I just had a good conversation with Zadia Codabux, a graduate student at Mississippi State University and IBM Graduate Fellow. I am her IBM mentor. Her PhD research is on technical debt. We are trying to make sense of the various perspectives across the industry of what exactly is technical debt.

As I have a mentioned, a common definition of technical debt is that is a measure, in some unit, of the deficiencies of the code that may need to addressed in the future. A colleague (nameless since I do want to take the risk of misquoting him) suggests code deficiencies do not become debt until there is commitment to address the deficiencies.

While that insight make sense, I think that it misses a key insight: Creating deficiencies raises the probability of having to make the commitment to fix the code. Ignoring the fact that bad coding adds to the likelihood of having to make the commitment is a a path to ruin. Eventually the commitment will have to made and by then the cost may seriously damage the organization.  The cost of addressing the defect grows over time.

What I have been calling technical liability, in lieu of any better name, is a probabilistic view of the distribution of costs that might be assumed. Only by reasoning about the probability, can one drive understand whether the invest in reducing the deficiencies makes good economic sense.

As Ms. Codabux points out one source of technical debt is that the person coding is motivated to get the code done quickly, perhaps cutting corners, and is likely not to assume the debt. In other words, he or she creates the risk of someone else making the commitment. Getting rewarded for creating risk someone else will assume is called moral hazard. It is how banks that are too big to fail make money. They take risks counting on the government to bail them out. I think moral hazard is something we should address as a community.