Group 9

Assignment 2
Benefit
 Benefits of Software Engineering Economics (SEE)
perspectives
SEE: Business goals => Software technical decisions

What is the benefit?

• Provides a balanced view of solutions
• Provides evaluation frameworks and
techniques
 Example
Engineering approach SEE approach
“We should use these algorithms “We should use these algorithms

• because they run like the wind • because they provide people with more

• or because they are revolution” benefits in relation to their costs than do

other approaches”
Challenges
 Objectives of SEE

Provide a better quantitative understanding of how software people make

decisions in resource-limited situations
 The challenges of Software Engineering Economics

Challenges:
Cost increase
Data un…
Roles of SEE leaders
Chairperson
The leader of the corporation
Responsible for running the board smoothly and
effectively
•Duties:
• Maintaining communication with chief
executives
• Formulating the company's business strategy
• Representing management and the board to
the
general public and shareholders
• Maintaining corporate integrity
Chief Executive
Officer (CEO)
The top manager
Responsible for the corporation's entire
operations
•Duties:
• Reports directly to the chair and the board
of directors
• Implement board decisions and initiatives
• Maintain the smooth operation of the firm
with senior management's assistance
Chief Operations
Officer (COO)
Responsible for the corporation's
operations
Duties:
• Looks after issues related to
marketing, sales, production, and
personnel
• Looks after day-to-day activities while
providing feedback to the CEO
• The COO is often referred to as a
senior vice president
Chief Financial
Officer (CFO)
The CFO is responsible for:
•Analyzing and reviewing financial data

•Reporting financial performance

•Preparing budgets

•Monitoring expenditures and costs

 Knowledge requirement

• Fundamentals of software engineering economics (proposals, cash flow, the time-

value of money, planning horizons, inflation, depreciation, replacement and retirement
decisions)
• Not for-profit decision-making (cost-benefit analysis, optimization analysis)
• Estimation
• Economic risk and uncertainty (estimation techniques, decisions under risk and
uncertainty)
• Multiple attribute decision making (value and measurement scales, compensatory and
non-compensatory techniques)
Some research approaches
 Cost-Benefit Analysis
Cost-benefit analysis is a general method that is often used in
engineering. It is an appropriate tool for optimizing the expected
economic value of a design

COST BENEFITS
• Direct costs Direct costs
• Indirect costs  • Higher revenue and sales
• Intangible costs • Intangible benefits
• Opportunity costs • Competitive advantage
• Cost of potential risks • Market share gained
 Cost modeling

Quantities Cost Estimates

Prices
 Cost estimation

One of the most challenging tasks in project management

The software estimation process includes:

• Estimating the size of the product
• Estimating the effort required
• Developing preliminary project schedules
• Estimating overall cost of the project
 Some types of cost models

• COCOMO model
• SEER-SEM model
• PRICE-S
• SLIM
• COPMO model
• Function point analysis (FPA)
Thanks for watching