1. CSE 8340 Advanced Topics on Software Engineering: Software Engineering Economics & Processes Course Overview
LiGuo Huang
Dept. of Computer Science and Engineering
Southern Methodist University
©SMU-CSE

2. Outline Course objectives Evolution of software engineering
Roadmap of software engineering economics
Software management learning objectives
What does a successful SW manager need to deal with?
What does a successful (software) manager need to do?
Enterprise Success Theorem
Enterprise Success Realization Theorem
Overview of VBSE Theory
Value-Based Software Engineering
Overview of Course
Programmatics, schedule, academic integrity
This Week’s Assignment
©SMU-CSE

3. Course Objectives Help you learn to be a successful software manager
Software technology, economic factors, human relations
For a career lasting through the 2040’s
Understand the fundamental principles underlying software management and economics
Analyze software management situations via case studies
Apply the principles and techniques to practical situations
©SMU-CSE

4. "Those who cannot remember the past are condemned to repeat it,"
– George Santayana
©SMU-CSE

5. Outline Course objectives Evolution of Software Engineering
Roadmap of software engineering economics
Software management learning objectives
What does a successful SW manager need to deal with?
What does a successful (software) manager need to do?
Enterprise Success Theorem
Enterprise Success Realization Theorem
Overview of VBSE Theory
Value-Based Software Engineering
Overview of Course
Programmatics, schedule, academic integrity
This Week’s Assignment
©SMU-CSE

6. Evolution of Software Engineering (1)
1950’s Thesis: Software Engineering Is Like Hardware Engineering
+ Don’t neglect the sciences
+ Look before you leap
Avoid using a rigorous sequential process
1960’s Antithesis: Software Crafting
+ Respect software’s differences
– Avoid cowboy programming
1970’s Synthesis and Antithesis: Formality and Waterfall Processes
+ Determine the system’s purpose
+ Quantitative methods
+ Eliminate errors early
– Avoid top-down development and reductionism
©SMU-CSE

7. Evolution of Software Engineering (2)
1980’s Synthesis: Productivity and Scalability
+ There are many roads to increased productivity
+ What’s good for products is good for process
Be skeptical about silver bullets or one-size-fits-all solutions
1990’s Antithesis: Concurrent vs. Sequential Processes
+ Time is money
+ Make software useful to people
– Be quick, but don’t hurry
©SMU-CSE

8. Evolution of Software Engineering (3)
2000’s Antithesis and Partial Synthesis: Agility and Value
+ If change is rapid, adaptability trumps repeatability
+ Consider and satisfy success-critical stakeholders’ value propositions
2010’s Antitheses and Partial Syntheses: Globalization and Systems of Systems
©SMU-CSE

9. Outline Course objectives Evolution of Software Engineering
Roadmap of software engineering economics
Software management learning objectives
What does a successful SW manager need to deal with?
What does a successful (software) manager need to do?
Enterprise Success Theorem
Enterprise Success Realization Theorem
Overview of VBSE Theory
Value-Based Software Engineering
Overview of Course
Programmatics, schedule, academic integrity
This Week’s Assignment
©SMU-CSE

10. Software Engineering Economics
Software is a critical component for enterprise value creation
Improve the value created by investments in software
Improve software design and engineering through
economic reasoning about product, process, program, portfolio and policy issues
Understand relationships between economic objectives, constraints, and conditions
Software engineering as a value-creating activity
connect technical decisions with enterprise-level value outcomes
©SMU-CSE

11. Sources of Technical-Value Mismatch
Lack adequate frameworks for modeling, measuring and analyzing the connections between technical properties/decisions and value creation
Software designers and engineers are not educated on reasoning about value creation
Inadequate design space within which software designers operate
set of technologies with which software is developed and used
organizational, regulatory, tax, market and other structures within which software is developed and used
©SMU-CSE

12. New Sources of “Value” Value of changes Value of timing
Value with uncertainties
Real options
Value of timing
Intel and AMD
Microsoft’s independent-feature-based architectural style and synchronize-and-stabilize process
Tradeoffs in multi-dimensional value spaces
©SMU-CSE

13. New Measures of “Value”
Monetary “value” and non-monetary “value”
Non-linear functions
Value under uncertainty
Decision (utility) theory provides a framework for decisions under uncertainty
Real-options framework compared with
Net Present Value (NPV)
Discounted Cash Flow (DCF)
Multi-objective decision-making
©SMU-CSE

