Unraveling the Mystery of Software Development Success
An analysis of productivity and success rates finds software vendors can improve the quality and cost efficiency of their product output by improving the quality of their requirements input.
By Joe Marasco, Ravenflow
Feb. 10, 2006
Is our software becoming more or less expensive to develop?
This is a difficult question. The applications we develop continue to become richer and more sophisticated in their scope and functionality. The software projects we now undertake are much more complex than software projects were ten or twenty years ago. There is no doubt that we expect more from software today than ever before.
In a sense, we have a "chicken and egg" situation here. Are we doing more daunting things today because we can? That is, are we attempting more ambitious projects because we have better methodologies and tools that enable their conception and execution? Or, have the methodologies and tools just kept pace with the increasing challenges and degree of difficulty demanded by the external world?
When projects are successful, we have productivity levels that are much better than ever before. The mountains we are climbing are higher, and we are climbing them with proportionately fewer resources than in the past. That is the bright side of software development: better systems and higher productivity.
The dark side of the equation is project success rates. Why does the needle on success rates move so slowly? It is as though all the advances in methodologies and tools have helped us build more ambitious systems, yet there is some other factor that is keeping us from being successful more of the time. Perhaps there is something in the product development approach of the past several decades that is missing the point.
A Look at the Data
The Gartner Group reported that there were $3.7 billion spent worldwide in 2004 on application development tools. This was up over 5% from that spent in 2003; it is therefore not unreasonable to assume that in 2006 somewhere in the neighborhood of $4 billion will be spent. Note that this does not include money spent on methodology, consulting, or other development expenses.
But what about the software development project success rate? Dr. Philippe Kruchten, professor of software engineering at the University of British Columbia, has provided me with the following data from the Standish Group's CHAOS reports:
The data show that software developers are making progress on the success rate front, but slowly. The improvement is about 1.7 percentage points a year, and appears to be linear based on this small sample of data. If the current improvement rate continues, we won't achieve a 50% success rate until the year 2014.
Software is the engine of our economy, at the root of almost everything we do. Our success rate has been creeping up in recent years, but one thing is sure: there has been NO breakthrough. Unless you consider almost "doubling" the success rate in nine years a breakthrough; this effect is the result of a very low baseline for comparison. We may still be in the business of harvesting low-hanging fruit.
The CEO's Problem
Take the CEO's point of view for a moment. Assume that 75 percent of the $4 billion in software tools investment spent in 2006 is disbursed by the Fortune 1000 companies. Simple division then tells us that:
On average, each Fortune 1000 company spends $3 million on software development tools each year, and sees less than a two percentage point improvement in project success rates.
The CEO must spend that $3 million just to keep up. While that money does work to increase productivity and allow the creation of more competitive applications, it is doing very little to raise the chances of success on the next set of projects.
Today, we estimate that roughly one project in three will be successful; 35% is a good number. If all goes well, it will take us another eight years to get to 50%.
Most CEOs either are concerned about this, or should be.
This is a difficult question. The applications we develop continue to become richer and more sophisticated in their scope and functionality. The software projects we now undertake are much more complex than software projects were ten or twenty years ago. There is no doubt that we expect more from software today than ever before.
In a sense, we have a "chicken and egg" situation here. Are we doing more daunting things today because we can? That is, are we attempting more ambitious projects because we have better methodologies and tools that enable their conception and execution? Or, have the methodologies and tools just kept pace with the increasing challenges and degree of difficulty demanded by the external world?
When projects are successful, we have productivity levels that are much better than ever before. The mountains we are climbing are higher, and we are climbing them with proportionately fewer resources than in the past. That is the bright side of software development: better systems and higher productivity.
The dark side of the equation is project success rates. Why does the needle on success rates move so slowly? It is as though all the advances in methodologies and tools have helped us build more ambitious systems, yet there is some other factor that is keeping us from being successful more of the time. Perhaps there is something in the product development approach of the past several decades that is missing the point.
A Look at the Data
The Gartner Group reported that there were $3.7 billion spent worldwide in 2004 on application development tools. This was up over 5% from that spent in 2003; it is therefore not unreasonable to assume that in 2006 somewhere in the neighborhood of $4 billion will be spent. Note that this does not include money spent on methodology, consulting, or other development expenses.
But what about the software development project success rate? Dr. Philippe Kruchten, professor of software engineering at the University of British Columbia, has provided me with the following data from the Standish Group's CHAOS reports:
The data show that software developers are making progress on the success rate front, but slowly. The improvement is about 1.7 percentage points a year, and appears to be linear based on this small sample of data. If the current improvement rate continues, we won't achieve a 50% success rate until the year 2014.
Software is the engine of our economy, at the root of almost everything we do. Our success rate has been creeping up in recent years, but one thing is sure: there has been NO breakthrough. Unless you consider almost "doubling" the success rate in nine years a breakthrough; this effect is the result of a very low baseline for comparison. We may still be in the business of harvesting low-hanging fruit.
The CEO's Problem
Take the CEO's point of view for a moment. Assume that 75 percent of the $4 billion in software tools investment spent in 2006 is disbursed by the Fortune 1000 companies. Simple division then tells us that:
On average, each Fortune 1000 company spends $3 million on software development tools each year, and sees less than a two percentage point improvement in project success rates.
The CEO must spend that $3 million just to keep up. While that money does work to increase productivity and allow the creation of more competitive applications, it is doing very little to raise the chances of success on the next set of projects.
Today, we estimate that roughly one project in three will be successful; 35% is a good number. If all goes well, it will take us another eight years to get to 50%.
Most CEOs either are concerned about this, or should be.
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