Abstract
Component-based software development 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 component-based 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, component-based model.
Similar content being viewed by others
References
R.D. Banker, R.J. Kauffman, C. Wright and D. Zweig, Automating output size and reuse metrics in a repository-based computer-aided software engineering (CASE) environment, IEEE Transactions on Software Engineering 20 (1994).
J.M. Bieman and S. Karunanithi, Measurement of language-supported reuse in object-oriented and object-based software, Journal of Systems and Software 30 (1995) 271-293.
G. Caldiera and V.R. Basili, Identifying and qualifying reusable software components, IEEE Computer 24 (1991) 61-70.
G. Cokins, Activity Based Cost Management: Making it Work (McGraw Hill, 1996).
B. J. Cox, Planning the software industrial revolution, IEEE Software 7 (1990) 25-33.
M. A. Cusumano, Shifting economies: From craft production to flexible systems and software factories, Research Policy 21 (1992) 453-480.
G. DeSanctis and M.S. Poole, Capturing the complexity in advanced technology use: Adaptive structuration theory, Organization Science 5 (1994) 121-147.
T.L. Estrin, Is ABC suitable for your company? Management Accounting 75 (1994) 40-45.
D. Fafchamps, Organizational factors and reuse, IEEE Software 11 (1994) 31-41.
R.G. Fichman and C.F. Kemerer, Object technology and reuse: Lessons from early adopters, IEEE Computer 30 (1997) 47-59.
W. Frakes and C. Terry, Software reuse: Metrics and models, ACM Computing Surveys 28 (1996) 425-435.
W.B. Frakes and S. Isoda, Success factors of systematic reuse 11 (1994) 14-19.
J.E. Gaffney Jr. and T.A. Durek, Software reuse - key to enhanced productivity: some quantitative models, Information and Software Technology 31 (1989) 258-267.
A. Goldberg and K. Rubin, S, Reuse process models, in: Succeeding with Objects (Decision Frameworks for Project Management), eds. A. Goldberg and K. Rubin (Addison-Wesley, 1995).
M.L. Griss, Software reuse: From library to factory, IBM Systems Journal 32 (1993) 548-566.
R.S. Kaplan, Measures for Manufacturing Excellence (HBS Press, 1990).
R.S. Kaplan and R. Cooper, Cost & Effect (HBS Press, 1998).
C.F. Kemerer, Reliability of function points measurement: A field experiment, Communications of the ACM 36 (1993) 85-97.
Y. Kim and E.A. Stohr, Software reuse: Survey and research directions, Journal of Management Information Systems 14 (1998)
C.W. Krueger, Software reuse, ACM Computing Surveys 24 (1992) 131-183.
B. Meyer, Reusability: The case for object-oriented design, IEEE Software (1987) 50-64.
H. Mili, F. Mili and A. Mili, Reusing software: Issues and research directions, IEEE Transactions on Software Engineering 21 (1995) 528-562.
J.A. Ness and T.G. Cucuzza, Tapping the full potential of ABC, Harvard Business Review 73 (1995) 130-138.
S.L. Pfleeger and T.B. Bollinger, The economics of reuse: New approaches to modeling and assessing cost, Information and Software Technology 36 (1994) 475-484.
J.S. Poulin, J. Caruso and D. Hancock, The business case for software reuse, IBM Systems Journal 32 (1993) 567-594.
J.S. Poulin, Populating software repositories: Incentives and domain-specific software, Journal of Systems Software 30 (1995) 187-199.
P.B. Turney, Common Cents, Cost Technology (1991).
M. Wasmund, Implementing Critical Success Factors in software reuse, IBM Systems Journal 32 (1993) 595-611.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Fichman, R.G., Kemerer, C.F. Activity Based Costing for Component-Based Software Development. Information Technology and Management 3, 137–160 (2002). https://doi.org/10.1023/A:1013121011308
Issue Date:
DOI: https://doi.org/10.1023/A:1013121011308