Measuring Productivity of Software Projects: A Data Envelopment Analysis Approach

Current economic conditions are forcing information system departments to focus simultaneously on decreasing costs while increasing software productivity. Improving software productivity is becoming critical because software costs of large in‐house software companies have been increasing rapidly. For many organizations, however, measuring software productivity has been a difficult task. Using Data Envelopment Analysis (DEA), this research study investigates the productivity of 78 commercial system projects. The results of this study have practical implications for software project managers undertaking software development. The results showed that the DEA technology can be successfully used to identify efficient and inefficient software projects. Furthermore, within the inefficient group, DEA can also identify factors that affect software productivity in a positive or negative manner, allowing managers to take corrective actions. Based on the findings of this study, the manuscript also provides some practical guidelines for managers to follow in software development.