Book Description:
Paperback: 208 pages
Publisher: Prentice Hall; 1 edition (October 18, 2003)
Language: English
ISBN-10: 0131407287
ISBN-13: 978-0131407282
Product Dimensions:
6.8 x 0.5 x 9 inches
Shipping Weight: 12 ounces (View shipping rates and policies)
Average Customer Review:
4.2 out of 5 stars See all reviews (17 customer reviews)
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Book Details:
Preface "Absolutely! You must write the book!" Such was the enthusiastic response of my manager, Stu Stern, Vice President of Sun Professional Services, to the idea of a book that would draw on the latest ideas in application development methodologies and apply them primarily for financial rather than technological benefit. For all our efforts and successes in creating development methodologies, only a few practitioners have realized the potential for using these techniques to maximize financial return. And yet financial return is usually the enduring metric of success in software development, at least in the commercial world. This book draws on several years of experience in winning competitive contracts for systems integration and application development projects. Although winning such deals is unquestionably about using innovation to outflank the competition, it's also about getting the money right. The price has to be within the customer's budget, the development cost has to be low enough for the bidder to make a good margin, and the margin has to be justified against the risk. There's nothing new in those ideas; they are true for any competitive procurement. What is different about software development is that we're only just learning to understand value creation. The most common view is that software development incurs risks and costs. Despite this, even the most hardened, risk-averse development house would recognize that software carries implicit value. If that value were not there, no one would pay to have software developed. Unfortunately, all of the creative and business energies of the development organization are normally focused on reducing cost and risk. This is as true in the bid phase as in the implementation phase. The developer applies the latest software methodologies, institutes the latest project management strategies, and constantly evolves risk mitigation techniques, primarily to do just one thing: control cost. Ironically, most of this activity is invisible to the customer, and the customer is rarely a part of the conversations that lead to the critical project decisions in these areas. In the 1990s, I worked on a large competitive procurement for a Southeast Asian government. The nature of the project was such that differentiation through technical innovation was very limited because the evaluation parameters were just too tightly tied down. We needed a different way to win. It eventually occurred to me that if we optimized the time at which value was returned to the customer, instead of concentrating only on controlling risk and cost, we might be able to use that approach to present a uniquely differentiated value proposition. By reanalyzing and recategorizing the customer's requirements in terms of units of value, we found that we could indeed adjust the development sequence so that we delivered real value faster than if we'd optimized for total cost. At the same time we could amortize the cost into more manageable portions, each part of which had accountability for its returns. The impact for the customer was dramatic. The approach was able to significantly reduce the borrowing line and interest payments, facilitate the earlier release of the product to market, and create a much cleaner modularity from a financial perspective. The merchant banks needed to recompute the project finance numbers, the developers needed to understand why we were apparently reordering the customer's requirements, and the customers, of course, needed to see, understand, and compute for themselves the benefits of this approach. Very unusual conversations took place during this time. Developers became involved in conversations with bankers about return on investment. Project managers traded spreadsheets with financiers and investors. Analysts measured architectures in terms of "time to value" rather than functional efficiency. At the end of the process, instead of two presentations to the customer, one on the technology and one on the finances, we gave just one presentation covering both, with all sides of the team represented. We won the day, and the business! Such was the genesis of incrementally funded software development, which later gave birth to the incremental funding methodology IFM outlined in this book. Naturally, the idea took many months to bring to fruition. The gestation of any idea is an unpredictable process. It's rarely clear exactly what will emerge until it does. Although the idea of incrementally funded software had shown some early signs of success, it needed to be more comprehensively proven. I was privileged to take over the management of Sun Microsystems' New York "Java Center" in late 1999. The Java Center is Sun's global Java Consultancy practice, and provides architecture and design expertise to customers creating solutions in Java and J2EE. It was quickly apparent that by writing the embryonic IFM concepts into proposals for application development work, we were able to capture and successfully deliver several very large engagements, particularly with finance industry clients. However we learned that incremental funding and the early release of value are critically dependent on the nature of the requirements and on their ability to be reconfigured for value optimization. Requirements engineering is a discipline in itself, and I was fortunate to know an expert in this field. My co-author is Jane Cleland-Huang, assistant professor of Computer Science at DePaul University in Chicago. I first met Jane when we were both 16 and growing up in England. We had a common interest in supporting aid organizations for the Third World and met at a 24-hour sponsored "starve-in" in the small town of Wimborne Minster in Dorset, England. At that time I had just learned to write Fortran IV programs on punched cards and run them through the batch terminal at the local technical college after school. Jane's interest in programming developed later when she began working for an international relief organization. In the meantime, we went to the same church, had several friends in common, and began a lifelong friendship that survived university, relief work assignments in different countries, and, eventually, Jane's departure to live in Chicago. Some time later while I was living and working in San Francisco, I flew to Chicago and invited Jane to meet me at the O'Hare Airport Hilton to propose that we write this book together. To my great delight, she agreed. Her background and experience are pivotal to this book in every sense.
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