The Incremental Funding Method: Data-Driven Software Development

Authors:
Mark Denne;Jane Cleland-Huang
Affiliations:
Sun Microsystems Inc.;DePaul University
Venue:
IEEE Software
Year:
2004

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Abstract

The last few years have seen intense scrutiny of the flawed business premises underlying the dot-com bubble of the late 1990s. The prevailing attitude then was that software investment could be repaid through the company's increased capital value in expectation of future profits. The current IT environment is greatly changed. Not only are organizations no longer willing to invest in software development without clear expectations for returns, but they also demand those returns in much less time. This clearly challenges the development community to change the way we do business.The Incremental Funding Methodology is a data-driven, financially informed approach to software development. IFM can analyze and sequence feature delivery to maximize net present value and to provide insight on how development decisions affect other financial metrics.