A Simple Estimate of the Cost of Software Project Failures and the Breakeven Effectiveness of Project Risk Management

Authors:
Stephen P. Masticola
Affiliations:
Siemens Corporate Research, USA
Venue:
ESC '07 Proceedings of the First International Workshop on The Economics of Software and Computation
Year:
2007

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Abstract

Based on easily obtained data, a rough (but simple) estimate of the cost to an enterprise of software project failures can be formed. Using similar analysis, it is possible to estimate the effectiveness that a software quality improvement project will need to have upon the project failure rate in order to break even economically. This provides an informal calculation that can be used to cost-justify either a more complete investigation or risk management.