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Overview

Optimizing return on investment (ROI) involves creating a vision, strategy, and process for maximizing the amount of money that is gained from software process improvement (SPI). In other words, it is best to maximize the amount of money that is returned or earned above the resources that are spent on SPI. Optimizing ROI essentially means choosing, designing, or using a SPI method with the largest number of benefits. Optimizing ROI means something for large, nonprofit organizations as well. It involves maximizing the value of their investments and expenditures.

There are two fundamental scenarios to consider when optimizing ROI. The first is the commercial operation or firm that wishes to make a profit. In this scenario, the commercial firm wishes to invest in a SPI method. However, the firm actually wants to recoup its investment in the SPI method. That is what SPI methods are all about. Commercial firms do not invest in SPI methods for the sake of SPI. Commercial firms invest in SPI methods to make more money than they are currently making. SPI is not a philosophical exercise or an exercise in philanthropy for commercial software firms. For the commercial firm, SPI is a means to fix a problem, optimize the production line, and produce more units at a lower price. SPI is used by commercial firms to increase the yield of the production line. You may be in the wrong business if you are part of a commercial firm and you are not trying to increase its profitability and performance.

Optimizing ROI is a tool not only for the profit-driven commercial firm. Optimizing ROI is just as well suited for a large, nonprofit organization. Why? Isn't the job of a large, nonprofit organization to spend money, not make money? The answer is often a resounding "yes." If your job is to spend money, then it is your job to optimize the value of your investments. Oftentimes, large, nonprofit organizations are given budgets of $10 million, $100 million, or even $1 billion to spend.

Why not get the greatest number of products and services for every dollar spent? Large, nonprofit organizations are notorious for spending $10 or even $100 for every single dollar of products and services. Why not increase the value of the nonprofit dollar beyond a single penny or dime? Large, nonprofit organizations can increase their spending power significantly by optimizing the ROI of SPI. They can extend the value of their budgets by using basic ROI tools to identify, quantify, evaluate, and choose wise investments. Instead of buying one product or service this year, why not buy 10, 100, or 1,000 products or services by optimizing ROI?




ROI of Software Process Improvement. Metrics for Project Managers and Software Engineers
ROI of Software Process Improvement: Metrics for Project Managers and Software Engineers
ISBN: 193215924X
EAN: 2147483647
Year: 2004
Pages: 145

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