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Software by Numbers: Low-Risk, High-Return Development

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Software by Numbers: Low-Risk, High-Return Development


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  • Copyright 2004
  • Dimensions: 7" x 9-1/4"
  • Pages: 208
  • Edition: 1st
  • Book
  • ISBN-10: 0-13-140728-7
  • ISBN-13: 978-0-13-140728-2

Why is software development difficult? Why can't we write software successfully? Denne and Cleland-Huang address this issue head on and provide real answers. Arguing that software development education and practice have become increasingly disconnected from the conversations of those who define the requirements and articulate the needs for that software. This book introduces the Incremental Funding Methodology (IFM), an ROI-informed approach to software development in which software is developed and delivered in carefully prioritized chunks of customer valued functionality. IFM integrates traditional software engineering activities with financially informed project management strategies. IFM heuristics provide clarity into important metrics such as project level NPV, ROI, initial start-up investment costs, and time needed for a project to reach self-funding status. It enables developers, customers, and business stakeholders to answer critical questions related to the development and delivery of a product and to optimize strategies accordingly. Compatible with both traditional environments such as RUP, and agile XP environments, IFM equips developers and project managers with techniques and principles for increasing the financial returns of a software project and for identifying development schedules that make a project financially feasible.

Sample Content

Online Sample Chapter

The New ROI in Software Development

Table of Contents


1. Software Development after dot.com.

Software Development Is Easy. There's a Method to the Madness. If History Teaches Us Anything… Minimum Marketable Feature. MMF Selection. Opening the Black Box of Software Development. Risk Control. Sigma Techniques. Summary. References.

2. The New ROI.

Applications and ROIs. Why ROIs Matter. The Business Case. Cash Flow Projections. Payback Time. Present Value of Future Money. Net Present Value. Breakeven Time. Internal Rate of Return. Summary of the Terms. An Example. Incorporating MMFs into the Financial Case. Comparing the MMF-based ROI with the Classic ROI. Taking the Risks into Account. The Impact of MMF Ordering. Summary. References.

3. Identifying and Valuing Marketable Features.

Incremental Funding Methodology. Minimum Marketable Features. Candidate MMFs. Determining the Value of an MMF. Development and Delivery Precursors. The MMF Precedence Graph. Architectural Precursors. Summary. References.

4. Incremental Architecture.

The Place of Architecture. Architecture versus Rules. The Problem with Architecture. Pieces of the Pattern. A Value-Driven Approach. The Codependency of Architecture. Taking Architecture in Easy Stages. A Different Decomposition. One-to-Many Dependencies in Architecture. Architectural Coherency. Multiple Inheritance in Architecture. Spiral Architecture. Summary. References.

5. IFM Sequencing Strategies.

Delivering Valued Features. Cost versus Value Analysis. Cost-Benefit Analysis of an MMF Delivery Sequence. The Complexity of the Task. MMF Sequencing Strategies. The Greedy Approach. A Simple Look-Ahead Approach. The Weighted Look-Ahead Approach. Sequencing MMFs and AEs. Risk Mitigation. Iterating the Sequencing Decision. Summary. References.

6. MMF Categories and Parallel Development.

The Impact of MMF Behavior. Time-Sensitive Delivery. Exponential Growth Patterns. Concurrent Development. Summary. References.

7. Managing Intangibles.

Apples and Oranges: Dealing with Intangibles. Managing Intangibles. A Pairwise Approach to Quantifying Intangibles. Hybrid MMFs. The Impact of Intangibles on the Cost-Benefits Analysis. Baseline NPV. Potential NPV. Lost Opportunity Costs. Summary. References.

8. IFM and the Unified Process.

Introduction. Inception. Elaboration. MMF Development and Delivery. MMF Design. MMF Construction. MMF Selection Revisited. Summary. References.

9. IFM and Agile Development.

The Challenges. Incremental Development the Agile Way. Clustering User Stories into MMFs. Release Planning: Bundling User Stories in Releases. Assessing the NPV of the Release Plan. Release Planning Meeting. The Architecture Question. Simplest versus Look-Ahead Solution. Other Agile Development Environments. SCRUM. Summary. References.

10. Informed Decision Making.

A Collaborative Approach. Getting a Project Funded. Manipulating Project Characteristics. The IFM Window. Implementing IFM Processes. The Impact of IFM Strategies on Commercial Frameworks. How Management Benefits from IFM. When Projects Go Wrong. Where Next? Summary. References.

11. A Case Study: IFM in Action.

Introduction. IFM Element Definition Phase. Financial Phase. Computation Phase. Measuring the Effectiveness of the IFM Heuristic. ROI Analysis. Cash Flow and Breakeven Time. Summary.

Appendix A.

Appendix B.



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