Return on Investment and Effort Expenditure in the Software Development Environment

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1 International Journal of Applied Information ytem (IJAI) IN : Return on Invetment and Effort Expenditure in the oftware Development Environment Dineh Kumar aini Faculty of Computing and IT, ohar Univerity, Oman Faculty of Engineering and IT, Univerity of Queenland, Autralia Moinuddin Ahmad Faculty of Buine, ohar Univerity, Oman ABTRACT oftware development i tediou, expenive and require lot of reource and invetment. Jutification of the reource and invetment are highly required in the oftware indutry. Development of reliable and quality oftware ha become increaingly important in today world. A tatic model of the oftware development life cycle that treat all module imilarly i becoming inadequate to the tak. In thi paper effort are made to quantify the concept of return on invetment and factor reponible for improving the return on invetment. In the econd part of the paper, we are trying to jutify the effort expenditure and how to optimize the effort expenditure. General Term Buine, oftware ytem, oftware Development Environment, oftware Teting Keyword oftware, effort, Return on Invetment, Teting, Model 1. INTRODUCTION A dynamic model of reengineering in the development procee i needed to achieve the high level of quality in the oftware development. Thi paper focue on reengineering the buine procee that produce commercial oftware to take advantage of oftware quality modeling technology. In particular, thi paper preent how to analye the cot and benefit of the accuracy of a oftware quality and cot of quality by meauring the effort [1, 2]. A cot-benefit analyi give inight into the implication of implementing the recommendation of a oftware quality model in the context of a dynamic development proce []. Logitic regreion in conjunction with a pecialized mathematical model, which we have been propoed, predicted whether each module wa fault-prone or not [4]. 2. RETURN ON INVETMENT uccee and failure of large-cale oftware development and Information Technology project have negative repercuion on tock price and market capitalization of the enterprie [5]. It alo impact exiting and future cutomer perception about the enterprie. Financial metric and ROI are becoming mandatory tool to convey effective deciion making and value creation ability of a ucceful oftware development enterprie. Buine value driver are etablihed uing ROI. Progre monitoring hould be done over the project duration and it help put miletone and metric in place. ROI i ued in review and deciion making in the oftware development environment. Miion and viion of the enterprie i etablihed uing ROI and it enable management and developer to participate in a hared common viion of buine ucce and to identify rik. The data collected and analyzed during the ROI calculation i ueful tool for future project and new contract[6]. ROI analye can be extended to meaure and govern other metric uch a day ale outtanding (DO), receivable outtanding, exce inventory, inventory cycle rate, and collection efficiency. One of the characteritic of a good ROI analyi i identifying rik, trade-off, and challenge aociated with maximizing benefit and minimizing cot. Care hould be exercied that rik are properly weighted o that they are not marginalized and imilarly a healthy doe of kepticim hould be exercied with reward. Once the ROI analyi i completed and area of potential improvement identified, it become a perfect opportunity to tep back and look at the entire cenario. The buine value benefit, the new environment, the oftware application, the reource, the cot outlay, and the procee will become clear. A good ROI analyi inject a healthy doe of reality. Application providing elf-ervice earch, virtual cutomer repreentative, and natural language interaction are more complex to tet [7]. Uer may interact with the application in variou way and the interaction varie ignificantly between individual uer ROI = (Net Benefit/Net Cot)* 100 ROI Percentage = (Net Benefit/Net Cot) x100% NPV = Initial Invetment+ [Net Benefit for Year 1/(1 + dicount rate)]+ [Net Benefit for Year 2/(1 + dicount rate)]2+.+ [Net Benefit for Year N/(1 + dicount rate)]. Net benefit can be either direct, in term of incremental revenue generated, productivity gained, or expene aved, or indirect, the redeployment of reource or tak that the organization would alternatively have had to hire new and like reource to perform. Net cot include recruiting, alarie, and benefit, oftware licening, and general and adminitrative overhead.. HOW ROI IMPROVE THE OFTWARE DEVELOPMENT ENVIRONMENT Productivity and ROI generally improve with oftware developer who follow the guideline lited below. 5

