Thursday, December 3, 2009

Dealing with Design Debt Part 2½: The Smell of Fear

Its probably time for an update on the dealing with design debt series.  I promised part III would be the conclusion and it will be, but we’re not quite there yet, nevertheless there’s some story to tell now that will bridge the gap. 

Along with the business case made for the debt reduction project, there were also other business decisions that that had direct impact or were directly impacted by the project.  Most significant were the several projects on the schedule with direct overlap with key structures under construction as part of debt reduction.  To schedule these projects first would mean doing them twice, but not doing them first would mean delaying or missing revenue opportunities.

Measure twice, cut once.

From a purely technical perspective it made sense to complete the debt reduction project first, and tackle the dependent projects after.  This would allow us to design the solution for the new structure and implement once, rather than designing for the old structure then later retrofitting it for the new while also implementing twice.  However, the business case ran counter to the technical case.  These projects were estimated to have significant revenue impact, therefore delaying them until the completion of a long and risky debt reduction project was judged to represent a significant loss in revenue.

“It is a riddle, wrapped in a mystery, inside an enigma” - Churchill

Based on these projections, it was decided that the high revenue impact projects would be done prior to the debt reduction project, acknowledging the implied cost of implementing twice, and the ultimately less clean implementation.  Essentially, we had decided to take on debt during our debt reduction exercise.

Unfortunately, its not entirely clear whether that was the right decision or not.  The high revenue impact projects were completed but took longer than expected, pushed back the debt reduction project and made it a bit more complex.  Further, the actual revenue impact of those projects isn’t entirely clear nor is the impact of the additional debt and complexity particularly measurable. 

And there upon the rainbow is the answer to our neverending story

I guess the moral to this story is that, at least in this case, debt accumulation was an explicit rather than implicit trade-off decision.

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