Software Metrics: Best Practices for Successful IT Management

by Andrew Hiles FBCI, MBCS

I have had the pleasure of working with Paul Goodman, on and off, for almost ten years. My first contact with Paul was with a client in the Netherlands, working together on what was then Europe's biggest ISO 9000 project for Information Technology. Paul was helping the client with Software Performance Metrics while I was developing Service Level Agreements (SLA) — and groping for effective performance metrics for a software development SLA. As a past developer myself, I had an idea but was not sure whether or not it would be viable. With Paul's input (and a particularly brave Applications Development Manager!) the result was highly successful.

It is this pragmatic approach, coupled with a huge depth of practical experience, that yields to Paul the commanding heights of the science of software performance measurement.

The topic is important enough. IT software projects are high risk activities.

For over ten years, the sad statistics on IT project failure have barely changed. Survey after survey shows that over half of all IT projects fail (especially large projects) and most projects are delivered over time, over budget. Accurate time and cost forecasting, based on sound performance measurement metrics, could reduce the number of project failures by helping to create more realistic cost / benefit cases. And better software quality would help, too.

Hugh W. Ryan, in an article for Outlook Journal, summarized research that showed:

• Only 8 percent of applications projects costing between $6 million and $10 million succeed.

• Among all IT development projects, only 16% are delivered to acceptable cost, time and quality.

• Cost overruns from 100% to 200 % are common in software projects.

• Cost overruns for IT projects have been estimated at $59 billion in the United States alone.

• Another study puts the figure at $100 billion.

• IT workers spend more than 34% of their time just fixing software bugs

The PMI Fact Book is even more pessimistic: it says the United States spends $2.3 trillion a year on projects and that much of that money is wasted because a majority of projects fail. Also:

• Standish Group International found that only 28% of information technology projects are completed successfully.

• Of 1,027 projects surveyed by the British Computer Society, the Association of Project Managers and the Institute of Management concluded that only 130 (12.7%) were successful.

• Only 2% of the successful projects were development projects, yet over 50% of the projects reviewed were development projects.

• A PriceWaterhouseCoopers survey found that, in the UK alone, over $1 billion a year was being wasted through poor software quality.

• Cap Gemini Ernst & Young reports that 70% of Customer Relationship Management (CRM) strategies fail.

• META Group reports 90% of enterprises cannot show a positive return on CRM.

• Peppers & Rogers reports that nearly 80% of CRM projects fail to show a positive return.

• Gartner research predicts that over 50% of CRM strategies will continue to fail.

• Only around half of Enterprise Resource Planning systems are deemed successful.

• According to the Cranfield School of Management, the more ambitious the return on investment for the project cited in the business case, the more lacking the project plan is likely to be.

Imagine the results if less than half of all passenger aircraft flying arrived at their destination!

Badly estimated software projects can waste serious money: money that could otherwise be invested in mission achievement, new product development and creating a competitive edge. Poor software quality can lead to poor quality — or even dangerous — products. It can cause public relations and marketing disasters, damage brand reputation and market share. While use of effective software metrics is not the total answer, it is certainly a crucial part of getting to grips with software development.

Paul Goodman's book makes a valuable contribution to IT Development Project success. It is comprehensive, lucid and packed with illustrations and practical examples. This makes it as accessible to the non-specialist as it is to the software guru. I commend it, not just to software developers, but also to:

• CIOs

• IT Project Accountants

• IT Development Project Accountants

• IT Development Project Managers

• CFOs

• Risk Managers

• IT Service Delivery Managers and all those responsible for development, implementation and management of Service Level Agreements

• Disaster Recovery, Business Continuity Managers

• Business managers playing a role in the initiation, authorization and development of IT software projects.

andrew Hiles, FBCI, MBCSDirector, Kingswell InternationalOxford, United KingdomJuly, 2004