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Lifecycle

A Developers' Guide to ROI

<< Rule 5

RULE 6: Employ a mix of permanent and contract staff on a project.

From an accounting perspective, employing permanent developers creates a runtime liability on a project. The result is that a percentage of projects cannot be undertaken because they require the same ROI at development time as runtime. Unless the CEO is looking to sell the company, a large head-count is a liability.

A majority of projects do not make a clear separation between development and runtime on a project because that option is not available to them. For large corporates, permanent members of staff can be moved from one project to another in the same manner as contractors. Using contract staff allows the project to expand during development and slim down at runtime to create the best ROI for employers.

There is no doubt that developers are increasingly getting involved in project control, and it is important to understand what ROI is and how it affects them.

Viewing software as a revenue generating or cost cutting tool may lead developers to change the way they approach some aspects of development.


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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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