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Business Value of Agile Methods: Using Return on Investment
 

Business Value of Agile Methods: Using Return on Investment

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Provides a brief introduction to agile methods, an overview of popular agile methods, and a brief survey of the benefits of agile methods as reported by major industry studies. Also provides a suite ...

Provides a brief introduction to agile methods, an overview of popular agile methods, and a brief survey of the benefits of agile methods as reported by major industry studies. Also provides a suite of basic metrics useful for quantifying the business value of agile methods. Discusses parametric models derived from industry data, a methodology for estimating the return on investment (ROI) of agile methods, and a comparison of the costs and benefits of 11 major agile and traditional methods.

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    Business Value of Agile Methods: Using Return on Investment Business Value of Agile Methods: Using Return on Investment Presentation Transcript

    • Business Value of Agile Methods Using Return on Investment Dr. David F. Rico, PMP, CSM
    • Agenda Introduction Sources of Business Value Surveys of Business Value Measures of Business Value Models of Business Value Estimation of Business Value Comparison of Business Value Summary of Business Value 2
    • Author DoD contractor with 25+ years of IT experience B.S. Comp. Sci., M.S. Soft. Eng., D.M. Info. Tech. Large NASA & DoD programs (U.S., Japan, Europe) * Published five textbooks and over 15 articles on various topics in return on investment, information technology, agile methods, etc. 3
    • Purpose Provide an overview of the business value of Agile Methods using return on investment: Business value is an approach for estimating the tangible and intangible worth of organizational assets Business value is an appraisal of intellectual assets such as knowledge, experience, and skills Business value is a technique for determining the complete worth of an investment to an enterprise Business value is a method of determining the health and well-being of a firm in the long-run Business value includes employee, customer, supplier, alliance, management, and societal value 4
    • What is Agility? A-gil-i-ty (ə-'ji-lə-tē) Quickness, lightness, and ease of movement; nimbleness Agility is the ability to create and respond to change in order to profit in a turbulent business environment Agility is reprioritizing for maneuverability because of shifting requirements, technology, and knowledge Agility is a very fast response to changes in customer requirements through intensive customer interaction Agility is the use of adaptability and evolutionary delivery to promote rapid customer responsiveness Agility is a better way of developing products using collaboration, teamwork, iterations, and flexibility 5
    • What are Agile Methods? ‘Adaptable’ software development methodologies ‘Human-centric’ method for creating business value ‘Alternative’ to large document-based methodologies Agile Manifesto. (2001). Manifesto for agile software development. Retrieved September 3, 2008, from http://www.agilemanifesto.org 6
    • Essence of Agile Methods High degree of customer & developer interaction Highly-skilled teams producing frequent iterations Right-sized, just-enough, and just-in-time process Highsmith, J. A. (2002). Agile software development ecosystems. Boston, MA: Addison-Wesley. 7
    • Why use Agile Methods? Adaptability to changing market/customer needs Better cost efficiencies and fastest time-to-market Improved quality, satisfaction, and project success Agile Manifesto. (2001). Manifesto for agile software development. Retrieved September 3, 2008, from http://www.agilemanifesto.org 8
    • Antecedents of Agile Methods Rooted in management evolution from early 1900s Evolved from software methods from 1950s/1960s Spinoffs of NPD/RAD approaches from the 1980s Rico, D. F., Sayani, H. H., & Field, R. F. (2008). History of computers, electronic commerce, and agile methods. In M. V. Zelkowitz (Ed.), Advances in computers: Emerging technologies, Vol. 73. San Diego, CA: Elsevier. 9
    • Agenda Introduction Sources of Business Value Surveys of Business Value Measures of Business Value Models of Business Value Estimation of Business Value Comparison of Business Value Summary of Business Value 10
