I am working on an article with Steve Freeman on using real options to manage IT project risk.
We had an excellent session last week discussing the subject in general. One of the insights that came out of our discussion regarded technical debt. Technical debt is a commonly used term but it is incorrect. Debt is a fixed amount being owed. "Technical Debt" is really selling a call option. For short term gain, you open yourself up to unlimited downside. The cost of the "technical debt" is not fixed as it would be if it were debt but rather unlimited in the case of selling a call option.
Posted by chrismatts at August 8, 2004 10:19 AM