14. Multi-stakeholder Satisfying
Each stakeholder has its own goals and measures of value
Conflicting interests in the distribution of gains
Awards and risks coexist
Integrate value considerations into complex, software-intensive development processes
WinWin Spiral Lifecycle Model
©SMU-CSE

15. Future Trends and Additional Challenges
COTS intensive software systems
Reason about both costs and benefits
Minimal cost strategies doesn’t necessarily optimize value
Example: RAD
Classic schedule estimation:
Question: How about value loss due to delay of time to market?
©SMU-CSE

16. Software Engineering Economics Roadmap
Product and process design for value creation
Understand better the links between technical design mechanisms (e.g., architecture), context, and value creation
Dynamic monitoring and control to better guide decision-makers through the design space
Modeling costs, benefits/value and quality
©SMU-CSE

17. Emerging Value-driven Design and Development Approaches
ICM: Incremental Commitment Model
MBASE/USC: Model Based (System) Architecting and Software Engineering approach
DMR/Thorp
Risk-based/Value-based testing
Value-based design
Value-based security
©SMU-CSE

18. Outline Course objectives Evolution of Software Engineering
Roadmap of software engineering economics
Software management learning objectives
What does a successful SW manager need to deal with?
What does a successful (software) manager need to do?
Enterprise Success Theorem
Enterprise Success Realization Theorem
Overview of VBSE Theory
Value-Based Software Engineering
Overview of Course
Programmatics, schedule, academic integrity
This Week’s Assignment
©SMU-CSE

19. What Does A Successful Software Manager Need to Deal With?
©SMU-CSE

20. What Do SW Managers Need to Deal With?
People: customers, users, architects, designers, programmers, testers, lawyers, venture capitalists, suppliers, politicians, …
Products: requirements, designs, code, documentation, plans, tools, data, facilities, equipment, …
Projects: proposals, presentations, contracts, deliverables, budgets, schedules, milestones, …
Resources: time, money, space, communications, skills, …
Technology: software, hardware, domain technology, COTS, OSS, …
Organizations and Cultures: top management, marketing, sales, development, finance, customer/user organizations, …
Changes in all of the above
©SMU-CSE

21. What Does A Successful Software Manager Need to Do?
©SMU-CSE

22. Software Management Guidelines
Eclectic combinations of advice
Management frameworks
Maturity models
People management theories: X, Y, Z
Enterprise Success Theorem: Theory W
Enterprise Success Realization Theorem
©SMU-CSE

23. Sorting Out Software Advice
Build It
twice
Thorough test planning
Do it top-down
Prove
everything
correct
Use disciplined reviews
Do it
outside-in
Programming
standards
Automated
aids
Independent test teams
Use walk-throughs
Chief
Programmer
teams
Measurable milestones
Early requirements baseline
Program Library
Involve
the user
Structured
Programming
Design verification
Configuration management
Project work authorizations
End-item acceptance plan
Unit development folders
©SMU-CSE

24. Koontz-O’Donnell Management Framework
Planning
Organizing
Staffing
Directing
Controlling
Purpose
Contribution to
goals
Commitment
Verifiability
Cost-Effectiveness
Precedence
Purpose
Unity of goals
Cost-
effectiveness
Span of
Management
Purpose
Contribution to
goals
Purpose
Harmony of goals
Purpose
Assurance of goals
Cost-effectiveness
Control responsibility
Motivation
Understanding of
goals
Reflection of goals
Selection
Top talent
Job matching
Career progression
Skills balance
Teamwork
Structure
Reflection of plans
Organizational
suitability
individuality
Delegation of
Authority
Unity of command
Parity of authority
Responsibility
Authority level
Absoluteness of
responsibility
Communication
Parity of information
Responsibility
Receptiveness
Integrity
Structure
Premises
WWWWWHHW
Synchronization
Recruiting
Reward
Openness
Commitment
Process
Standards
Critical-point
Exception
Flexibility
Timeliness
Action
Leadership
Identification
Empathy
Sustained initiative
Integrity
Team building
Management of time
Process
Limiting Factor
Flexibility
Navigational change
Performer
Participation
Division of Work
Form follows function
People’s strengths
Functional definition
Separation
Retention
Reinforcement
Team building
Phase out
Backup
©SMU-CSE

25. CMMI Process Areas Staged Representation
Level 5
Optimizing
Causal Analysis and Resolution
Organizational Innovation & Deployment
Level 4
Quantitatively Managed
Quantitative Project Management
Organizational Process Performance
Organizational Process Focus
Organizational Process Definition
Organizational Training
Integrated Project Management
Risk Management
Decision Analysis and Resolution
Requirements Development
Technical Solution
Product Integration
Verification
Validation
Level 3 Defined
Integrated Teaming
Organizational Environment
for Integration
Project Planning
Project Monitoring and Control
Configuration Management
Process & Product Quality Assurance
Supplier Agreement Management
Measurement and Analysis
Requirements Management
Level 2
Managed
Level 1 Performed
©SMU-CSE

