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Software code flexibility profitability in light of technology life cycle

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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.

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Authors and Affiliations

  1. Department of Business Administration, Faculty of Management, University of Haifa, Mt. Carmel, 3498838, Haifa, Israel

    Sagi Akron

  2. Information Systems Program, Graduate School of Business Administration, Bar Ilan University, 52900, Ramat-Gan, Israel

    Roy Gelbard

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  1. Sagi Akron
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  2. Roy Gelbard
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Correspondence to Sagi Akron.

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Akron, S., Gelbard, R. Software code flexibility profitability in light of technology life cycle. Oper Res Int J 20, 723–746 (2020). https://doi.org/10.1007/s12351-017-0350-5

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