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Software Code Flexibility Profitability in Light of Technology Life Cycle

Authors:
Sagi Akron at University of Haifa
Sagi Akron
Roy Gelbard at Bar Ilan University
Roy Gelbard
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Abstract and Figures

This paper analyzes the crucial flexibility management facets of software code development, namely, reusable software code. Maximizing a reusable code level represents a normative engineering rationale of the highest adaptability for the code, which utterly generates future costs savings. However, given the finite life cycle of the technology, the optimal managerial financial-economic decision might not coincide with the pure engineering facet, which evolves from the reusable code’s tradeoff between initial investment and future project savings. The cost–benefit considerations of optimal software flexibility are converted into technology-based cyclical discounted cash flows. The study provides software development project managers with a powerful decision support tool to assess pro-engineering profitability of flexible code development. Numerical simulations on a set of literature-derived parameter values justify a pure reusable strategy in only 4.2% of the cases. Finally, the model illustrates the opportunity to adapt and optimize organizational structure as a substitute for software flexibility strategy.
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ORIGINAL PAPER
Software code flexibility profitability in light
of technology life cycle
Sagi Akron
1
•Roy Gelbard
2
Received: 29 November 2016 / Revised: 12 July 2017 / Accepted: 4 October 2017 /
Published online: 10 October 2017
Springer-Verlag GmbH Germany 2017
Abstract This paper analyzes the crucial flexibility management facets of software
code development, namely, reusable software code. Maximizing a reusable code
level represents a normative engineering rationale of the highest adaptability for the
code, which utterly generates future costs savings. However, given the finite life
cycle of the technology, the optimal managerial financial-economic decision might
not coincide with the pure engineering facet, which evolves from the reusable
code’s tradeoff between initial investment and future project savings. The cost–
benefit considerations of optimal software flexibility are converted into technology-
based cyclical discounted cash flows. The study provides software development
project managers with a powerful decision support tool to assess pro-engineering
profitability of flexible code development. Numerical simulations on a set of lit-
erature-derived parameter values justify a pure reusable strategy in only 4.2% of the
cases. Finally, the model illustrates the opportunity to adapt and optimize organi-
zational structure as a substitute for software flexibility strategy.
Keywords Flexible manufacturing systems Reusable software code
development Financial profitability decision making Technology
life cycle
&Sagi Akron
sagiakron@univ.haifa.ac.il; sagiakron@gsb.haifa.ac.il
Roy Gelbard
gelbardr@mail.biu.ac.il;
http://www.biu.ac.il/faculty/gelbard/
1
Department of Business Administration, Faculty of Management, University of Haifa,
Mt. Carmel, 3498838 Haifa, Israel
2
Information Systems Program, Graduate School of Business Administration,
Bar Ilan University, 52900 Ramat-Gan, Israel
123
Oper Res Int J (2020) 20:723–746
DOI 10.1007/s12351-017-0350-5
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
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