Tarun Upadhyay wrote a fair criticism of our previous post on why incremental delivery is good on his blog today. It is great that he is extending the conversation, and he makes some valid points. We definitely missed a big benefit of incremental delivery, and will cover it in this post.
Category Archives: ROI
Posted in Agile, Process Improvement, ROI, Software development
Tagged benefits of incremental delivery, incremental delivery, incremental process, incremental software delivery, iteration, managing data, prototyping, requirements management, software cost estimate, software delivery, SRS, waterfall process
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Definition of sunk cost
Sunk cost is an expression representing the unrecoverable amount of money that has already been placed into an ongoing investment or project. It is one of the simplest, yet most commonly misused financial measurements of a project. We’ll learn how to avoid the most common mistake in project (financial) management, and how to survive when our boss makes the mistake.
Posted in Definitions, Project Management, ROI
Tagged investment decisions, managing data, project investment, return on investment, ROI, sunk cost
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Definition of payback period
We’ve talked previously about using ROI to determine which projects to fund. This isn’t the only way to make those decisions, as Ski points out with the concept of flush. Payback period is the measure of how quickly an investment returns the invested amount, or the break-even point in the investment.
Software Requirements Specification Iteration and Prototyping
Developing great software requirements demands iteration
In our previous post of an example of the software development process, we showed a linear flow through the process, as depicted in several posts over a couple weeks. What we failed to show was any of the iteration cycles, as Deepak points out by asking a great question in the comments on that post. In this post, we will show a little more about how the process works by showing how iteration fits into the machinery of software development.
Posted in Communication, Process Improvement, ROI, Requirements, Software development, Software requirements specification
Tagged agile requirements, business requirements, business software requirements, iterative requirements, managing data, prototyping, requirements definition, software requirements, software requirements specification, writing business requirements, writing requirements, writing software requirements
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Using ROI For Requirements Is A Risky Business
We’ve talked repeatedly about using ROI to drive prioritization of requirements based upon value. ROI can be used as the basis for prioritization for all decision making.
If we fail to take risk into account, our calculations will certainly be wrong, and we may make a poor decision. When we talk about accounting for risk in this context, we mean that we are accounting for the unlikely, undesired, or unintentional outcomes. We use the term expected value to refer to the risk adjusted approximation of the outcome. In financial circles, this is also called discounting.
The most common mistake people make when calculating ROI is failing to take into account the expected value of the return or the expected value of the cost of a project.
Posted in Prioritization, Project Management, ROI, Requirements, Software requirements specification
Tagged calculating returns, calculating roi, discounting, expected value, managing data, measuring return on investment, measuring roi, prioritizing requirements, requirements prioritization, requirements ROI, return on investment, risk, risk analysis, ROI
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Definition of Expected Value
Understanding the expected value of a possible future event allows us to make mathematically sound decisions. We can decide if we want to make an investment. We can assign a reasonable price for our services. We can prioritize requirements. Expected value is a calculation that should be used when calculating ROI.
Definition of ROI – Return on Investment
topsyWidgetPreload({ “url”: “http%3A%2F%2Ftynerblain.com%2Fblog%2F2006%2F02%2F01%2Fdefinition-of-roi-return-on-investment%2F”, “style”: “big”, “title”: “Definition of ROI – Return on Investment” }); We talk about ROI all the time – what is it, in layman’s terms? ROI is the acronym for return on investment. Another way to think of it is “How much profit will we make if we invest in this project?” [...]
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