2 International Journal of Applied Information ytem (IJAI) IN : oftware quality and oftware productivity are cloely related. Both have to be imultaneouly improved. More oftware development doe not tranlate to better quality and vice vera, and a balance of both mut be contantly maintained. Working long hour on a project doe not ignify ucce or higher productivity. When the buine model and requirement are not greater, more effort i pent in writing the code. Automation tool are ued where appropriate at each tage of the project. Manual and repetitive component building and teting lead to lowered productivity, efficiency, and developer diatifaction. Better tool in the hand of bad developer do not make better code. There i no magic the bet people hould be driving the mot crucial apect of oftware application development. Define and manage interface at the deign level and not at the code level. 4. WHEN ROI I HARD TO QUANTIFY What we have dicued o far are quantifiable apect of ROI analyi. everal buine value of ROI are hard to quantify. Thee include the improvement attained in cutomer atifaction, cutomer ervice, and upport organization [8]. Additional iue uch a buine brand name and Time-to-market improvement. Improvement in cutomer ervice and upport leading to overall improvement in cutomer expectation management and atifaction. Improved buine agility. Reduction in uncertainty that may have exited due to lack of buine proce automation. Improvement in brand name and value of the enterprie. Increaed buine-to-buine collaboration. 4.1 oftware Quality, Teting and ROI IO/IEC 1599 tandard decribe the organizational element required to upport a meaurement proce and it organize meaurement into four key activitie: Etablih capability Plan meaurement Perform the meaurement proce Evaluate meaurement 5. OFTWARE TETING ROI Let u begin with the cot of quality and teting and how to determine baeline ROI. We will dicu how co-ourcing and automated tet tool improve ROI. We will dicu everal model with example and cae to illutrate bet mechanim of Applied ROI [9 ] Validation i the proce of evaluating a ytem or component during or at the end of the development proce to determine whether or not it atifie pecified requirement. Validation activitie can be divided into the following [10] Low level teting: Unit teting Integration teting High level teting: Functional teting ytem teting anity teting Regreion teting Acceptance teting tre teting Uability teting ecurity teting 5.1 Cot of Quality and Teting Let u dicu the cot metric for oftware development and quality that apply to oftware teting. It will be good to etablih a KPI for each of thee cot metric [11 ]. ome of thee cot metric are reviewed below. 5.2 Defect per 1000 Line of Code Mot organization have between 9 and 10 defect in every 1000 line of code [6]. ome organization have reported, a per a Verizon IT tudy lited earlier, reduction of defect by approximately 25 percent. 5. Fully Loaded Teter Cot Mot enterprie in the United tate, the European Union, and Japan ue thi metric to include cot of alary, benefit, worker compenation, taxe for payroll and tate diability fund, operational cot including computer, utilitie, and office pace. Thi i placed at between $10,000 oftware Quality and Tet ROI and $15,000 per teter. Thee cot are ometime ubtantially lower for outourced location where wage are le. A co-ourcing model a we will dicu later where in-houe QA team are upplemented by outourced quality and teting can lead to bet of both world[1]. 5.4 Time and Cot to Fix Defect According to publihed tudie [7, 8], on average it take about 6. hour for a developer to find and fix a defect. Uually, the average time pent fixing each bug i multiplied by the average number of bug in a project to arrive at metric for all the department project. Automated bug tracking tool, iue management procee, and good debugging tool et reduce thi time. 6

3 Cot International Journal of Applied Information ytem (IJAI) IN : X 10 X X Analyze oftware Development Life Cycle Accept Recognize Problem Deign Implement Tet Maintain Feaible Deploy Ecalating Cot off Fixing Defect Figure1: Cot V. Defect 7

4 Automation International Journal of Applied Information ytem (IJAI) IN : Maximizing ROI on oftware Development Vulnerability canning Internal canning Perimeter canning High Code Review Application Teting Automated Teting Low Penetration Teting In-houe or co-ource Outource or co-ource Fig.2. Typical Ditribution of ecurity teting Figure: Lifecycle of a Bug Figure how how ecurity teting can be ditributed among in-houe and outource and manual veru automated axe. Penetration teting i generally preferred done in-houe and manually, but vulnerability canning; including perimeter canning can be automated and outourced. Co-ourcing can be applied to either cae becaue, unlike pure outourcing, internal reource are available. In addition to the direct benefit of co-ourcing, there are everal intangible benefit a dicued below: Proven methodologie etablihed co-ourcing QA and tet companie have treamlined operation and tet practice. Documentation, tet plan template, methodologie, and procee of a good oftware Quality and Tet ROI co-ourcing partner can help QA manager effectively plan, manage, and deliver reult. Reource trength mot good co-ourcing QA and tet companie have highly trained and enthuiatic engineer who are familiar with a gamut of tool and technologie. Thi provide ignificant reource trength and team motivation required for the ucce of project. Fater time-to-market co-ourcing enable 24/7 tet and QA cycle and reduce the time required for conceptualization to the final product. Ramping up of a large pool of reource become poible. 8

