The concept of MICs

Last updated on December 11th, 2017 at 10:39 am

Using the term interest to refer to the metaphorical interest charges that are associated with a technical debt is risky. The risk arises from confusing the properties of financial interest with the properties of the metaphorical interest charges on technical debt. Using an alternative term that makes the metaphor obvious can limit this risk. One such term is metaphorical interest charges, or for convenience, MICs.

Loose change
Loose change. The MICs on technical debt are  accumulated in two ways: (a) as “loose change,” namely, small bits of lost time, delays, and depressed productivity; and (b) as major blows to enterprise vitality in the form of lost revenue, delayed revenue, and missed market opportunities. Hard to say which category does more damage.

MICs aren’t interest charges in the financial sense; rather, the MICs of a technical debt represent the total of reduced revenue, incidental opportunity costs, and increased costs of all kinds borne by the enterprise as a consequence of carrying that technical debt. (Actually, now that I think of it, MICs can include financial interest charges if we find it necessary to borrow money as a consequence of carrying technical debt.) Because the properties of MICs are very different from the properties of financial interest charges, we use the term MICs to avoid confusion with the term interest from the realm of finance.

Briefly, MICs are variable and often unpredictable [Allman 2012]. MICs differ from interest charges on financial debt for at least six reasons. For any particular class of technical debt:

I examine each of these properties in more detail in the posts listed above.

References

[Allman 2012] Eric Allman. “Managing Technical Debt: Shortcuts that save money and time today can cost you down the road,” ACM Queue, vol 10 issue 3, March 23, 2012.

Available: here; Retrieved: March 16, 2017

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