The Differences between Technical Debt and Financial Debt


Looking at technical debt in a negative light, as something that stands in the way of new features when it grows, equates it to a credit card. If you don't make your payments each month, you are charged interest. If you make only the minimum payment each month, this interest builds and it can take you years to pay off your debt; and if you make minimum payment while continuing to charge more you may never get out of debt. After several rounds of doing this, you will have to announce bankruptcy.

However, having this same view of technical debt is probably too strict to be applied in actual software development.

Technical debt can be can be a tool, similar to when you float a bond at 5% to increase your income by 10%. This means that technical debt doesn't have the same meaning to your business stakeholders as it does to you. If you tell business stakeholders that you can release a project early but you will incur technical debt, to them it will be a no-brainer that you take on that debt. So if you are talking about incurring technical debt, speaking in terms of total cost of ownership may be more useful. You can say that you can release a project early but it will add on three months to the release of the next version; and this will give business a better picture of what it means to take on technical debt.

In the end, you may still end up taking on debt, but at least the understanding of what that means will be there and when you need time to pay it back it will be understood by business and technical stakeholders.

To read the full post visit here.

Filed in: Technical Debt
Get the Pulse Newsletter  Sign up for the latest Software Intelligence news Subscribe Now <>
Open source is part of almost every software capability we use today. At the  very least libraries, frameworks or databases that get used in mission critical  IT systems. In some cases entire systems being build on top of open source  foundations. Since we have been benchmarking IT software for years, we thought  we would set our sights on some of the most commonly used open source software  (OSS) projects. Software Intelligence Report <> Papers
In our 29-criteria evaluation of the static application security testing (SAST)  market, we identified the 10 most significant vendors — CAST, CA Veracode,  Checkmarx, IBM, Micro Focus, Parasoft, Rogue Wave Software, SiteLock,  SonarSource, and Synopsys — and researched, analyzed, and scored them. This  report shows how each measures up and helps security professionals make the  right choice. Forrester Wave: Static Application Security Testing, Q4 2017  Analyst Paper
Making sense of cloud transitions for financial and telecoms firms Cloud  migration 2.0: shifting priorities for application modernization in 2019  Research Report
Load more reviews
Thank you for the review! Your review must be approved first
New code

You've already submitted a review for this item