Code refactoring is the process of clarifying and simplifying the design of existing code, without changing its behavior. Agile teams are maintaining and extending their code a lot from iteration to iteration, and without continuous refactoring, this is hard to do. This is because un-refactored code tends to rot. Rot takes several forms: unhealthy dependencies between classes or packages, bad allocation of class responsibilities, way too many responsibilities per method or class, duplicate code, and many other varieties of confusion and clutter.
Every time we change code without refactoring it, rot worsens and spreads. Code rot frustrates us, costs us time, and unduly shortens the lifespan of useful systems. In an agile context, it can mean the difference between meeting or not meeting an iteration deadline.
Refactoring code ruthlessly prevents rot, keeping the code easy to maintain and extend. This extensibility is the reason to refactor and the measure of its success. But note that it is only “safe” to refactor the code this extensively if we have extensive unit test suites of the kind we get if we work Test-First. Without being able to run those tests after each little step in a refactoring, we run the risk of introducing bugs. If you are doing true Test-Driven Development (TDD), in which the design evolves continuously, then you have no choice about regular refactoring, since that’s how you evolve the design.