Last updated on July 8th, 2021 at 11:52 am
Using the term interest to refer to the metaphorical interest charges of 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.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 resulting from 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.
What exactly are “metaphorical interest charges?”
Briefly, MICs are variable and often unpredictable [Allman 2012]. MICs differ from interest charges on financial debt for at least eight reasons. For any particular class of technical debt:
- MICs can fluctuate dramatically
- MICs on technical debt can be unpredictable
- MICs can differ for different instances of the same kind of technical debt
- MICs can sometimes be deferred or advanced without penalty
- MICs on technical debt can be difficult to measure
- MICs can change when other debts are retired
- Where the misunderstandings about MICs come from
- The Principal Principle: Focus on MICs
I examine each of these properties in more detail in the posts listed above.
Available: here; Retrieved: March 16, 2017