    • Types of Agile Methods Crystal Methods and Scrum 1st Agile Methods Extreme Programming swept the globe by 2002 Scrum/Extreme Programming hybrids are popular Year Method Author Firm Major Features Crystal Use Cases, Domain Models, Frequent Delivery, 1991 Cockburn IBM Methods Reflection Workshops, Risk Management Backlogs (Feature Lists), Daily Scrums, Sprints 1993 Scrum Sutherland Easel (Iterations), Retrospectives (Post Mortems) Dynamic User Involvement, Time Boxes and Prototypes 1993 Systems Millington DSDM Development (Iterations), Testing and Quality Assurance Feature-Driven Feature Lists (Customer Needs), Domain Model 1997 De Luca Nebulon Development (Object Orientation), Inspection (Peer Review) Extreme Release Planning, Onsite Customers, Iterations, 1998 Beck Chrysler Programming Pair Programming, Test-Driven Development Highsmith, J. A. (2002). Agile software development ecosystems. Boston, MA: Addison-Wesley. 11
    • Crystal Methods Created by Alistair Cockburn in 1991 Has 14 practices, 10 roles, and 25 products Scalable family of techniques for critical systems Cockburn, A. (2002). Agile software development. Boston, MA: Addison-Wesley. 12
    • Scrum Created by Jeff Sutherland at Easel in 1993 Has 5 practices, 3 roles, 5 products, rules, etc. Uses EVM to burn down backlog in 30-day iterations Schwaber, K., & Beedle, M. (2001). Agile software development with scrum. Upper Saddle River, NJ: Prentice-Hall. 13
    • Dynamic Systems Develop. Created by group of British firms in 1993 15 practices, 12 roles, and 23 work products Non-proprietary RAD approach from early 1990s Stapleton, J. (1997). DSDM: A framework for business centered development. Harlow, England: Addison-Wesley. 14
    • Feature Driven Development Created by Jeff De Luca at Nebulon in 1997 Has 8 practices, 14 roles, and 16 work products Uses object-oriented design and code inspections Palmer, S. R., & Felsing, J. M. (2002). A practical guide to feature driven development. Upper Saddle River, NJ: Prentice-Hall. 15
    • Extreme Programming Created by Kent Beck at Chrysler in 1998 Has 28 practices, 7 roles, and 7 work products Popularized pair programming and test-driven dev. Beck, K. (2000). Extreme programming explained: Embrace change. Reading, MA: Addison-Wesley. 16
    • Extreme Programming (cont’d) RELEASE PLANNING — Best Practice Created by Kent Beck at Chrysler in 1998 Used for managing both XP and Scrum projects Light, flexible, and adaptable project mgt. framework Beck, K., & Fowler, M. (2004). Planning extreme programming. Upper Saddle River, NJ: Addison-Wesley. 17
    • Extreme Programming (cont’d) PAIR PROGRAMMING — Best Practice Term coined by Jim Coplien in 1995 Consists of two side-by-side programmers Highly-effective group problem-solving technique Williams, L., & Kessler, R. (2002). Pair programming illuminated. Boston, MA: Pearson Education. 18
    • Extreme Programming (cont’d) TEST-DRIVEN DEV. — Best Practice Term coined by Kent Beck in 2003 Consists of writing unit tests before coding Subject to automated testing/continuous integration Beck, K. (2003). Test-driven development: By example. Boston, MA: Addison-Wesley. 19
    • Extreme Programming (cont’d) REFACTORING — Best Practice Term coined by William Opdyke in 1990 Improve readability, maintainability, and quality Software is continuously rewritten for every iteration Fowler, M. (1999). Refactoring: Improving the design of existing code. Boston, MA. Addison-Wesley. 20
    • Agenda Introduction Sources of Business Value Surveys of Business Value Measures of Business Value Models of Business Value Estimation of Business Value Comparison of Business Value Summary of Business Value 21
    • Surveys of Agile Methods Numerous surveys of Agile Methods since 2003 AmbySoft and Version One collect annual data Generally include both hard and soft benefits Rico, D. F. (2008). What is the return-on-investment of agile methods? Retrieved February 3, 2009, from http://davidfrico.com/rico08a.pdf 22
    • Shine Technologies Survey of 131 international respondents Extreme Programming (58%) and Scrum (8%) 85% of respondents were experts in Agile Methods Cost Satisfaction Quality Productivity 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Improvement Johnson, M. (2003). Agile methodologies: Survey results. Victoria, Australia: Shine Technologies. 23
    • Agile Journal Survey of 400 international respondents Extreme programming (28%) and Scrum (20%) 80% using Agile Methods to deliver maximum value Cost Alignment Quality Time to Market 0% 10% 20% 30% 40% 50% Improvement Barnett, L. (2006). And the agile survey says. Agile Journal, 1(1). 24
