Changing Metaphors

Bad code isn’t Technical Debt …


Agile consultant Steve Freeman highlights the significance of software quality and craftsmanship.

… it’s an unhedged Call Option. This is all Chris Matts’ idea.
He realised that the problem with the “Technical Debt” metaphor is
that for managers debt can be a good thing. Executives can be
required to take on more debt because it makes the finances work
better, it might even be encouraged by tax breaks. This is not the
same debt as your personal credit card. Chris came up with a better
metaphor, the Call Option.

I “write” a Call Option when I sell someone the right, but
not the obligation, to buy in the future an agreed quantity of
something at a price that is fixed now. So, for a payment now, I
agree to sell you 10,000 chocolate santas at 56 pence each, at any
time up to 10th December. You’re prepared to pay the premium
because you want to know that you’ll have santas in your stores at
a price you can sell.

From my side, if the price of the santas stays low, I get to
keep your payment and I’m ahead. But, I also run the risk of having
to provide these santas when the price has rocketed to 72 pence. I
can protect myself by making arrangements with another party to
acquire them at 56 pence or less, or by actually having them in
stock. Or, I can take a chance and just collect the premium. This
is called an unhedged, or “Naked,”
. In the financial world this is risky because it has
unlimited downside, I have to supply the santas whatever they cost
me to provide.

Call options are a better model than debt for cruddy code
(without tests) because they capture the unpredictability of what
we do. If I slap in a feature without cleaning up then I get the
benefit immediately, I collect the premium. If I never see that
code again, then I’m ahead and, in retrospect, it would have been
foolish to have spent time cleaning it up. On the other hand, if a
radical new feature comes in that I have to do, all those quick
fixes suddenly become very expensive to work with. Examples I’ve
seen are a big new client that requires a port to a different
platform, or a new regulatory requirement that needs a new report.
I get equivalent problems if there’s a failure I have to interpret
and fix just before a deadline, or the team members turn over
completely and no-one remembers the tacit knowledge that helps the
code make sense. The market has moved away from where I thought it
was going to be and my option has been called.

Even if it is more expensive to do things cleanly (and I’m not
convinced of that beyond a two-week horizon), it’s also less risky.
A messy system is full of unhedged calls, each of which can cost an
unpredictable amount should they ever be exercised. We’ve all seen
what this can do in the financial markets, and the scary thing is
that failure, if it comes, can be sudden—everything is fine until
it isn’t. I’ve seen a few systems which are just too hard to change
to keep up with the competition and the owners are in real

So that makes refactoring like buying an option too. I pay a
premium now so that I have more choices about where I might take
the code later. This is a mundane and obvious activity in many
aspects of business—although not, it seems, software development. I
don’t need to spend this money if I know exactly what will happen,
if I have perfect knowledge of the relevant parts of the future,
but I don’t recall when I last saw this happen.

So, the next time you have to deal with implausible delivery
dates, don’t talk about Technical Debt. Debt is predictable and can
be managed, it’s just another tool. Try talking about an Unhedged
Call. Now all we need is a way to price Code Smells.

Steve Freeman is an independent consultant specializing in Agile software development. A founder member of the London Extreme Tuesday Club, he was chair of the first XPDay and is a frequent organizer and presenter at international conferences. Steve has worked in a variety of organizations, from writing shrink-wrap software for IBM, to prototyping for major research laboratories. Steve has a Ph.D. from Cambridge University, and degrees in statistics and music. Steve is based in London, UK.
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