26. Theory X and Theory Y* Theory X Theory Y
People inherently dislike work
They have to be coerced into working
They prefer being told what to do
Theory Y
People don’t inherently dislike work
People can exercise self-direction
Commitment to objectives depends on resulting rewards
People can learn to seek responsibility
Work creativity is widely distributed
People’s potential is only partially utilized
* D. McGregor, The Human Side of Enterprise, 1960.
©SMU-CSE

27. Theory Z: Japanese-Style Management
People work best toward goals which they have helped establish
Once people have bought into goals, you can trust them to perform
If people share a common set of values, they can develop workable project goals
©SMU-CSE

28. Theory W: Enterprise Success Theorem – And informal proof
Theorem: Your enterprise will succeed if and only if it makes winners of your success-critical stakeholders
Proof of “if”: Everyone that counts is a winner. Nobody significant is left to complain.
Proof of “only if”:
Nobody wants to lose. Prospective losers will refuse to participate, or will counterattack. The usual result is lose-lose.
©SMU-CSE

29. Win-lose Generally Becomes Lose-lose
Actually, nobody wins in these situations
©SMU-CSE

30. Enterprise Success Realization Theorem
Theorem: Your enterprise can realize
success if and only if
You identify and involve all of the success critical stakeholders (SCSHs)
Dependency theory
You determine how the SCSHs want to win
Utility theory
You help the SCSHs determine and commit to a win-win course of action and solution
Decision theory
You adaptively control the course of action to continue to realize a win-win solution
Control theory
©SMU-CSE

31. Outline Course objective Roadmap of software engineering economics
Help you learn to be a successful software manager
For a career lasting through the 2040’s.
Roadmap of software engineering economics
Software management learning objectives
What does a successful SW manager need to deal with?
What does a successful (software) manager need to do?
Enterprise Success Theorem
Enterprise Success Realization Theorem
Overview of VBSE Theory
Value-Based Software Engineering
Overview of Course
Programmatics, schedule, academic integrity
This Week’s Assignment
©SMU-CSE

32. VBSE Theory 4+1 Structure
©SMU-CSE

33. VBSE Component Theories
Theory W (Stakeholder win-win)
Enterprise Success Theorem, Win-Win Achievement Theorem
Dependency Theory (Product, process, people interdependencies)
Systems architecture/performance theory, costing and scheduling theory; organization theory
Utility Theory
Utility functions, bounded rationality, Maslow need hierarchy, multi-attribute utility theory
Decision Theory
Statistical decision theory, game theory, negotiation theory, theory of Justice
Control Theory
Observability, predictability, controllability, stability theory
©SMU-CSE

34. Initial VBSE Theory: 4+1 Process – With a great deal of concurrency and backtracking
©SMU-CSE

35. Outline Course objectives Evolution of Software Engineering
Roadmap of software engineering economics
Software management learning objectives
What does a successful SW manager need to deal with?
What does a successful (software) manager need to do?
Enterprise Success Theorem
Enterprise Success Realization Theorem
Overview of VBSE Theory
Value-Based Software Engineering
Overview of Course
Programmatics, schedule, academic integrity
This Week’s Assignment
©SMU-CSE

36. CSE8340 Overview COCOMO II & Extensions VBSE Theory, Practice
Planning & Control
COCOMO II
Microeconomics
Decision Theory
Business Case Analysis
People Management
VBSE Theory, Practice
VBSE Framework
WinWin Spiral
Risk Management
Agile and Discipline
MBASE; Model Clash
Incremental Commitment Model
COTS-based Process
©SMU-CSE

37. First Week’s Assignment
Today: Sign and turn in questionnaire and acknowledgement
©SMU-CSE

38. CSE8340 Questionnaire and Acknowledgement
Please fill out and return.
Name: _________________________________________________
Student ID #: ___________________________________________
Dept./Degree Program: __________________________________
Job, Employer: _________________________________________
Software Work Experience (years): _______________________
Phone, fax numbers: ____________________________________
Address: ________________________________________
Acknowledgement: I acknowledge the importance of SMU's academic integrity standards (with respect to plagiarism, referencing others' work, etc.), and agree to abide by them.
Signature: ______________________________________________
©SMU-CSE