A Developers' Guide to ROI
<< Rule 1
RULE 2: Prioritise functionality against ROI not perceived priority by users.
Often, users value priority based on what makes their lives easier or what they think will
attract a client's attention. What makes users' lives easier in the short term is often what will
cut costs but not increase revenue, and what will attract clients' attention is what will
increase revenue.
Without a clear business model, ease of use features may be added to
revenue driven projects and attractive features may be added to cost cutting projects.
During the development phase there are no profits, and generally speaking the shorter the
development phase the less capital is invested and the sooner profits are realised. In fact
it's an inverse relationship. If a project goes live earlier then costs are reduced and revenue
is increased.
Remember accountants work in quarters (3 months), so that's the timescale
you should also be working to. Delivering in these timescales will give the accountant
something to feel confident about, and hopefully confident about increasing your budget.
>> RULE 3: Always try to deliver the biggest revenue creating item within a 3 month period.
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Message Index: good points Keith Ray keithray at mac dot com
The Messages: good points Interesting thing mentioned on
http://www.martinfowler.com/articles/xp2002.html
- all 50 states have to implement a child-welfare tracking system, giving us the opportunity to see the "same" system implemented 50 times.
In Florida, a team of 100 people expected to deliver their implementation of this system in 8 years [starting 1990], though it is now to expected to deliver after 15 years [2005]. The budget is of course around $140 million over the original estimate of $32.
In Minnesota, a team of 10 people implemented their system in less than 2 years [starting 1999], using 10 people. Total cost $1.1 million.
These systems have the same federal requirements, but Minnesota probably focused on the "essential" requirements.
quote:
The comparison is a startling illustration of Chet Hendrickson's statement that "inside every large system there's a small system trying to get out". Keith Ray keithray at mac dot com
Tue Jul 09 01:10:12 BST 2002
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