Making the Software Business Case: Improvement by the Numbers

Making the Software Business Case: Improvement by the Numbers covers an area too few software engineers have any exposure to: financial modeling and business analysis, as it relates to the IT domain. Reifer's concise (300 page) book provides a broad overview of how the IT area appears from the business side, including critical material on how to frame technical proposals in business terms.Amongst the many nuggets to be found in this book are:· useful tips on where money can be found· good insights into the politics of proposals and budgeting · getting middle management buy-in· countering executive challenges· successful management of cross-project initiative dynamics· software capitalization/depreciation· Discussion of reuse from a cost avoidance perspective.This book is not only good in terms of its material, it is also an eminently readable book in terms of style. Reifer elaborates his argument through the clever use of case studies that provide human interest and momentum to otherwise dry material. These case studies include:· A defense contracting firm implementing software process improvement· A public utility replacing an outdated mainframe-based transactional system with modern client-server technology· An industrial controls firm suffering from moribund products· A firm seeking to Internet-enable its internal systemsReifert places strong emphasis on "making your numbers believable." He argues that this believability must address these nontechnical considerations:· Cash flow· Cost basis· Cost/benefit · Estimate fidelity· Present value· Profit and loss · Risks· Source of funds· Tax implicationsHe does an admirable job in placing these concepts in context, and providing a clear overview of each. The utility case study demonstrates the importance of understanding the overall financial dynamics affecting one's enterprise. For example, the differences between capital and expense budgets can be key in determining whether to purchase or lease equipment. As Reifert elaborates in the utility scenario, "Because this has been a profitable year, an increase in expenses [i.e. leasing as opposed to purchase capital expenditures] could have a profound positive tax consequence." The book has many examples of this type of valuable, integrated business insight.Reifer has much sound general IT management advice mixed in with his financial message. A recurring theme through many of the discussions is the need for an executive sponsor, to provide political cover and tactical advice in forwarding the business case.He also urges the reader to frame benefits in terms of cost avoidance rather than cost reduction-promising cost reductions often lead to the question, "OK, then who are we going to let go?" Not a good way to win friends.I found his observations on the subject of central process quality assurance groups interesting:"Reinventing staff organizations such as process and quality assurance groups is a good idea. Engineers assigned to such staff groups get s

Don Reifer's book provides information not found in existing books on software engineering, process improvement, and project management. His primary audience is technical people who must sell a project to business people. In particular, he provides concrete, practical advice for selling a process improvement program. For example, Chapter 4 stresses the importance of focusing on cost avoidance instead of cost reduction to justify improvements. In Chapter 7 he suggests briefing middle managers individually to obtain their support. Based on my experience, this is sound advice because middle managers are often the most difficult people to convince in an organization. Giving personal attention to each manager pays big dividends later. He also suggests taking advantage of state tax laws to partially offset the costs of training employees. This is a win-win strategy for both the firm and the state. Training gives employees new skills and improves retention. This, in turn, helps the firm obtain more business and so generate more income for the local economy and more tax revenues for the state. He explains the difference between project and capital funds, and how to exploit this difference to obtain the resources you need. The book has many useful checklists. For example, one identifies the types and sources of information needed to prepare a business case. Another identifies the critical items to check when deciding to acquire a business.His book will also be of interest to marketing people who are preparing sales presentations for complicated technical products. For example, these individuals could prepare business cases to compare possible alternatives. Even experienced managers unfamiliar with software products and process improvement will find the case studies useful.Don Reifer illustrates the concepts presented in Part 1 with actual case studies in Part 2. These are based on his 30+ years of experience in the software field. The case study in Chapter 7 begins with what amounts to an engineering view of the problem and then the author provides comments indicating how a manager would like to see the information presented. This case study really shows the contrast between the technical and management ways of thinking. The case study in Chapter 8 shows how to assess the value of a company whose primary assets are intellectual property and knowledge capital.Overall, the book is concise and well written. I was able to quickly absorb the concepts and techniques without spending a lot of time. It is a valuable addition to my reference shelf.

This truly excellent book fills a large void in the software engineering and IT world - tying the business case to software. It is of paramount importance to demonstrate a quantitative, bottom-line impact when embarking on a software development or evolution project. Too few engineers and managers consider the full business context when making decisions. Many hard lessons in my 20 years of experience could have been avoided if I had the insights and techniques that this book provides. I expect Mr. Reifer's book to be a classic in the field. It is chockfull of practical methods with worked-out examples of making the software business case. Not only is it rigorous in it's quantitative approach, but the author's broad and seasoned perspective helps practitioners steer through the minefield of people, politics and organizations. I seriously believe we would have more successful software projects if all technical people took on such a balanced view.

This book is for anyone who wants to look good in an efficient fashion. To my mind that means knowing where to find good ideas, which you can reuse easily. This book is packed with examples that any software professional can take advantage of. The simple but complete explanation of the Goal Question Metrics approach is a fine example (page 36).For those of use without the benefits of an MBA it provides a solid basis to develop a business case that your boss will love in chapters 2 and 3.There are two books in my collection that I go back to again and again (Software Engineering Economics by Barry Boehm and Applied Software Measurement by Capers Jones. I have just added a third book to that list, Making the Software Business Case by Don Reifer.

How many of us in software engineering know what it takes to sell an idea to people with no software development or software project management experience? How many of use know how to evaluate whether it makes financial sense to continue with a project. The software engineering community is continuously working to improve methodologies, algorithms, tools, etc. and has long ignored what has to happen to get and keep great ideas or innovations funded. I recommend this book because it addresses this important need.As stated in the book "A business case shows that the idea being considered is a good one and that the numbers that surround it make financial sense." The book lays out creating a business case in an easy to read style. However, don't be fooled by the easy reading, the author writes of what, in my experience, really has to happen to make a successful business case and some of it takes hard work. If you follow Reifer's process (depending on the business case type) you will be able to see the financial advantages of your proposal. In addition to explaining the "in's and out's" of developing business cases, the book is loaded with references for further information. If you don't know how to develop a software engineering business case - get started with this book!