Chapter Thirteen. Business Case for Better Software Practices

When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind.

LORD KELVIN, 1893

Companies that invest in post-gold rush development practices have found that their investments pay off. In 1994, James Herbsleb reported that the average "business value" (roughly the same as return on investment) for 13 organizations that had taken on systematic improvement programs was about 500 percent, with the best organizations realizing returns of 900 percent.^[1] In 1995, Neil C. Olsen reported similar returns for organizations that had made significant investments in staffing, training, and work environments.^[2] In 1997, Rini van Solingen reported that the average ROI was 700 percent with the best organization realizing returns of 1,900 percent.^[3] In 2000, Capers Jones reported that the return on investment from process improvement could easily go into double digits (i.e., go higher than 1000 percent).^[4] A recent analysis by Watts Humphrey found that the ROI for improved software practices could be in the neighborhood of 500 percent or better.^[5]