You have a piece of functionality that you need to add to your system. You see two ways to do it, one is quick to do but is messy - you are sure that it will make further changes harder in the future. The other results in a cleaner design, but will take longer to put in place.
Technical Debt is a wonderful metaphor developed by Ward Cunningham to help us think about this problem. In this metaphor, doing things the quick and dirty way sets us up with a technical debt, which is similar to a financial debt. Like a financial debt, the technical debt incurs interest payments, which come in the form of the extra effort that we have to do in future development because of the quick and dirty design choice. We can choose to continue paying the interest, or we can pay down the principal by refactoring the quick and dirty design into the better design. Although it costs to pay down the principal, we gain by reduced interest payments in the future.
The metaphor also explains why it may be sensible to do the quick and dirty approach. Just as a business incurs some debt to take advantage of a market opportunity developers may incur technical debt to hit an important deadline. The all too common problem is that development organizations let their debt get out of control and spend most of their future development effort paying crippling interest payments.
The tricky thing about technical debt, of course, is that unlike money it's impossible to measure effectively. The interest payments hurt a team's productivity, but since we CannotMeasureProductivity, we can't really see the true effect of our technical debt.
One thing that is easily missed is that you only make money on your loan by delivering. Following the DesignStaminaHypothesis, you need to deliver before you reach the design payoff line to give you any chance of making a gain on your debt. Even below the line you have to trade-off the value you get from early delivery against the interest payments and principal pay-down that you'll incur.
Technical Debt comes in various forms, some of which can be good and some bad - I use the TechnicalDebtQuadrant to describe them.
Ward Cunningham has a video talk where he discusses this metaphor he created.
A couple of readers sent in some similarly good names. David Panariti refers to ugly programming as deficit programming. Apparantly he originally started using a few years ago when it fitted in with government policy; I suppose it's natural again now.
Scott Wood suggested "Technical Inflation could be viewed as the ground lost when the current level of technology surpasses that of the foundation of your product to the extent that it begins losing compatibility with the industry. Examples of this would be falling behind in versions of a language to the point where your code is no longer compatible with main stream compilers."
Steve McConnell brings out several good points in the metaphor, particularly how keeping your unintended debt down gives you more room to intentionally take on debt when it's useful to do so. I also like his notion of minimum payments (which are very high to fix issues with embedded systems as opposed to web sites).
Aaron Erickson talks about Enron financing.
(Original posting 3 Aug 2004.)