    • Microsoft Survey of 492 Microsoft respondents Scrum (65%) and Extreme Programming (5%) 65% using Agile Methods in virtual distributed teams Productivity Satisfaction Quality Flexibility Time to Market Communication 0% 10% 20% 30% 40% 50% 60% 70% Improvement Begel, A., & Nagappan, N. (2007). Usage and perceptions of agile software development in an industrial context: An exploratory study. Proceedings of the First International Symposium on Empirical Software Engineering and Measurement, Madrid, Spain, 255-264. 25
    • UMUC Survey of 250 international respondents 70% of respondents using Agile Methods 83% of were from small-to-medium sized firms Cost Quality Cycle Time Productivity Satisfaction 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Improvement Rico, D. F., Sayani, H. H., Stewart, J. J., & Field, R. F. (2007). A model for measuring agile methods and website quality. TickIT International, 9(3), 3-15. 26
    • AmbySoft Survey of 642 international respondents 69% of firms had adopted an Agile Method 62% were from firms with less than 1,000 people Virtual Success Cost Quality Project Success Satisfaction Productivity 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Improvement Ambler, S. W. (2008). Agile adoption survey. Retrieved October 17, 2008, from http://www.ambysoft.com/downloads/surveys/AgileAdoption2008.ppt 27
    • IT Agile Survey of 207 respondents in Germany Scrum (21%) and Extreme Programming (14%) 97% of respondents are satisfied with Agile Methods Quality Project Status Productivity Learning on the Job Job Satisfaction Flexibility 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Improvement Wolf, H., & Roock, A. (2008). Agile becomes mainstream: Results of an Online Survey. Object Spektrum, 15(3), 10-13. 28
    • Version One Survey of 3,061 respondents from 80 countries Scrum (49%), Scrum/XP (22%), and XP (8%) 68% from small firms and 57% distributed Cost Maintainability Quality Productivity Project Visibility Cycle Time 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Improvement Version One. (2008). The state of agile development: Third Annual Survey. Alpharetta, GA: Author. 29
    • Agenda Introduction Sources of Business Value Surveys of Business Value Measures of Business Value Models of Business Value Estimation of Business Value Comparison of Business Value Summary of Business Value 30
    • Measures of Business Value A major principle of Agile Methods is creating value ROI is the measure of value within Agile Methods There are seven closely related ROI measures Metric Definition Formula Costs n Sum of Costs Total amount of money spent ∑ Cost i =1 i Benefits n Sum of Benefits Total amount of money gained ∑ Benefit i =1 i B/CR Ratio of benefits to costs Benefits Benefit to Cost Ratio Costs ROI Benefits − Costs Ratio of adjusted benefits to costs × 100% Return on Investment Costs NPV Years Benefits i Net Present Value Discounted cash flows ∑ (1 + Discount Rate) i =1 Years − Costs 0 BEP Point when benefits exceed costs New Costs Breakeven Point Old Costs New Costs − 1 ROA Value gained from strategic delay N (d1 ) × Benefits − N (d 2 ) × Costs × e − Rate × Years Real Options Analysis d1 = [ln(Benefits ÷ Costs) + (Rate + 0.5 × Risk2) × Years] ÷ Risk × √ Years, d2 = d1 − Risk × √ Years Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? TickIT International, 10(4), 9-18. 31
    • Costs Total amount of money spent on Agile Methods Includes training, coaching, automated tools, etc. Minimally, includes the dev. effort of Agile Methods n ∑ Cost i =1 i Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? TickIT International, 10(4), 9-18. 32
    • Benefits Total amount of money gained from Agile Methods Includes economic benefit from using new system Minimally, includes maintenance rework savings n ∑ Benefit i =1 i Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? TickIT International, 10(4), 9-18. 33
    • Benefit to Cost Ratio Ratio of total benefits to total costs of Agile Methods Includes development, maintenance, and business Minimally, benefits should be larger than all costs Benefits Costs Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? TickIT International, 10(4), 9-18. 34
    • Return on Investment Ratio of adjusted benefits to costs of Agile Methods Benefits are adjusted downward using total costs Minimally, benefits should be larger than costs Benefits − Costs × 100% Costs Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? TickIT International, 10(4), 9-18. 35
    • Net Present Value Discounted benefits of using Agile Methods Future benefits are discounted due to inflation Minimally, future benefits should exceed all costs Years Benefitsi ∑ (1+ Discount Rate)Years − Costs0 i =1 Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? TickIT International, 10(4), 9-18. 36
