|Total Cost of
Ownership for software
Total Cost of Ownership (TCO)
includes the direct and indirect costs over the lifecycle of an asset.
The majority of resources in many software manufacturer organizations
are consumed by software maintenance. Studies indicate that maintenance
costs can be two or four times the initial costs of the system and this
proportion is increasing. The high fraction of life-cycle costs
expended on maintenance stresses the fact that the maintainability of a
software product is
important, especially when it is first developed and released.
Releasing software that is difficult to maintain might lead to
unexpectedly high post-release costs of corrective maintenance ("technical debt"), and adaptive and perfective maintenance on
software that will soon no longer be able to evolve.
is a metaphor referring to the eventual consequences of poor system
design, software architecture or software development within a code
base. Put differently, it is a metaphor for the quality of software.
The debt can be thought of as work that still needs to be done before a
particular job can be considered complete or proper. If the debt is not
repaid, then it will keep on accumulating interest, making it hard to
implement changes later on. Just like financial debt, these uncompleted
changes incur interest on top of interest, making harder and harder to
implement changes to the code base: the effort to fix defects or to add
new functionality increases exponentially.
The fact is
all companies will accrue technical debt, as it is
unavoidable on any development project. There is relentless pressure on
development teams to deliver new innovation to the market faster than
ever before and this tends to lead to a continuing debt accumulation.
After releasing the software, there is usually not enough time to ‘pay
back’ the technical debt that the business accrued. There is only time
to fix the critical defects (pay back the interest) as there is a new
business requirement to be met. If the debt grows large enough,
eventually the company will spend more on servicing its debt
(maintenance) than it invests in increasing the value of its other
assets (new development).
AG is currently investigating existing models related to the
total cost of ownership covering the entire software life-cycle, at the
same time integrating own experiences from research and consulting
assignments in this area.
results will be published in a book, autumn 2015. Organizations and
individuals willing to contribute, are requested to contact us.
See also Linkedin.