Understanding and Controlling Software Costs

Abstract Understanding of software costs is important because of the overall magnitude of these costs (in 1985, roughly 70 billion per year in the U. S. and over 140 billion per year worldwide) and because of the fundamental impact software will have on our future quality of life. Section 1 of this paper discusses these issues. Section 2, the main portion of the paper, discusses the two primary ways of understanding software costs. The “black-box” or influence-function approach provides useful experimental and observational insights on the relative software productivity and quality leverage of various management, technical, environmental, and personnel options. The “glass-box” or cost distribution approach helps identify strategies for integrated software productivity and quality improvement programs, via such structures as the value chain and the software productivity opportunity tree. The most attractive individual strategies for improving software productivity identified in Section 2 are: •Writing less code;•Getting the best from people;•Avoiding rework;•Developing and using integrated project support environments. Section 2 provides overall surveys of early and recent progress along these and other lines identified by the opportunity tree. Better understanding of software costs leads to better methods of controlling software project costs, and vice versa. Section 3 discusses these issues. It points out that some good frameworks of techniques exist for controlling software budgets, schedules, and work completed, but that a great deal of further progress is needed to provide an overall set of planning and control techniques covering software product qualities and end-user system objectives.