    • Breakeven Point Point when benefits exceed costs of Agile Methods Point where slope of benefits and costs intersect Minimally, old costs should exceed new costs New Costs Old Costs New Costs − 1 Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? TickIT International, 10(4), 9-18. 37
    • Real Options Analysis Iterative benefits gained from using Agile Methods Future benefits are increased because of risks Minimally, benefits should exceed costs N (d1 ) × Benefits − N (d 2 ) × Costs × e − Rate × Years d1 = [ln(Benefits ÷ Costs) + (Rate + 0.5 × Risk2) × Years] ÷ Risk × √ Years d2 = d1 − Risk × √ Years Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? TickIT International, 10(4), 9-18. 38
    • Agenda Introduction Sources of Business Value Surveys of Business Value Models of Business Value Measures of Business Value Estimation of Business Value Comparison of Business Value Summary of Business Value 39
    • Software Lifecycle Costs 1:10:100 is a classical ratio of dev. to maint. hours Defects have negative multiplicative effect on cost A conservative and contemporary ratio is 1:6:30 Relative Cost to Fix Error Boehm, B. W. (1981). Software engineering economics. Englewood Cliffs, NJ: Prentice-Hall. Highsmith, J. A. (2002). Agile software development ecosystems. Boston, MA: Addison-Wesley. 40
    • Software Cost Models Cost estimation models still in use today Used to estimate effort of Traditional Methods Adjusted average of 5,088 used for ROI estimation Benediktsson, O., & Dalcher, D. (2005). Estimating size in incremental software development projects. Journal of Engineering Manufacture, 152(6), 253-259. 41
    • Total Lifecycle Costs 0.51 hours/line of code for Traditional Methods 10% defect inject rate (1,000 defects/10 KLOC) 67% of defects in test (33% in maintenance) Rico, D. F. (2004). ROI of software process improvement: Metrics for project managers and software engineers. Boca Raton, FL: J. Ross Publishing. In, H. P., et al. (2006). A quality-based cost estimation model for the product line life cycle. Communications of the ACM, 49(12), 85-88. McCann, B. (2007). The relative cost of interchanging, adding, or dropping quality practices. Crosstalk, 20(6), 25-28. 42
    • Agile Productivity Studies Productivity data found in 26 Agile Methods studies Studies conducted from 2002 to the present time Average productivity 21.2374 LOC per hour Abrahamsson 2003 XP Case Study 19.2550 Abrahamsson & Koskela 2004 XP Case Study 16.9000 Back, Hirkman, & Milovanov 2004 XP Experiment 8.0000 Cohn 2008 Scrum Case Study 5.9050 Jones 2008 Scrum Case Study 5.7400 Sutherland 2006 Scrum Case Study 4.6858 Average 21.2374 Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? TickIT International, 10(4), 9-18. 43
    • Agile Productivity Models Based on 13 studies of Extreme Programming (XP) Also based on 7 studies of pair programming (PP) “Pair programming” had highest productivity Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? TickIT International, 10(4), 9-18. 44
    • Agile Quality Studies Defect density found in 21 studies of Agile Methods Studies conducted from 2002 to the present time Average quality 1.7972 defects per KLOC Abrahamsson 2003 XP Case Study 2.1450 Abrahamsson & Koskela 2004 XP Case Study 1.4300 Back, Hirkman, & Milovanov 2004 XP Experiment 0.7000 Cohn 2008 Scrum Case Study 2.9000 Jones 2008 Scrum Case Study 8.5000 Schatz & Abdelshafi 2005 Scrum Case Study 0.4350 Average 1.7972 Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? TickIT International, 10(4), 9-18. 45
    • Quality Models Based on 10 studies of Extreme Programming (XP) Also based on 6 studies of pair programming (PP) “Extreme Programming” had the highest quality Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? TickIT International, 10(4), 9-18. 46
    • Agenda Introduction Sources of Business Value Surveys of Business Value Measures of Business Value Models of Business Value Estimation of Business Value Comparison of Business Value Summary of Business Value 47
    • Agile Lifecycle Costs Costs based on productivity and quality models Development costs based on LOC ÷ productivity rate Maintenance costs based on defects × KLOC × MH Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? TickIT International, 10(4), 9-18. 48
