AN

INTRODUCTION
TO
SOFTWARE ECONOMICS
WHAT IS SOFTWARE ECONOMICS
Software economics is the study of how scarce project resources
are allocated for software projects. Software economics helps
software managers allocate those resources in the most efficient
manner. The process of counting function points, gathering data,
analyzing data is commonly referred to as Software Metrics, but
in reality is a branch of economics which should be called
Software Economics.
Most software cost models can be abstracted into a function of five basic
parameters:

Size

Process

Personnel

Environment

Required quality.
SIZE:
The size of the end product (in human-generated components), which is
typically quantified in terms of the number of source instructions AND
usually measured in SLOC,KLOC or the number of function points
required to develop the required functionality.

Function Points – a better metric earlier in project

LOC (SLOC, KLOC…) a better metric later in project
PROCESS

 Used to guide all activities.

Workers (roles), artifacts, activities…

Support heading toward target and eliminate non-essential / less important

activities

Process critical in determining software economics

Component-based development; application domain…iterative approach,

use-case driven…
PERSONNEL

 The capabilities of software engineering personnel, and particularly their

experience with the computer science issues and the applications domain
issues of the project.

 Motherhood: get the right people; good people; Can’t always do this.

 Much specialization nowadays. Some are terribly expensive.

 Emphasize ‘team’ and team responsibilities…Ability to work in a team.

ENVIRONMENT

 The tools / techniques / automated procedures used to support the

development effort.

Integrated tools; automated tools for modeling, testing, configuration,

managing change.
REQUIRED QUALITY

The functionality provided; performance, reliability, maintainability,

scalability, portability, user interface utility; usability…