An approach to model the return on investment of organization-wide improvement projects using the concept of external effects

  • Authors:

  • Patrick Keil;Marco Kuhrmann

  • Affiliations:

  • Technische Universität München, Garching, Germany;Technische Universität München, Garching, Germany

  • Venue:
  • Proceedings of the 2006 international workshop on Economics driven software engineering research
  • Year:
  • 2006

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Abstract

Return on Investment in the software world is affected by many aspects addressing different targets. Currently it seems that no appropriate method to catch all relevant aspects of investments that affect not a single project's success, but the capabilities and potentialities of the organization that delivers software in different projects is available. In this paper, we present an approach to model interrelations between the different effects of such investments. It is based on the definition of four criteria by which "capability" of an organization developing software can be measured. For each of the four factors, we suggest a couple of indicators to determine the organization's level of maturity in that aspect. Furthermore, we sketch a method to integrate the anticipated benefits of improvement investments. This analysis is based on the theory of external effects since we believe that investments in one area have implications on the other competencies or aspects of software development capability.