20.1 Low Costs

17.6 Capability Maturity Model Integration

The benefits of using Capability Maturity Model Integration to help produce 10,000 lines of code are $3,023,064. This was obtained by subtracting $1,486,933 in new total life cycle costs from $4,509,997 in old total life cycle costs.

The special, new, or additional costs that are required consist of process, product, preparation, assessment, and inspection costs. The special costs to use Capability Maturity Model Integration are $541,300, $400,400, $48,000, $47,700, and $70,833, respectively. This totals $1,108,233 to introduce Capability Maturity Model Integration as a SPI method.

The development cost of $254,400, testing cost of $195,000, and maintenance cost of $966,700 were not included as special costs. The development, testing, and maintenance costs either stayed the same or decreased. Had the development, testing, or maintenance costs increased, the differences or the increases would have been included.

Let's determine the B/CR of Capability Maturity Model Integration to help produce 10,000 lines of code. Divide the benefits of $3,023,064 by the costs of $1,108,233 for Capability Maturity Model Integration . The B/CR of using Capability Maturity Model Integration to help produce 10,000 lines of code is 3:1.

Let's determine the adjusted benefits of Capability Maturity Model Integration to help produce 10,000 lines of code. Subtract $1,108,233 in Capability Maturity Model Integration costs from $3,023,064 in gross Capability Maturity Model Integration benefits. The result is $1,914,831 in adjusted benefits.

Let's determine the ROI of Capability Maturity Model Integration to help produce 10,000 lines of code. Divide the adjusted benefits of $1,914,831 by the costs of $1,108,233 for Capability Maturity Model Integration . Multiply the result by 100%. The ROI of using Capability Maturity Model Integration to help produce 10,000 lines of code is 173%. Table 31 illustrates the NPV of Capability Maturity Model Integration .

Table 31: NPV of Capability Maturity Model Integration

SPI Method	Benefits/Costs
CMMI Benefits (Gross)	$3,023,064
CMMI Costs	$1,108,233
CMMI B/CR	3:1
CMMI Benefits (Adjusted)	$1,914,831
CMMI ROI	173%
CMMI Benefits (NPV)	$2,368,650
CMMI B/CR (NPV)	2:1
CMMI Benefits (Adjusted/NPV)	$1,260,416
CMMI ROI (NPV)	114%

Now we are ready to determine the NPV of the gross benefits of Capability Maturity Model Integration to produce 10,000 lines of code. Divide the gross benefits of $3,023,064 by the devaluation rate of 1.27628156. The NPV of the gross benefits of using Capability Maturity Model Integration to help produce 10,000 lines of code is $2,368,650.

Now let's determine the B/CR of Capability Maturity Model Integration using the NPV of the gross benefits. Divide the NPV of the gross benefits of $2,368,650 by the costs of $1,108,233 for Capability Maturity Model Integration . The B/CR of using Capability Maturity Model Integration is 2:1 using the NPV of the gross benefits.

Now let's determine the adjusted benefits of Capability Maturity Model Integration using the NPV of the gross benefits. Subtract $1,108,233 in Capability Maturity Model Integration costs from $2,368,650, which is the NPV of the gross benefits. The result is $1,260,416 in adjusted benefits.

Finally, let's determine the ROI of Capability Maturity Model Integration to produce 10,000 lines of code using adjusted benefits. Divide the adjusted benefits of $1,260,416 by the costs of $1,108,233 for Capability Maturity Model Integration . Multiply the result by 100%. The ROI of using Capability Maturity Model Integration to help produce 10,000 lines of code is 114% using NPV.