Fool’s Gold of Software Value
I did a little searching since I feel the value in software has been lost. I think it got lost when this wave hit of having software and technology ‘just ’cause everyone else does.’ I think this is evident in the world of ‘what will the next social media add platform be’ that we currently live in. Don’t get me wrong. I love how inventing new add platforms has propelled technology and its use in our every day lives. I also believe there are a lot of maybe even more valuable applications of technology that are yet to develop.
I am curious how value is defined then. I found articles talking about the ROI of software in terms of the number of features. I have seen it defined based on how many FTEs it replaces. I read about it defined in terms of timesavings with an ensuing calculation. I have even observed the search for value lead to tangential and maybe not so value laden paths or pursuits. Some companies think that software development methodologies or management mantras will lead to the discovery of value. Maybe or maybe not, in and of themselves these will not create value, but they can help.
Thinking of the value of software in terms of ROI often leads to discussions about monetary value calculations or estimates. So then what? You only develop features that will deliver the most dollars? Your backlog can now simply be sorted in descending order to determine priority? Who sets the dollar value? Is it based on contract receipts or even more fun sales projections? Who qualifies or quantifies those? Let’s take another set of numbers, cost savings. Similar questions, but now how does a cost saving number ranking compared to a sales one? Are all numbers treated equally?
The number of features approach assumes that all features added to the software are valuable. While I appreciate the optimism in this thinking. Very rarely is it reality. I know it may inconceivable that any feature not have at least some minor value. My experience has shown me features with negative value so a minor value would be a success. Even teams with awesome backlog grooming and prioritization don’t always get it right. Some features are sure to add more value than others, so how do you rank and reconcile them? So even in the best of circumstances I can’t accept a feature count as a measure of software’s value.
How many FTEs does it replace? What does that mean? Do you fire the employees you no longer need? I once had a discussion with a coworker who was convinced that if we automate her very manual, mouse click job, she would be out of work. I could not convince her that there is other work for her to do and that she would not be rendered useless and shown the door. There was always plenty of work to do she could easily be moved to doing something else that may have even been a better career for her. Should this idea be so foreign or unbelievable?
Can value be defined in terms of timesavings? This one intertwines a couple of them. I’ve already talked about the monetary aspect. How do you quantify and qualify timesavings? It sounds like trying to measure this for value could lead to a complicated system of doing so. I would accept talking strictly in terms of, this feature saved x employees 1 hour per day a piece. Ok, now what, do you lay people off? I prefer the option of taking on more backlog items, pay off technical debt, you know constructive things, but how often is that done in this case?
Learning and building and selling the value in your software are individual pursuits. Companies don’t like to hear that because it doesn’t fit well into the cookie cutter profit mold they are pursuing. There isn’t a silver bullet one size fits all solution, but it doesn’t have to be mining for fool’s gold either. Excess capacity can be put to good use and even profitable use instead of discarded. Monetary savings in one area can be invested in another. Maybe you work for a company that needs no further investment. Haha. I want to get back on track in knowing what the value of software products is and correctly apply that value and stop chasing fool’s gold only to sell it as a precious metal.