    • Agile Lifecycle Benefits Benefits based on total traditional less agile costs Traditional costs based LOC × dev. + maint. effort Traditional costs credited testing effort applied No. Method Agile Lifecycle Benefit Models Benefits 1. XP (10,000 3.51 – 3,651.48 4.47) 100 – $208,069 $1,667,079 2. TDD (10,000 3.51 – 3,651.48 4.47) 100 – $167,109 $1,708,039 3. PP (10,000 3.51 – 3,651.48 4.47) 100 – $160,459 $1,714,690 4. Scrum (10,000 3.51 – 3,651.48 4.47) 100 – $302,052 $1,573,096 5. Agile (10,000 3.51 – 3,651.48 4.47) 100 – $180,002 $1,695,146 Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? TickIT International, 10(4), 9-18. 49
    • Extreme Programming Costs based on avg. productivity and quality Productivity moderated from 16.1575 to 5.3858 Costs were $208,069, benefits were $1,667,079 ∑ 5 i =1 Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? TickIT International, 10(4), 9-18. 50
    • Test Driven Development Costs based on avg. productivity and quality Productivity moderated from 29.2800 to 9.7600 Costs were $167,109, benefits were $1,708,039 ∑ 5 i =1 Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? TickIT International, 10(4), 9-18. 51
    • Pair Programming Costs based on avg. productivity and quality Productivity moderated from 33.4044 to 11.135 Costs were $160,459, benefits were $1,714,690 ∑ 5 i =1 Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? TickIT International, 10(4), 9-18. 52
    • Scrum Costs based on avg. productivity and quality Productivity data remained the same at 5.4436 Costs were $302,052, benefits were $1,573,096 ∑ 5 i =1 Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? TickIT International, 10(4), 9-18. 53
    • Agile Methods Costs based on avg. productivity and quality Productivity data resulted in average of 7.9311 Costs were $180,002, benefits were $1,695,146 ∑ 5 i =1 Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? TickIT International, 10(4), 9-18. 54
    • Agenda Introduction Sources of Business Value Surveys of Business Value Measures of Business Value Models of Business Value Estimation of Business Value Comparison of Business Value Summary of Business Value 55
    • Data for Agile Methods Agile Methods were ranked based on ROI Agile Methods with high quality had lower ROI Agile Methods with high productivity had high ROI Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? Retrieved September 3, 2008, from http://davidfrico.com/agile-benefits.xls 56
    • ROI of Agile Methods Agile Methods were ordered based on ROI Agile Methods had a high ROI value of 969% Agile Methods yielded an average ROI of 842% Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? Retrieved September 3, 2008, from http://davidfrico.com/agile-benefits.xls 57
    • Data for Traditional Methods Traditional Methods were ranked based on ROI Methods with good cost and quality had higher ROI Agile Methods had better ROI than heaviest methods Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? Retrieved September 3, 2008, from http://davidfrico.com/agile-benefits.xls 58
    • ROI of Traditional Methods Traditional Methods were ordered using ROI Traditional Methods had high ROI value of 1,562% Agile Methods had better ROI than heaviest methods Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? Retrieved September 3, 2008, from http://davidfrico.com/agile-benefits.xls 59
    • Data for All Methods Software methods were ranked based on ROI Methods with good cost and quality had best ROI Best Agile and Traditional Methods had similar ROI Type Method Costs Benefits B/CR ROI NPV BEP ROA Traditional PSPsm $105,600 $1,755,148 17:1 1,562% $1,414,174 $945 $1,672,907 Traditional TSPsm $148,400 $1,706,648 12:1 1,050% $1,329,379 $5,760 $1,591,127 Traditional Inspections $82,073 $897,499 11:1 994% $695,067 $51,677 $833,681 Agile PP $160,459 $1,714,690 11:1 969% $1,324,283 $5,919 $1,590,034 Agile TDD $167,109 $1,708,039 10:1 922% $1,311,874 $6,430 $1,578,575 Agile Agile $180,002 $1,695,146 9:1 842% $1,287,817 $7,483 $1,556,997 Agile XP $208,069 $1,667,079 8:1 701% $1,235,446 $10,064 $1,513,332 Agile Scrum $302,052 $1,573,096 5:1 421% $1,060,084 $21,682 $1,389,810 Traditional SW-CMM® $311,433 $1,153,099 4:1 270% $687,030 $153,182 $998,013 Traditional ISO 9001 $173,000 $566,844 3:1 228% $317,828 $1,196,206 $486,750 Traditional CMMI® $1,108,233 $1,153,099 1:1 4% -$109,770 $545,099 $891,412 Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? Retrieved September 3, 2008, from http://davidfrico.com/agile-benefits.xls 60
    • ROI of All Methods Software methods were ordered by ROI Agile Methods had a high ROI value of 969% Traditional Methods had high ROI value of 1,562% Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? Retrieved September 3, 2008, from http://davidfrico.com/agile-benefits.xls 61
