13.3 Team Software ProcessSM

12.5 CMMI NPV Methodology

The NPV methodology for Capability Maturity Model Integration is a procedure to measure, quantify, and analyze money returned less inflation. The ratio of discounted benefits to costs for Capability Maturity Model Integration remains high due to reduced maintenance costs. The reduced maintenance costs are largely due to the institutionalization or use of peer reviews or the Software Inspection Process. It is possible to have a smaller NPV if rigorous peer reviews are not utilized and large residual software defect populations remain . Larger software defect populations result in larger software maintenance costs. NPV is the discounted money earned from using Capability Maturity Model Integration to create a new and improved software process. Its NPV methodology is a three-part process that consists of estimating discounted benefits, special costs, and the B/CR. Its benefit methodology consists of combining the discounted net benefits together with the special costs using the B/CR formula. Key elements include lowering the gross benefits to form the discounted benefits. These are used to form a realistic estimation of the magnitude of the benefits to the costs. (B/CR is a ratio of benefits to costs for objectively analyzing economic value. ROI% is used to avoid overstating the benefits. NPV is a skeptical and even cynical approach to ensure benefits are not overstated. All three of these methods should be used as exhibited by this NPV methodology.) Figure 65 illustrates the NPV methodology for Capability Maturity Model Integration .

Figure 65: NPV Methodology for Capability Maturity Model Integration

Estimate NPV of benefits for CMMI : The objective of this activity is to discount the gross benefits of CMMI based on inflation. This substep includes: divide benefits by devaluation rate for CMMI .

Estimate adjusted NPV benefits for CMMI : The objective of this activity is to validate the benefits of CMMI by removing its costs. This substep includes: subtract special costs from NPV benefits for CMMI .

Estimate adjusted NPV B/CR for CMMI : The objective of this activity is to measure the magnitude of the discounted net benefits to the costs for implementing CMMI . This substep includes: divide adjusted NPV benefits by special costs for CMMI .