QW2001 Paper 7M2 Prof. Warren Harrison, Dr. David Raffo & Dr. John Settle (Portland State University) Process Improvement As A Capital Investment

Key Points

• Economics of Process Improvement
• Making the Business Case
• Return on Investment

Presentation Abstract

Firms invest in process improvements in order to benefit from increased productivity sometime in the future. However, there are a large number of alternate investment opportunities, while at the same time, the available budget is often constrained. To make things even more complicated, each alternative may result in different cost savings or income over different periods of time with different levels of risk. Thus, we're faced with the question: "in which opportunity should we invest?" We present a well-accepted method of budgeting for capital expenditures from the financial community, and apply it to software process improvements.

About the Author

Warren Harrison is Professor of Computer Science at Portland State University. His research interests include both software engineering and internet technologies. Professor Harrison's software engineering research includes return on investment for process improvements, software quality assurance, software measurement, and empirical studies of software engineering. He is an active member of the software engineering research community, serving as Editor-in-Chief of the Software Quality Journal and co-EIC with Vic Basili and Lionel Briand of Empirical Software Engineering, as well as being involved with the organizing committees of numerous international conferences and workshops each year. His PhD is from Oregon State University.

Dr. Raffo completed his Ph.D. at Carnegie Mellon University in 1995. His research involves developing a theoretical framework and associated quantitative techniques to predict the impact of potential process changes on cost, project schedule, and software quality. These concepts and theories have been field tested at leading software development organizations.

John W. Settle has a B.A. from Pomona College and a B.S., M.B.A. and Ph.D. from University of Washington. He is also a Chartered Financial Analyst (CFA). Dr. Settle teaches corporate finance, investments and portfolio management. He has done research in the areas of mergers and valuation issues. His current research interests are in investor psychology, market returns, and applied corporate financial concepts.