    • Unadjusted ROI of All Methods Are data based on unrealistic laboratory conditions? Are productivity data from lab studies optimistic? Are total lifecycle costs closer to 1:10:100? Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? Retrieved September 3, 2008, from http://davidfrico.com/agile-benefits.xls 62
    • Agenda Introduction Sources of Business Value Surveys of Business Value Measures of Business Value Models of Business Value Estimation of Business Value Comparison of Business Value Summary of Business Value 63
    • Benefit Summary Agile (138 pt.) and Traditional Methods (99 pt.) Agile Methods fare better in all benefits categories Agile Methods 459% better than Traditional Methods Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? TickIT International, 10(4), 9-18. 64
    • Cost of Quality Apply traditional reliability and quality theory Defects are inexpensive to remove early in cycle Late bug removal has negative, multiplicative effect Inspection Cost (57X PSP) Ad Hoc (326X) PSP Cost (326X lower than Ad Hoc) Test Cost (138X PSP) Software Defects PSP Unit Component System Customer Analysis Design Code Test Test Test Use Rico, D. F. (2000). Using cost benefit analyses to develop software process improvement (SPI) strategies. Rome, NY: DACS. 65
    • Real Options NPV models losses of Traditional Methods Real options model profits from Agile Methods Agile Methods incur less initial risk and higher ROI Probability Probability Fichman, R. G., Keil, M., & Tiwana, A. (2005). Beyond valuation: Options thinking in IT project management. California Management Review, 47(2), 74-96. 66
    • Agile vs. Traditional Metrics Agile Methods are a fundamentally new paradigm Agile Methods are “not” lighter Traditional Methods They should not be viewed through a Traditional lens Rico, D. F. (2009). Metrics for agile methods. Retrieved February 7, 2009, from http://davidfrico.com/agile-metrics.pdf 67
    • New Book Guide to Agile Methods for business leaders Communicates business value of Agile Methods Rosetta stone to Agile Methods for Traditional folks THE BUSINESS VALUE Table of Contents OF AGILE METHODS 1. Introduction 2. Values of Agile Methods Maximizing ROI with Right-Sized, Just-Enough, 3. History of Agile Methods and Just-in-Time Processes and Documentation 4. Antecedents of Agile Methods 5. Types of Agile Methods 6. Practices of Agile Methods 7. Agile Project Management 8. Agile Software Engineering 9. Agile Support Processes 10. Agile Tools and Technologies 11. Comparison of Agile Methods 12. Agile Metrics and Models 13. Costs of Agile Methods 14. Benefits of Agile Methods 15. ROI of Agile Methods DR. DAVID F. RICO, DR. HASAN H. SAYANI 16. NPV of Agile Methods AND DR. SAYA SONE 17. Real Options of Agile Methods Forward by Dr. Jeffrey V. Sutherland 18. Conclusion * Rosetta stone to the business value and culture of Agile Methods for executives, managers, and thought leaders in the field of software methods. 68
    • References Rico, D. F. (2000). Using cost benefit analyses to develop software process improvement (SPI) strategies. Rome, NY: DACS. Rico, D. F. (2002). How to Estimate ROI for Inspections, PSP, TSP, SW-CMM, ISO 9001, and CMMI. Software Tech News, 5(4), 23-31. Rico, D. F. (2002). The Return on investment in quality. TickIT International, 4(4), 13-18. Rico, D. F. (2004). ROI of software process improvement: Metrics for project managers and software engineers. Boca Raton, FL: J. Ross Publishing. Rico, D. F. (2005). Practical metrics and models for return on investment. TickIT International, 7(2), 10-16. Rico, D. F. (2006). A framework for measuring the ROI of enterprise architecture. International Journal of End User Computing, 18(2), 1-12. Rico, D. F. (2007). Optimizing the ROI of enterprise architecture using real options. In S. Clarke (Ed.), End user computing challenges and technologies: Emerging tools and applications. Hershey, PA: Information Science Reference. Rico, D. F. (2008). What is the ROI of agile vs. traditional methods? An analysis of extreme programming, test-driven development, pair programming, and scrum (using real options). TickIT International, 10(4), 9-18. Solingen, R. A., & Rico, D. F. (2006). Calculating software process improvement’s return on investment. In M. V. Zelkowitz (Ed.), Advances in computers: Quality software development, Vol. 66 (pp. 1-41). San Diego, CA: Elsevier. 69
    • Contact Information Website: http://davidfrico.com Biography: http://www.linkedin.com/in/davidfrico Capabilities: http://davidfrico.com/rico-capability.pdf 70