10.5 SW-CMM NPV Methodology

The return on investment (ROI) methodology for the Software Capability Maturity Model is a procedure to measure, quantify, and analyze its economic value. The Software Capability Maturity Model is a set of guidelines for selecting software suppliers and performing software process improvement. ROI is the amount of money gained , returned, or earned above the resources spent on the Software Capability Maturity Model . 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 Software Capability Maturity Model has unique elements for estimating costs, benefits, and B/CR. Its cost and benefit methodologies are complex, although its B/CR, ROI%, NPV, and breakeven point methodologies are simple. Key elements include the process and total life cycle cost models, which are used to estimate its costs and benefits. Figure 46 illustrates the ROI methodology for the Software Capability Maturity Model .

Figure 46: ROI Methodology for Software Capability Maturity Model

10.1 SW-CMM Cost Methodology

The cost methodology for the Software Capability Maturity Model is a procedure to measure, quantify, and analyze the amount of money spent. The Software Capability Maturity Model incurs cost to develop processes, resulting in higher productivity and lower maintenance. Cost is the economic consequence of using the Software Capability Maturity Model to create new and improved software processes. Its cost methodology is an eight-part process that consists of estimating process, product, preparation, assessment, software, meeting, test, and maintenance costs. The cost methodology for the Software Capability Maturity Model has unique elements for estimating process costs. Key elements include the process, assessment, software development, meeting, test, and maintenance cost models. These are used to approximate the costs of software development and maintenance, in conjunction with the Software Capability Maturity Model . Figure 47 illustrates the cost methodology for the Software Capability Maturity Model .

Figure 47: Cost Methodology for Software Capability Maturity Model

Estimate process cost for SW-CMM : The objective of this activity is to estimate the cost of developing policies and procedures for SW-CMM . This substep includes: estimate Level 2 process cost for SW-CMM , estimate Level 3 process cost for SW-CMM , and estimate Level 2 and 3 process cost for SW-CMM .

Estimate product cost for SW-CMM : The objective of this activity is to estimate the cost of developing documents, work authorizations, records, reports , and meeting minutes for SW-CMM . This substep includes: estimate Level 2 product cost for SW-CMM , estimate Level 3 product cost for SW-CMM , and estimate Level 2 and 3 product cost for SW-CMM .

Estimate preparation cost for SW-CMM : The objective of this activity is to estimate the cost of assessment indoctrination, assessment response conditioning, and mock assessments for SW-CMM . This substep includes: estimate indoctrination cost for SW-CMM , estimate response-conditioning cost for SW-CMM , estimate mock assessment cost for SW-CMM , and estimate indoctrination, response-conditioning, and mock assessment cost for SW-CMM . (Assessment preparation is not necessarily a one-time activity. This activity may take place as many times as are necessary to prepare for the assessment. The goal is to pass the assessment the first time around, through iterative preparatory steps.)

Estimate assessment cost for SW-CMM : The objective of this activity is to estimate the cost of assessment planning, assessment preparation, assessment meetings, and assessment follow-up for SW-CMM . This substep includes: estimate assessment planning cost for SW-CMM , estimate assessment preparation cost for SW-CMM , estimate assessment meeting cost for SW-CMM , estimate assessment follow-up cost for SW-CMM , and estimate assessment planning, preparation, meeting, and follow-up cost for SW-CMM .

Estimate software cost (baseline) for SW-CMM : The objective of this activity is to estimate the costs of software analysis, design, and implementation. This substep includes: estimate software cost (Boehm) for SW-CMM , estimate software cost (Walston/Felix) for SW-CMM , estimate software cost (Bailey/Basili) for SW-CMM , estimate software cost (Doty) for SW-CMM , and estimate software cost (average) for SW-CMM .

In this case, the outputs of the software cost models by Boehm, Walston/Felix, Bailey/Basili, and Doty were averaged together. This was done as sort of a Delphi method to arrive at an average software cost. The reader is free to substitute contemporary cost models, such as COCOMO II, PRICE-S , SLIM , Knowledge Plan , or any others, in order to accurately estimate software costs. The formulas for these models are illustrated in Chapter 5.

Estimate meeting cost for SW-CMM : The objective of this activity is to estimate the cost for performing the Software Inspection Process. This substep includes: estimate meeting cost (BNR) for SW-CMM , estimate meeting cost (Gilb) for SW-CMM , estimate meeting cost (AT&T) for SW-CMM , estimate meeting cost (HP) for SW-CMM , estimate meeting cost (Rico) for SW-CMM , and estimate meeting cost (average) for SW-CMM .

The outputs of the BNR, Gilb, AT&T, HP, and Rico Software Inspection Process cost models were averaged together. Again, this was done as a Delphi method to arrive at an average Software Inspection Process cost. The formulas for these models are illustrated in the free Web Added Value ¢ materials available at www.jrosspub.com.

Estimate test cost for SW-CMM : The objective of this activity to estimate the cost of software testing based on defects escaping the Software Inspection Process. This substep includes: estimate starting defects for SW-CMM , estimate meeting efficiency for SW-CMM , estimate pre-test defects for SW-CMM , estimate test efficiency for SW-CMM , estimate post-test defects for SW-CMM , and estimate test cost ( projected ) for SW-CMM .

Estimate maintenance cost for SW-CMM : The objective of this activity is to estimate the cost of software maintenance based on defects escaping the Software Inspection Process and testing. This substep includes: estimate total life cycle cost for SW-CMM and estimate maintenance cost (projected) for SW-CMM .