[Managing Software Development Life Cycle with Activity Based Costing]

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ACKNOWLEDGEMENT

I would take this opportunity to thank my research supervisor, family and friends for their support and guidance without which this research would not have been possible

DECLARATION

I, [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University

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ABSTRACT

Systems development lifecycle (SDLC) is a promising set of technologies designed to move software creation from its current, labor-intensive, craft-like approach to a more modern, reuse-centered style. However, a lesson learned from previous radical software process innovations is that a strong technology alone is generally insufficient for successful adoption. In order for gains to be realized from such technologies the management practices surrounding the implementation of the new technology must also change. It is with this view that we propose the adoption of a complementary management approach called activity based costing (ABC) to allow organizations to properly account for and recognize the gains from a SDLC approach. ABC enables a management environment where appropriate incentives are created for the development and reuse of software components. Data from a large software vendor who has experience with ABC in a traditional software development environment are presented, along with a chart of accounts for a modern, SDLC model.

CHAPTER I: INTRODUCTION

Background

The nature of software development is undergoing a dramatic change, one that strikes at the core of how the industry will build systems development lifecycle in the coming decade. Traditionally, large systems have been custom-built, using a 'waterfall' style approach to development. Under this approach, a project begins with a requirements or needs analysis, then proceeds linearly through stages of design, coding, testing, documentation, training and implementation. This custom-crafted approach to software is very expensive, as each project develops a custom product. This, despite the fact that many applications contain numerous opportunities to rely on work products created for previous systems, including not only program code, but analysis and design artifacts as well. While this issue has been widely recognized, until recently modern software technologies made re-use possible on only an ad hoc or local basis. Large-scale component reuse was typically not accomplished. (Wasmund 2003 595-611)

In response to this, a new approach has been proposed for the development of these systems. “What can we do to solve the software crisis?”: this question is always present when we read an article about the software production mechanisms or when we hear a conference on software development issues. But is it true? Is this the right question?

Software industry is still young, but it has undergone an incredible growth. Nowadays computers mark our daily life and software applications support us in most of our activities. Probably no one other product has had a diffusion comparable to that of computers in the technology age. But then, where is the software crisis? The “software crisis” ...