Before we enter into the idea of Technological debt, its better we understand what technological debt is all about. Technology debt is basically when you “borrow” time to avoid having to pay it now – but likely having to pay it later, generally with interest.   There is surely a cost to this decision; you are simply taking on the cost because the cost of not meeting the deadline is much higher. The concept of Technical debt is common associates with extreme programming, especially in the context of refactoring. Hence, it implies that restructuring existing code is intrinsic as a part and parcel of developing process.

Fundamentals of Technological Debt

It is imperative to grasp the basics of technology debt to run the business. But it is a complex phenomenon nevertheless.  At the outset, it is important to understand when making “tradeoff” decisions, which in fact, you are incurring debt.  Here, awareness is intrinsic and eventually it is the first step.  Next is to assess the “interest rate” on the debt.  The interest rate is low compared to the “value” (regarding shipping a product now) that you can incur.  But, often it is not — and it’s better to pay now, than pay significantly more lately.

Difference between Technological debt and financial debt

Technology debt certainly differs with the idea of financial debt.  The most significant parallel is that of “interest” (i.e. when one incurs financial debt, there is an understanding that the amount you must pay later is higher than what you would have had to pay today).  As a matter of fact, financial debt in business is very logical and dynamic in every sense. As long as you can create value from the cash you borrow today that exceeds the cost of capital; things are in your control.    But there is no denying the fact that the problems crop up when you don’t generate this value, and the debt becomes a larger and larger burden.

Understanding the implication of trade off 

It is very necessary that while making the classic tradeoff decisions in technology, we should be aware of the implication factors in every sense. At the outset, learn to separate the tradeoffs.  Secondly, to approximate the “interest rate” so you don’t dig yourself into a hole you can’t dig yourself out of later.  Last but not the least, when resources do become available, start paying offs some of your old debts.  This can be done very easily with things like code refactoring and replace the old proprietary code with new components that use open and established standards.  Just like financial debt, there is something very uplifting about cleaning up some of these old messes.  The trick is in knowing which debt to pay off.

Technical debt is by-product of complex necessity

There is no denying the fact that the technical debts come up as the by-product of complex requirement. To meet a project deadline, it is a fact that sometimes people develop a complicated proprietary code, even though simpler alternatives may have been available. Hence, with each such action, technical debt proliferates. This concept is quite similar to high-interest, short-term borrowing.

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