Tag Archives: Technical Debt

Real SMB IT: On ‘Technical Debt’

What is Technical Debt?

When you take out a loan, you understand that the money you receive today comes with a liability of repayment, and of course, that repayment comes with interest.

If you are an executive or manager in the small to medium business space, you should understand that a similar type of debt comes along with your IT spending too.

The term Technical Debt was coined several years ago, primarily as a way of demonstrating risks in the application development life cycle. (in other words when writing or modifying software programs- and before you state that you don’t write software programs, that contractor modifying your ERP or sales program? Yes, you got it…)

I believe technical debt goes beyond developers though. As soon as you have signed the check for some new piece of software or business tool, you are already incurring some technical debt. This is because you are now going to be living with that decision for a while.

As an analogy, imagine that you have recently purchased a 2012 model year car, then imagine that you visited your local auto show and you see that the upcoming 2013 model of the same car has twice the features, better fuel economy, and even a little bit less expensive.

As nice as that 2013 model may look, if you are like most of us, until you have fully paid the lease or loan payments in full, that fancier model is far out of reach.

That type of technical debt is unavoidable. Yes, you can argue that if you don’t buy anything, that debt does not exist. That is a truth, however you are also not obtaining any possible efficiency or value either.

Then, there is the interest payments due..

This next level of technical debt is both insidious and expensive. (and the reason the term was coined)

This technical debt results from poor standards, poor planning, poor or non-existing documentation as well as lax or non-existent controls.

I am not going to explain this one in detail though! Because Andrea Dallera has already done that perfectly in this post titled; On technical debt (now with chickens!)

Photo Credit Alan Levine via flickr