Posts Tagged ‘Liability’
Forrester on Managing Technical Debt
Forrester Research analysts Dave West and Tom Grant just published their report on Agile 2010. Here is the section in their report on managing technical debt:
Managing technical debt
Dave: The Agile community has faced a lot of hard questions about how a methodology that breaks development into short iterations can maintain a long-term view on issues like maintainability. Does Agile unintentionally increase the risk of technical debt? Israel Gat is leading some breakthrough thinking in the financial measures and ramifications of technical debt. This topic deserves the attention it’s beginning to receive, in part because of its ramifications for backlog management and architecture planning. Application development professionals should :-
- Starting captured debt. Even if it is just by encouraging developers to note issues as they are writing code in the comments of that code, or putting in place more formal peer review processes where debt is captured it is important to document debt as it accumulates.
- Start measuring debt. Once captured, placing a value / cost to the debt created enables objective discussions to be made. It also enables reporting to provide the organization with transparency of their growing debt. I believe that this approach would enable application and product end of life discussions to be made earlier and with more accuracy.
- Adopt standard architectures and opensource models. The more people that look at a piece of code the more likely debt will be reduced. The simple truth of many people using the same software makes it simpler and less prone to debt.
Tom: Since the role I serve, the product manager in technology companies, sites on the fault line between business and technology, I’m really interested in where Israel Gat and others take this discussion. The era of piling up functionality in the hopes that customers will be impressed with the size of the pile are clearly ending. What will replace it is still undetermined.
I will be responding to Tom’s good question in various posts along the way. For now I would just like to mention the tremendous importance of automated technical debt assessment. Typical velocity of formal code inspection is 100-200 lines of code per hour. Useful and important that formal code inspection is, there is only so much that can be inspected through our eyes, expertise and brains. The tools we use nowadays to do code analysis apply to code bases of any size. Consequently, the assessment of quality (or lack thereof) shifts from the local to the global. It is no more no a matter of an arcane code metric in an esoteric Java class that precious few folks ever hear of. Rather, it is a matter of overall quality in the portfolios of projects/products a company possesses. As mentioned in an earlier post, companies who capitalize software will sooner or later need to report technical debt as line item on their balance sheet. It will simply be listed as a liability.
From a governance perspective, technical debt techniques give us the opportunity to carry out consistent governance of the software process based on a single source of truth. The single source of truth is, of course, the code itself. The very same truth is reflected at every level in the organization. For the developer in the trenches the truth manifests itself as a blocking violation in a specific line of code. For the CFO it is the need to “pay back” $500K in the very same project. Different that the two views are, they are absolutely consistent. They merely differ in the level of aggregation.
Technical Debt on Your Balance Sheet
Colleague Jonathon Golden introduced me to a new plug in to Sonar. The plug in calculates the cost to fix the technical debt accrued in a product. For example, you might find an accrued technical debt amounting to $1M in a 500KLOC application. Obviously, you will need to spend $2 per each line of code to “pay back” your debt.
The expression of technical debt in monetary terms is intriguing. Unlike financial debt, there is no credit limit on technical debt. Hence, unless a team is proficient at refactoring on an ongoing basis, technical debt tends to grow over time as the underlying software decays. Beyond a certain level of debt, no good option is available. The code decayed to the point in which fixing anything in a hazardous proposition – every fix is likely to break something else. Under such circumstances, most/all of the development team gets sucked into maintaining the software instead of developing new features and functions.
Monetizing technical debt can have two far reaching implications, as follows:
- A credit limit on technical debt can be established. For example, when the technical debt reaches a certain level (say 25 cents per line of code), new functionality is put on hold. The team applies itself to aggressive refactoring to reduce the debt to an acceptable level.
- For companies who capitalize software, technical debt could become a line item on the balance sheet. It will simply be listed as a liability.
From a customer perspective, the monetized technical debt on the balance sheet of a software vendor is a proxy for the technical risk involved in licensing software from this vendor. Such monetization could be easily extended to report technical debt per product family. With such reporting in place, the technical risk associated with licensing a specific product can be assessed.
Software vendors might frown at the requirement to monetize technical debt. I would contend that such a reporting requirement is absolutely consistent with the spirit of the Agile Manifesto:
Customer collaboration over contract negotiations
In other words, if you are reluctant to list your monetized technical debt you can’t really claim you practice Agile.