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158858Re: [XP] ROI of "Engineering Practices"

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  • Adam Sroka
    Dec 5, 2013
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      On Thu, Dec 5, 2013 at 11:18 AM, Steven Gordon <sgordonphd@...> wrote:
       

      Are the projects currently being coached showing reduction in defects and/or shorter cycle times?  If not, why not?


      Anecdotally, yes. 
       
      Does the organization even know what their defect rate and cycle times are in those same projects before coaching?


      I'm not on site and can't speak to this, but I believe much of the historical data is missing or suspect. In most transformations that I have been involved with the customer is either tracking the wrong things or nothing before a coach suggests it. 
       
      I originally interpreted the question as how does one compute the actual monetary value of defect and cycle time reduction in order to compare that with the cost of coaching.  Is that wrong, and management is questioning whether the improvements will happen, not whether the improvements are worth the cost?  Or is it both?


      Actually, my original question was how do we assign a monetary value to the risks that we mitigate by incorporating XP practices. 

      My intuitive sense is that:

      cost of a defect that does harm to the business >> loss of opportunity cost due to high cycle time >> cost of fixing defects found late in development or in production

      I have some sense about how to calculate the last two. However, because I suspect that mitigating the risk of disaster is significant I would like to know how/if others have calculated it. 

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