12.5 CMMI NPV Methodology

The return on investment (ROI) methodology for Capability Maturity Model Integration is a procedure to measure, quantify, and analyze its economic value. Capability Maturity Model Integration is a set of guidelines for selecting systems and software engineering suppliers and performing process improvement. ROI is the amount of money gained , returned, or earned above the resources spent on Capability Maturity Model Integration . Its ROI methodology is a six-part process that consists of estimating costs, benefits, benefit/cost ratio (B/CR), ROI%, net present value (NPV), and breakeven point. The ROI methodology for Capability Maturity Model Integration has unique elements for estimating costs, benefits, and B/CR. Its cost and benefit methodologies are complex, although its B/CR, ROI%, NPV, and breakeven point methodologies are simple. Key elements include the process and total life cycle cost models. Figure 60 illustrates the ROI methodology for Capability Maturity Model Integration .

Figure 60: ROI Methodology for Capability Maturity Model Integration

12.1 CMMI Cost Methodology

The cost methodology for Capability Maturity Model Integration is a procedure to measure, quantify, and analyze the amount of money spent. Capability Maturity Model Integration incurs cost to develop processes, resulting in higher productivity and lower maintenance. Cost is the economic consequence of using Capability Maturity Model Integration to create a new and improved software process. Its cost methodology is an eight-part process that consists of estimating process, product, preparation, assessment, software, meeting, test, and maintenance costs. The cost methodology for Capability Maturity Model Integration has unique elements for estimating process costs. Key elements include the process, assessment, software development, meeting, test, and maintenance cost models. These are used to approximate the costs of software development and maintenance. Figure 61 illustrates the cost methodology for Capability Maturity Model Integration .

Figure 61: Cost Methodology for Capability Maturity Model Integration

Estimate process cost for CMMI : The objective of this activity is to estimate the cost of developing policies and procedures for CMMI . This substep includes: estimate Level 2 process cost for CMMI , estimate Level 3 process cost for CMMI , and estimate Level 2 and 3 process cost for CMMI . (The process costs for CMMI exceed those of the Software Capability Maturity Model . CMMI demands more rigor in process compliance and therefore more policies and procedures and more cost. SW-CMM requires fewer policies and procedures and therefore lower process cost.)

Estimate product cost for CMMI : The objective of this activity is to estimate the cost of developing plans, documents, records, and analyses for CMMI . This substep includes: estimate Level 2 product cost for CMMI , estimate Level 3 product cost for CMMI , and estimate Level 2 and 3 product cost for CMMI .

Estimate preparation cost for CMMI : The objective of this activity is to estimate the cost of assessment indoctrination, assessment response conditioning, and mock assessments for CMMI . This substep includes: estimate indoctrination cost for CMMI , estimate response-conditioning cost for CMMI , estimate mock assessment cost for CMMI , and estimate indoctrination, response-conditioning, and mock assessment cost for CMMI .

Estimate assessment cost for CMMI : The objective of this activity is to estimate the cost of assessment planning, assessment preparation, assessment meetings, and assessment reporting for CMMI . This substep includes: estimate plan and prepare for appraisal stage cost for CMMI , estimate conduct appraisal stage cost for CMMI , estimate report results cost for CMMI , and estimate plan and prepare for appraisal, conduct appraisal stage, and report results stage cost for CMMI .

Estimate software cost (baseline) for CMMI : The objective of this activity is to estimate the costs of software analysis, design, and implementation. This substep includes: estimate software cost (Boehm) for CMMI , estimate software cost (Walston/Felix) for CMMI , estimate software cost (Bailey/Basili) for CMMI , estimate software cost (Doty) for CMMI , and estimate software cost (average) for CMMI .

In this case, the outputs of the software cost models by Boehm, Walston/Felix, Bailey/Basili, and Doty were averaged together. This was done as sort of a Delphi method to arrive at an average software cost. The reader is free to substitute contemporary cost models, such as COCOMO II, PRICE-S , SLIM , Knowledge Plan , or any others, in order to accurately estimate software costs. The formulas for these models are illustrated in Chapter 5.

Estimate meeting cost for CMMI : The objective of this activity is to estimate the cost for performing the Software Inspection Process. This substep includes: estimate meeting cost (BNR) for CMMI , estimate meeting cost (Gilb) for CMMI , estimate meeting cost (AT&T) for CMMI , estimate meeting cost (HP) for CMMI , estimate meeting cost (Rico) for CMMI , and estimate meeting cost (average) for CMMI .

The outputs of the BNR, Gilb, HP, AT&T, and Rico Software Inspection Process cost models were averaged together. Again, this was done as a Delphi method to arrive at an average Software Inspection Process cost. The formulas for these models are illustrated in the free Web Added Value ¢ materials available at www.jrosspub.com.

Estimate test cost for CMMI : The objective of this activity is to estimate the cost of software testing based on defects escaping the Software Inspection Process. This substep includes: estimate starting defects for CMMI , estimate meeting efficiency for CMMI , estimate pre-test defects for CMMI , estimate test efficiency for CMMI , estimate post-test defects for CMMI , and estimate test cost ( projected ) for CMMI .

Estimate maintenance cost for CMMI : The objective of this activity is to estimate the cost of software maintenance based on defects escaping the Software Inspection Process and testing. This substep includes: estimate total life cycle cost for CMMI and estimate maintenance cost (projected) for CMMI .