Indirect Benefits of Improved Software Practices

The return on investment figures in the published literature have mostly been based on operational savings, that is, on reducing development cost per line of code written or per function point delivered. While these savings are impressive, the greater business benefit might arise from the significant indirect returns attributable to improved software practices. Better software practices improve cost and schedule predictability, reduce risk of cost and schedule overruns, provide early warnings of problems, and support better management.

For a software products company, what is the business value of improving schedule estimation accuracy from ±100 percent to ±10 percent? What is the value of being able to make a commitment to customers 6 to 12 months in advance of a scheduled completion date with high confidence of delivering on that commitment? For a company that develops custom software, what is the business value of being able to provide a fixed-price bid with high confidence that the project will not significantly overrun the bid? For a retail sales organization, what is the value of being able to plan cutover to a new system with pinpoint accuracy? What is the value of knowing with confidence that cutover will occur October 1, as planned, with little risk of running into the holiday sales season?

Unlike the operational benefits that most of the industry literature has focused on, the indirect benefits of improved software practices open the door to additional revenue opportunities. For top decision makers, these indirect benefits may be more compelling than the direct, cost-savings benefit.