respect to any particular class of technical debt, there might be time periods in which no projects incur MICs. During those periods, the interest accrued can be zero. In other time periods, the interest accrued on account of that same class of technical debt could be very high indeed.
A capacity for projecting MICs associated with a particular class of technical debt can be useful to planners as they work out schedules for maintenance projects, development projects, and technical debt retirement projects. Technical debt retirement projects are also subject to MICs, including from classes of technical debt other than the debt they’re retiring.
Analogous to the functioning of governance boards, a technical debt resources board could provide resources for evaluating assessments of likely MICs for maintenance projects, development projects, and technical debt retirement projects. Decision makers could use these assessments when they set priorities for these various efforts. I’ll say more about technical debt resources boards in future posts.
References
[Buschmann 2011b] Frank Buschmann. “To Pay or Not to Pay Technical Debt,” IEEE Software, November/December 2011, 29-31.
[Federal Reserve 2017] Federal Reserve Bank of St. Louis. “30-Year Fixed Rate Mortgage Average in the United States (MORTGAGE30US).” Weekly time series.
The Principal Principle is that a focus on the metaphorical principal of a technical debt can be your undoing. Focus on the metaphorical interest charges. Drive them to Zero and keep them there.
Misunderstandings about the metaphorical interest charges on technical debt are costly. They prevent us from exploiting the properties of technical debt that reduce carrying costs and retirement costs. And the misunderstandings arise from the fact that the technical debt metaphor is only a metaphor—technical debt and financial debt are different.
The metaphorical interest charges (MICs) and metaphorical principal (MPrin) of a particular class of technical debt can change as a result of retiring other seemingly unrelated classes of technical debt. In most cases, engineering expertise is required to determine technical debt retirement strategies that can exploit this property of technical debt.
Unlike financial debt, for technical debt there are no legally required reports or disclosures. We can sometimes estimate MICs, but most organizations don’t track the data necessary to estimate MICs with useful precision. Indeed, developing useful estimates is often technically impossible.
Rescheduling interest payments on financial debt is possible only by prearrangement or in bankruptcy, but MICs on technical debt can often be rescheduled by rescheduling work that might incur them. This is useful when we plan to retire assets bearing technical debt, because their technical debt vanishes.
The common understanding of interest on financial debts doesn’t correspond to the reality of technology-based systems, which are the targets of the technical debt metaphor. Formulating sound technical debt policy depends on understanding the nature of the difference between interest on financial debt and the metaphorical interest charges associated with technical debt.
