Shipping imperfect software is like going into debt. When you incur debt, the illusion of doing things faster can lead to exponential growth in the cost of maintaining software. Software debt takes five major forms: technical, quality, configuration management, design, and platform experience. In today’s rush to market, software debt is inevitable. And that’s okay—if you’re careful about the debt you incur, and if you quickly pay it back.
“If you work in technology, you’re probably familiar with terms like ‘technical debt.’ The metaphor seems easy, but using it to influence change can be remarkably hard. To do that, you’re going to want to present options to decision makers, backed up by evidence. I’ve been impressed watching Chris Sterling research and refine his work in just this area for several years, and I’m pleased to see him release it as a book.
In any given software developer's career, there are many different things they need
to create. Of the software they need to create, given time constraints and resources,
it's almost impossible for them to perform the research involved to produce
everything correctly from scratch.
A recent field experiment by Wertenbroch, Soman, and Nunes
(2002) provides direct evidence on the link between this type of deliberate “debt
aversion” (Prelec and Loewenstein, 1998) and the need for self-control, showing that
individuals who score high on a scale measuring impulsivity prefer to pay with cash as
opposed to credit.
In the wake of the global financial crisis, there has been strong, renewed interest in the
behavior of public debt, especially in advanced economies. However, empirical work on debt
cycles and debt sustainability has been constrained in the past by lack of public debt datasets
covering long time periods and a wide group of countries.
The dependent variable leverage is one minus the ratio of equity over assets in market
values. It therefore includes both debt and non-debt liabilities such as deposits. The argument
for using leverage rather than debt as the dependent variable is that leverage, unlike debt, is
well defined (see Welch, 2007). Leverage is a structure that increases the sensitivity of equity
to the underlying performance of the (financial) firm.