20.2 High Benefits

Overview

The breakeven point of software process improvement (SPI) methods is the economic value at which the benefits overtake and exceed the costs. This is the profit of the SPI methods. Breakeven point is a useful measure of how far out into the future the benefits of SPI methods will be achieved. Breakeven point indicates in numeric terms when the benefits of SPI methods can be expected, achieved, and obtained. There are three basic inputs, variables , or terms to the breakeven point equation: cost, old productivity, and new productivity. The breakeven point equation consists of dividing the costs of the SPI methods by one less the productivity of the old process. The result is divided by the productivity of the new process.

However, the breakeven point model requires that we determine the sources of the costs, old productivity, and new productivity. The breakeven point inherently and implicitly indicates when the investment cost of the new SPI method is recovered. Therefore, only the special costs of the SPI methods will be used. The special costs include training, process, product, preparation, assessment, and inspection costs.

Now we just have to determine the sources of the old and new productivity of the SPI methods. We have been comparing the costs and benefits of the SPI methods against the costs and benefits of using only the testing process. Therefore, the old productivity is the software size divided by the total life cycle costs of using software testing alone. The new productivity is the software size divided by the total life cycle cost of the SPI method.