Software Economics Boot Camp

Steve TockeyConstrux Senior Fellow

This course teaches you the essential concepts and techniques that will help you make technical decisions that positively impact the all-important bottom line.

10 Hours of Content
16 Lectures
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Course Details

  • Course Description

    Companies are in business to maximize the return on their investment. Unfortunately, most software professionals lack the skills to evaluate the business impacts of the technical choices they make – which can lead to waste in time, money, and personnel. Grounded in engineering economics and business decision making, this seminar teaches you the essential concepts and techniques that will help you make technical decisions that positively impact the all-important bottom line. 2-day seminar

    This seminar is taught by Steve Tockey and is based on his book, Return on Software

    Certification Information

    10 PDU’s
    PMI PDU Reporting Instructions


    You’ll learn:

    • Fundamentals of for-profit business decisions
    • The time value of money
    • How to compare cash-flow streams
    • Methods for developing mutually exclusive alternatives
    • Techniques for evaluating decisions based on profit

    Who Should Attend

    This class is intended for practicing software professionals who are (or will be) involved in making significant technical and managerial decisions. This may include project managers, product managers, software architects, technical leads, designers, developers, QA managers, QA leads, and testers.

  • Course Details

    Introduction and Foundations

    • Business on purpose
    • Harsh realities
    • Seminar goals
    • Roadmap

    Fundamentals of Business Decisions

    • Business decision-making process
    • Selection criteria
    • Proposal
    • Cash-flow instance
    • Cash-flow stream
    • Cash-flow diagram
    • Developing cash-flow streams

    Interest: the Time Value of Money

    • Time is money
    • Interest
    • Naming conventions in interest formulas
      • Simple interest
      • Compound interest
      • Compound interest formulas

    Comparing Cash-Flow Streams

    • Simple comparison of two proposals
    • Equivalence
    • Bases for comparison
      • Present worth
      • Future worth
      • Annual equivalent
      • Internal rate of return
      • (Discounted) payback period
    • Project balance

    Developing Mutually Exclusive Alternatives

    • Independent proposals
    • Dependent proposals
      • Co-dependent proposals
      • Mutual exclusive proposals
      • Contingent proposals
    • Developing mutually exclusive alternatives
    • “Do-nothing” alternative
    • Cash-flow streams for alternatives

    For-profit Decision Making

    • Minimum Attractive Rate of Return
    • Basic for-profit decision process
    • Example for-profit decision
    • Rank on rate of return

    Allowing for Inaccuracy in Estimates

    • Knowledge drives accuracy
    • Common ways to allow for inaccuracy
      • Increase MARR
      • Shorten planning horizon
    • Better ways to allow for inaccuracy:
      • Use ranges of estimates
      • Sensitivity analysis
      • Delay final decisions

    Multiple Attribute Decisions

    • Introducing multiple attribute decisions
    • Different kinds of “value”
    • Measurement scales
    • Techniques for multiple attribute decisions
    • Additive weighting

  • Steve Tockey

    Construx Senior Fellow

    Steve Tockey is the Principal Consultant at Construx Software. During more than three and a half decades in the software industry, he has worked as a programmer, analyst, designer and researcher for organizations that include Lawrence Livermore National Laboratory, The Boeing Company and Rockwell Collins, Inc.

    At Construx, Steve applies his deep experience in object-oriented development, model-based requirements & design, software engineering economics, development process, project management, estimation, and software quality to help a wide variety of clients apply best practices throughout development and maintenance.

    Steve has a Master’s of Software Engineering from Seattle University and a B.A. in Computer Science from the University of California, Berkeley. He is a Certified Software Development Professional (CSDP), and chairs the CSDP Certification Committee of the IEEE Computer Society. Steve has been an adjunct professor in the Master of Software Engineering program at Seattle University, and is the author of Return on Software, a guide for companies that want to maximize the return on their software investment.


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