Abstract

Customers are demanding increasing value for the money they spend on high technology products. Moreover, competition in the high tech industry is increasing -nationally as well as internationally. As a result, satisfying the customer and providing increased customer value are becoming primary objectives for high technology executives and managers.Many firms that once considered themselves "hardware companies" are now finding that they are developing a significant amount of software. This software is becoming increasingly sophisticated and costly. Moreover, software projects are increasingly "on the critical path". Software developers can put in more effort and work harder. However, it isthe process used to develop the software which coordinates developer efforts and tools. This process can make or break the ability of the firm to deliver. From a strategic standpoint for many high tech firms, improving the software development processes is becoming critically important. However, it is difficult to determine which processes to improve. Studies have shown that firms are finding it difficult to quantitatively justify the resources required to successfully improve their software development processes [5]. Still, many firms are involved in software process improvement efforts.This paper provides summarized results from several companies who have been involved in process improvement activities to show the potential which can be achieved. We then discuss a framework for viewing process changes along strategic lines -with the goal of improving customer value. Once a set of potential process changes has been identified, these changes need to be evaluated. We discuss an approach which can be used to evaluate and tradeoff among proposed alternatives. This approach predicts the performance of process alternatives quantitatively in terms of development cost, product quality, and project schedule. In addition, financial measures such as return on investment (ROI) and net present value (NPV) can be obtained

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