8.5 PSPSM NPV Methodology

The return on investment (ROI) methodology for the Personal Software Process ^SM is a procedure to measure, quantify, and analyze its economic value. The Personal Software Process ^SM is a training curriculum that is used to teach software project and quality management. ROI is the amount of money gained , returned, or earned above the resources spent on the Personal Software Process ^SM . 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 the Personal Software Process ^SM has unique elements for estimating costs, benefits, and B/CR. Its cost, benefit, B/CR, ROI%, NPV, and breakeven point methodologies are rather simple. Key elements include its software cost model and total life cycle cost model, which are used to estimate the costs and benefits of using the Personal Software Process ^SM . Figure 32 illustrates the ROI methodology for the Personal Software Process ^SM .

Figure 32: ROI Methodology for Personal Software Process ^SM

8.1 PSP ^SM Cost Methodology

The cost methodology for the Personal Software Process ^SM is a procedure to measure, quantify, and analyze the amount of money spent. The Personal Software Process ^SM incurs cost for training, but results in the lowest overall software maintenance costs. Cost is the economic consequence of using the Personal Software Process ^SM to create a new and improved software process. Its cost methodology is a two-part process that consists of estimating training and software costs. The cost methodology for the Personal Software Process ^SM has unique elements for software development costs. Its cost methodology consists of a detailed accounting of training costs and the application of a rather simple software cost model. Key elements include the custom software effort model, which is based on historical productivity data. These are used to approximate the complete costs of software development, in conjunction with the Personal Software Process ^SM . Figure 33 illustrates the cost methodology for the Personal Software Process ^SM .

Figure 33: Cost Methodology for Personal Software Process ^SM

Estimate training cost for PSP ^SM : The objective of this activity is to estimate all of the training costs for PSP ^SM . This substep includes: estimate training time cost for PSP ^SM , estimate nonclassroom time cost for PSP ^SM , estimate travel cost for PSP ^SM , and add training time, nonclassroom time, travel, and training fee cost for PSP ^SM .

Estimate software cost for PSP ^SM : The objective of this activity is to estimate the costs of software analysis, design, implementation, and test. This substep includes: divide software size by productivity for PSP ^SM .