Software code flexibility profitability in light of technology life cycle

Sagi Akron, Roy Gelbard

Research output: Contribution to journalArticlepeer-review

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 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.

Original languageEnglish
Pages (from-to)723-746
Number of pages24
JournalOperational Research
Volume20
Issue number2
DOIs
StatePublished - 1 Jun 2020

Bibliographical note

Publisher Copyright:
© 2017, Springer-Verlag GmbH Germany.

Keywords

  • Financial profitability decision making
  • Flexible manufacturing systems
  • Reusable software code development
  • Technology life cycle

ASJC Scopus subject areas

  • Numerical Analysis
  • Modeling and Simulation
  • Strategy and Management
  • Statistics, Probability and Uncertainty
  • Management Science and Operations Research
  • Computational Theory and Mathematics
  • Management of Technology and Innovation

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