5 International Journal of Applied Information ytem (IJAI) IN : QA open bug QA aign bug review bug acknowledge bug fixe bug decline bug aign bug back to QA QA review bug for fixe or declined reaon If fixed or reaon for declination i appropriate, QA cloe bug with matching reaon If not fixed or QA find reaon for reopening declined bug, QA aign it back to the developer Fig.4. Life cycle of a Bug in oftware Life Cycle Figure dicu the life cycle of the bug and how the bug are handled for the quality improvement. Open new bug. Aign bug. Review bug for fixe or declined reaon. If fixed or reaon for declination i appropriate, the teting and QA team cloe bug with matching reaon. If not fixed or teting and QA team find reaon for reopening the declined bug, it i aigned back to the developer 6. tatitical Modeling of Effort Expenditure Expreion of manpower ditribution on a oftware project over time i the main concern thee day. Rayleigh curve play an important role in tudying thee cae (Figure.1). We can model the curve by d dt 2 t 2Mte (1) Where d/dt i the taff build-up rate, t i the time interval between the tart of deign and product replacement. α i the 9

6 % of Total Effort International Journal of Applied Information ytem (IJAI) IN : phyic of the curve uppoed to be contant and M i the area under the curve, which repreent the total life-cycle effort including maintenance. By the theoretical definition of productivity in oftware, P (2) De Where i the ize of the oftware product and D e i the development effort. Productivity in oftware can be linked to Rayleigh manpower ditribution model. uppoe in the Rayleigh model, the top of the curve correpond to the development time d τ. Then the area under the curve which i approximately 48% of M, repreent the development effort D e. On the bai of the available project date, it i found that more productive project had an initial lower taff building and the le productive project had an initial fater taff build-up. Aume P δ be the difficulty of the project which correpond to initial taff build-up of a project. At t=0, the lope of the Rayleigh curve repreent P δ (Figure.5) Thu, P M 2 d Which i obtained by taking the derivative of (1) and etting t=0.equation () define difficulty. Alo, P (4) 2 / P D e=48% of M d t (time) P Figure 4 : Effort Expenditure Equation (4) define a relation between difficulty and productivity, where γ i proportionality contant. Alo, it wa defined and aumed earlier. () D e 48%ofM ` (5) Thu from equation (2), (), (4) and (5) we have, 2 / M (6) 2 M d 48 Or, 1/ 4 / 0.48M d (7) Thu, the total life-cycle effort i given a M 1/ (8) 4 / 0.48d t Let 0.48xr = T f = Technology factor, which may difference among project uch a programming kill/environment, hardware condition and individual expertie. Thu, M Hence, D T f ( d ) 0.48 T 4 1 e 4 f d 7 CONCLUION (9) (10) The development effort increae a the cube of the ize of the oftware product, if the chedule remain contant. Alo, the effort increae a the invere of the fourth power of development time for a fixed program ize. It i found that a tatic model of the oftware development life cycle that treat all module imilarly i becoming inadequate to the tak. In thi paper effort are made to quantify the concept of return on invetment and factor reponible for improving the return on invetment. we are trying to jutify the effort expenditure and how to optimize the effort expenditure in the oftware development environment. 8. LIMITATION The concept of return on invetment i to be verified on the certain number of oftware development project o that formulated concept can be upported by the data. The data upport of the model i to be implemented. 9. ACKNOWLEDGEMENT The author would like to thank ohar Univerity and Univerity of Queenland for the reearch upport and environment. Author would like to thank faculty member and tudent, epecially Prof Lance Bode for hi continuou upport for the reearch. We would alo like to thank our family member 40

