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Side note: I love the analogy of a credit card to describe technical debt and its one I've used with clients before and they really respond to it. People (in t

by majc2 12y ago

Side note: I love the analogy of a credit card to describe technical debt and its one I've used with clients before and they really respond to it. People (in the UK at least), understand that the interest on a credit card can kill you, while a regular loan assumes that you're paying off the principal month to month. Posing the question, are you paying off that technical debt month to month or is it just sitting there really gets people thinking.

deleted 12y ago
[deleted]
gaius 12y ago
This is a better financial metaphor http://www.higherorderlogic.com/2010/07/bad-code-isnt-technical-debt-its-an-unhedged-call-option/ http://www.higherorderlogic.com/2010/07/bad-code-isnt-techni...
- onion2k 12y ago
  The point of a metaphor is to describe something so that the other person will be able to understand the original point. Choosing a metaphor is not a case of finding something as similar as possible; you have to find something that the other person will already understand. Consequently, the credit card metaphor is far better despite being less accurate.
  - gaius 12y ago
    That's a fair point but the massive popularity of payday loans in the UK suggests that many people don't understand that either. Any business manager in a position to hire programmers, ought to be able to understand options, the concept appears every day in business.
    - amirmc 12y ago
      > "... the concept appears every day in business." Umm, no. It does not. Maybe in finance or procurement but it is certainly not a term in general use.
      - gaius 12y ago
        Every company that sells things at a fixed price now, for delivery later, does this. They may call it something else, but the concept is the same.
        amirmc 12y ago
        Sure (as I tried to point out) but that doesn't mean that (a) every manager in the company understands it or (b) people in other types of business/industry understand it. Claiming that the concept exists is pretty useless if the appropriate language isn't used to describe it. For example, telling my Dad that he really needs to abate his ingestion of sodium chloride is not going to be as effective as telling him to cut down on salt.
- asuidyasiud 12y ago
  What is call option? /s
  - gaius 12y ago
    Let's say you are an airline and I am an oil company. You want to have a predictable cost for your fuel so you can plan, I want to charge whatever is the market price at the time. So a bank comes along and agrees, for a modest fee, that in a years time, you can buy fuel at a fixed price. In a year, they buy fuel from me and give it to you. If my price is lower, they pocket the difference as profit, but if it's higher, then they have to eat the cost and therefore make a loss (which is unlikely to be entirely covered by the fee you already paid them, but that's fine, because what you were really paying for was peace of mind). People have been doing this with agricultural products for at least 3000 years.
    - sokoloff 12y ago
      Agriculture and airlines tend to use futures to hedge, not options. A (long) futures contract is the right AND obligation to purchase a commodity at a set price at a set time (and place). A (call) options contract is the right BUT NOT the obligation to purchase a commodity at a set price within a set time (for the most typical American-style option).

by majc2 12y ago

deleted 12y ago

[deleted]

gaius 12y ago

This is a better financial metaphor http://www.higherorderlogic.com/2010/07/bad-code-isnt-technical-debt-its-an-unhedged-call-option/ http://www.higherorderlogic.com/2010/07/bad-code-isnt-techni...

onion2k 12y ago
The point of a metaphor is to describe something so that the other person will be able to understand the original point. Choosing a metaphor is not a case of finding something as similar as possible; you have to find something that the other person will already understand. Consequently, the credit card metaphor is far better despite being less accurate.
- gaius 12y ago
  That's a fair point but the massive popularity of payday loans in the UK suggests that many people don't understand that either. Any business manager in a position to hire programmers, ought to be able to understand options, the concept appears every day in business.
  - amirmc 12y ago
    > "... the concept appears every day in business." Umm, no. It does not. Maybe in finance or procurement but it is certainly not a term in general use.
    - gaius 12y ago
      Every company that sells things at a fixed price now, for delivery later, does this. They may call it something else, but the concept is the same.
      - amirmc 12y ago
        Sure (as I tried to point out) but that doesn't mean that (a) every manager in the company understands it or (b) people in other types of business/industry understand it. Claiming that the concept exists is pretty useless if the appropriate language isn't used to describe it. For example, telling my Dad that he really needs to abate his ingestion of sodium chloride is not going to be as effective as telling him to cut down on salt.
asuidyasiud 12y ago
What is call option? /s
- gaius 12y ago
  Let's say you are an airline and I am an oil company. You want to have a predictable cost for your fuel so you can plan, I want to charge whatever is the market price at the time. So a bank comes along and agrees, for a modest fee, that in a years time, you can buy fuel at a fixed price. In a year, they buy fuel from me and give it to you. If my price is lower, they pocket the difference as profit, but if it's higher, then they have to eat the cost and therefore make a loss (which is unlikely to be entirely covered by the fee you already paid them, but that's fine, because what you were really paying for was peace of mind). People have been doing this with agricultural products for at least 3000 years.
  - sokoloff 12y ago
    Agriculture and airlines tend to use futures to hedge, not options. A (long) futures contract is the right AND obligation to purchase a commodity at a set price at a set time (and place). A (call) options contract is the right BUT NOT the obligation to purchase a commodity at a set price within a set time (for the most typical American-style option).