Wednesday, November 14, 2007

Code Debt, Product Market Debt, and Customer Debt

During software development code debt is accrued when decisions adversely affect the ability to extend, expand, or maintain the software code base. It is hard for me to define code debt however I know when I am accruing code debt. For instance, if I copy and paste some code to create a new class instead of taking the time to figure out if there should be some base classes, virtual methods, or interfaces I know that I am accruing code debt. Often the choice to accrue code debt is based on expediency, stealing from the future to pay for today.

Product Market Debt is accruing anytime a competitor has their product in the market and your's is not. It is also accruing if a competitor has a better product.

Customer Debt accrues if your product is of poor quality, is missing essential features, is hard to use, or any other aspect that the customer finds less than satisfactory.

Before the first release of the product the Code Debt is only known to the developers. The product marketing team will not recognize code debt and will not understand the concerns of the developers. Clearly the customers will not see any of the effects of code debt for a product that has not released!

Before the first release of the product the Product Market Debt is the driving concern of the product marketing team. Often the developers do not feel the same sense of urgency that the product market team feels. Again the customers will not know of any Product Market Debt for a product that hasn't sipped.

In order to avoid the accrual of too much Product Market Debt the product marketing team will set a release date. Product marketing knows that Customer Debt will be accrued if there are essential features missing and therefore product marketing creates a list of features to be released.

The feature list and the release date become a concern for the developers. Development knows that if they try to do too much in too short of a time that they will accrue Code Debt. The developers know that too much code debt will result in Customer Debt followed immediately by the accrual of Product Market Debt. For example if the Code Debt is high and the product is unreliable the customer will immediately become dissatisfied with the product. Time and money spent to increase the product reliability is the monetary value of Code Debt. While the developers are spending their time fixing bugs to increase reliability they are NOT developing new features and thus we are now accruing Product Market Debt because essentially we are falling behind. Loss of market share can be calculated as a monetary value which is the value of Product Market Debt. Customers returning the product and the lack or loss of sales is the monetary value associated with Customer Debt.

The interaction of each of these Debts and the effects of Debt weigh heavily on the company's decision making process. Often the group that has the most influence within the company will control which type of debt is the primary concern. Often if the company was founded on a software product and grew around this product the concern of debt will be Code Debt, Customer Debt, and finally Product Market Debt. This may help one understand why some software companies fail in the market place. If the company is not a software company and is a company that is developing software to assist in its operations then the company may focus on Product Market Debt, Customer Debt, and finally Code Debt. This may help one understand why such companies struggle with software development cost overruns, continuous emergencies and outages of the software, and conflicts between the developers, the I.T. department, and the "Business".

Each type of Debt is constantly accruing. The plan is to manage the rate of accrual. Code Debt accrues even if you have the best code that has ever been developed. It accrues because the eventually re-write is always on its way. If your product is developed with .NET 2 for Windows XP eventually you will find that the Product Market Debt is sufficient to force a re-write for .NET 3 and Vista. The previous statement shows that Product Market Debt is always accruing as well such as the release of a competing product or a new development framework and a new computer operating system. Customer debt is always accruing as well. The customer sees new features of a new operating system and they want the product to take advantage of them or the customer sees a new technology and imagines how great it would be if the product integrated with that technology.

Either of the three Debts can break your company.

The position of the company influences which Debt will be of primary concern.

If the company is creating a new software product for an existing space then Product Market Debt may be the greatest concern. You have to get the product out to compete with the existing products and hopefully you can leap ahead of the existing feature set. Underestimating the scope of the software development task often leads such a company to under staff development and thus create an environment that will heavily accrue Code Debt. I advise that you should remember that all three Debts are accruing for the competitors as well. If you are fortunate enough to plan the development of your product coinciding with the release of a new operating system (or other Product Market Debt driving force) then the competitors will be obliged to pay for their Product Market Debt and overhaul or maybe even re-write their product.

If the company has a mature product with a loyal customer base then the company may choose to accrue more Code Debt and hurry out a new release to ward off a new competitor or a new release of an existing competitor's product. The accrual of the Code Debt will result in an increased rate of accrual for Customer Debt. The Code Debt will result in a lower quality product and thus the customer will be dissatisfied. If the goal is to quickly release software updates/patches to the customer to pay off the Customer Debt you will find you have fallen into a trap. There is no quick release when there is Code Debt. The need for the quick release will cause decisions such as "throwing more people" at the problem or accruing more Code Debt.

If the company is developing a new software product for a new market space then there is no Customer Debt as of yet. Product Market Debt is hard to measure because you do not know if another company has had the same idea and is about to release. Code Debt does not exist yet because there is no code, however the first debt that will start to accrue is Code Debt, and it starts as soon as the first line of code is wrote.

Sufficient funding is one aspect of controlling all three Debts. However it is not sufficient to guarantee success. If you have sufficient funding to hire enough product marketing people to define the product and the needed release schedule, and enough developers to create the product with all of the listed features by the release date with the highest quality code possible and enough customer interaction during development then all three Debts have been addressed. However the money is not sufficient to guarantee success because you may have hired enough developers, enough product marketers, and other persons necessary but if these people are inefficient or incompetent all of the money in the world will not "save you".

1 comment:

Amity said...

Good post.