Predicting the ROI of Change

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a company uses software simulation to see if that claim is true, this simulation can determine if the tool is right for the company. PSIM can determine if the tool will provide a sufficient benefit even if it does not perform as well as promised–or if the tool is only half as effective as the original claim. At that point, a company can decide if the purchase of the tool will still provide a return on the investment in training, cost, and time.

Any company can receive benefits by using PSIM, but as with any tool, it is important to know how to use PSIM in order to gain the maximum benefit. The key to using PSIM is to follow a good methodology while creating the model. Most organizations find that working with people who have experience creating process simulation models is a highly effective way to get started. After all, a company needs individuals with experience, and individuals that can transfer that experience to a specific project.

Using PSIM allows a company to evaluate their work flows and quality assurance activities–down to a detailed level if necessary. For instance, by using PSIM, company can evaluate the impact of sending a portion of their product through very specific testing processes while other portions of the product receive standard testing or quality assurance. PSIM then predicts the overall impact on project performance. PSIM also allows a company to implement other "what if" analyses in order to view different scenarios–including best-case, worst-case, and expected case scenarios.

Two Real World Company Scenarios
There are many examples of organizations in the aerospace, automotive, telecommunication and medical software and systems industries that benefitted substantially from the use of PSIM. The following two examples from Dr. Raffo’s experience reveal the potential power of applying PSIM.

In the first situation, applying simulation models to evaluate the software development process saved an organization from a potential disaster and quality assurance risk. "If an aerospace organization that we worked with had applied the automated code analysis tool as it originally intended, a major quality exposure would have occurred. Instead," Dr. Raffo points out, "We were able to identify specific project conditions and specific places in the process where the tool could be applied and actually give it value."

In a second case, Dr. Raffo worked with a company that adopted a requirement analysis tool. Everyone at this organization believed that t adopting this tool would provide a great benefit–and all of these individuals were correct. However, when Dr. Raffo and his team performed the analysis, they were able to show the managers that if the tool was placed at an entirely different point in the process, the organization could save an additional $400,000 to $500,000 per large-scale project.

The Benefits of PSIM Implementation
Organizations can gain many benefits when they utilize PSIM before implementing considerable business changes.

  • PSIM improves bottom-line profits–and it can be used to estimate project costs from the bottom up
  • PSIM can reveal how to streamline processes within an organization
  • PSIM provides higher quality assurance
  • PSIM reduces cycle times
  • PSIM lowers the risk of making a costly error
  • PSIM provides a deeper understanding of the many factors that influence success for complex software development projects.

For instance, PSIM allows an organization to evaluate strategic issues such as optimizing its quality assurance strategy–as well as its validation and verification strategy. By adding specific quality assurance activities, a company can pinpoint where, how much, and what portions of the product should be inspected or tested. This situation enables a company to be very specific about its quality assurance

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