Scrum Agile Project Management

Putting Some Numbers on Technical Debt

Technical debt is one of this great new metaphor that is applied to software development and more specially to agile project management approaches like Scrum. As its financial counterpart, technical debt is not necessary a bad thing as long as you are able to manage it wisely. In this article, Don Reinertsen will help you to put some numbers on the costs and benefits of your technical debt.

The article starts by discussing the technical debt metaphor and assessing the difference with financial debt. As Don Reinertsen wrote it: “When we analyze the economics of technical debt we need to be particularly careful about two issues. First, we need to be sure we include the full economic costs. Second, we need to be sure we account for the uncertain nature of the costs.”

He provides an interesting example on how you can compute the costs and benefits of the creation of some technical debt, including different factors like the cost of delaying a product launch to build a debt-free software. The article advice is that you should be very cautious when you compute the benefits, the interests and the principal to repay that are linked to the technical debt. It recommends to use a more neutral term like deferred work instead of technical debt.

The conclusion of Don Reinertsen is that “There will be times when technical debt behaves exactly like financial debt and others times when the differences are enormous. Reasoning purely by metaphor may lead to bad economic choices – adding some math can lead to good ones.”

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