7 International Journal of Applied Information ytem (IJAI) IN : REFRENCE [1] oftware Error Cot U.. Economy $59.5 Billion Annually. NIT Aee Technical Need of Indutry to Improve oftware-teting, June 28, [2] DK aini Teting polymorphim in object oriented ytem for improving oftware quality ACM IGOFT oftware Engineering Note 4 (2), 1-5, [] ikka, V.,200. Maximizing Outourced oftware Quality and ROI: electing and managing an Outourcer, ytem Development Management, Boca Raton, FL: CRC Pre. [4] Zarate, A. et al. 200.A Portable Natural Language Interface for Divere Databae Uing Ontologie. Computational Linguitic and Intelligent Text Proceing, Lecture Note in Computer cience, Vol. 2588, pp , New York: pringer-verlag, 200. [5] Roario,. and Robinon, H., 2000.Applying Model in Your Teting Proce, Information and oftware Technology, Vol. 42, No. 12, eptember 1, [6] Aii,., 2002.Tet Vector Generation: Current tatu and Future Trend. oftware Quality Profeional, Vol. 4, No. 2, March [7] Dineh Kumar aini, Lingaraj A. Hadimani and Nirmal Gupta, 2011.oftware Teting Approach for Detection and Correction of Deign Defect in Object Oriented oftware. Journal of Computing, Volume, Iue 4, April 2011, IN , pp [8] Dineh Kumar aini and Bimal Kumar Mihra, Deign Pattern and their effect on oftware Quality. ACCT Reearch Journal, INDIA.Vol.5, No.1, January 2007, pp [9] Dineh Kumar aini and Nirmal Gupta, Fault Detection Effectivene in GUI Component of Java Environment through moke Tet. Journal of Information Technology, IN Vol., iue, 7-17 eptember [10] Dineh Kumar aini and Nirmal Gupta, Cla Level Tet Cae Generation in Object Oriented oftware Teting. International Journal of Information Technology and Web Engineering, (IJITWE) Vol., Iue 2, pp page, March UA. [11] Dineh Kumar aini, Teting Polymorphim In Object Oriented ytem For Improving oftware Quality. ACM IGOFT Vol. 4 Number 2 March 2009, IN: , UA. [12] Wail M.Omar, Dineh K. aini and Mutafa Haan. 2010, Credibility Of Digital Content in a Healthcare Collaborative Community. oftware Tool and Algorithm for Biological ytem in book erie- Advance in Experimental Medicine and Biology, AEMB. pringer, Vol.696, Part 8, pp , DOI: / _7. [1] Dineh Kumar aini, 2011.ene the Future. Campu. Vol. 1- Iue 11, pp.14-17,february [14] Dineh Kumar aini and Moinuddin Ahmad, Modeling of Object Oriented oftware Teting Cot. The 2011 International Conference on oftware Engineering Reearch and Practice (ERP'11), World Congre in computer cience and Engineering, July 18-21, La Vega, UA. pp. -9. [15] Dineh Kumar aini and Moinuddin Ahmad, Enhanced oftware Quality Economic for Defect Detection Technique Uing Failure Prediction. The 2011 International Conference on oftware Engineering Reearch and Practice (ERP'11) World Congre in computer cience and Engineering, July 18-21, 2011, La Vega, UA, pp [16] Dineh Kumar aini, Lingaraj A Hadimani, Poonam V Vaidya and anad Al Makari, oftware Quality Model ix igma Initiative. The 2011 International Conference of Computer cience and Engineering (ICCE-2011) World Congre in Engineering, July 6-9 th 2011, London UK, pp [17] Lingaraj A. Hadimani, Dineh Kumar aini, Vaihali P Khoche and anad Al Makari, Comparion of oftware and Hardware Deign Tool (CAE v. imulator). The 2011 International Conference of Manufacturing Engineering and Engineering Management, (ICMEEM-2011), World Congre in Engineering, July 6-9 th, London, UK. [18] Dineh Kumar aini, anad Al Makari and Lingaraj Hadimani,2011. Mathematical Modeling of oftware Reuability. rd IEEE International Conference on Machine Learning and Computing (ICMLC, 2011) ingapore, February 26-28, 2011, IEEEXplore, /11. [19] R..E.fairle, The influence of COCOMO on oftware engineering education and training,- The Journal of ytem and oftware. New York: Vol. 80, Iue. 8; pg. 1201,

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