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Criteria For Determining The Business Value Of Software

Determining the value of applications has been an imprecise science. A standard way to measure their value is the baseline needed to actually determine business value. 

For software vendors, value has been presented as the difference between the cost of developing custom software and the price of the commercial software. This method is based on labor-intensive, time-consuming, and expensive legacy IT, which has resulted in software pricing based on numbers of users and other criteria.

The past 20 years has seen research into moving from effort-based metrics for application value into one that would serve as a world-wide standard for business and real-time software. Rather than effort, this standard is based on user functionality, reducing software to a functional size measurement.

Functional Size Measurement for Applications

Functional size is based upon user interactions with an application. Basically, for each screen, webpage, and report an application produces, a calculation of functional size is made based on data objects and actions used. Adding them up determines the application’s functional size.

Here's more: The ISO standard on functional size measurement

Productivity of Application Development

Use of functional size units, or FSM (functional size measurement) function points, has become the basis for studies of legacy IT application development. To determine application development productivity, the application’s functional size is divided by the effort, in person-months, used to develop the application.

Here's more: Productivity based on functional size measurement

Costs of Application Development

Studies determining the development productivity for a completed application divided the application cost by the application’s functional size called an FSM function point. This results in a cost per FSM function point. Studies InfoNovus researched found the the United States cost per FSM function point to be $1,000.

Functional size methods, when used, have typically been used to estimate the effort and cost for developing a new application.

InfoNovus uses them as the foundation for Instant IT®’s business value.

How Instant IT® Determines Application Functional Size, Productivity, and Cost

InfoNovus uses an International Standards Organization method for determining the functional size of applications. Productivity and costs are based upon independent studies and InfoNovus experience using Instant IT®.

ISO/IEC 14143-1:2007 defines the concepts of functional size measurement, for which approaches have been developed by several organizations. These include the COSMIC method (ISO/IEC 19761), the IFPUG method (ISO/IEC 20926), the MkII FPA method (ISO/IEC 20968), and the NESMA (ISO/IEC 24570) methods. 

InfoNovus uses the COSMIC method, providing an application’s functional size in COSMIC function points.

Here's more: COSMIC Function Points

InfoNovus approached the issue of quantifying productivity in two ways. First, a benchmark for legacy IT had to be established because no one wanted to redevelop an application from scratch. Studies have been done showing a best-case productivity range of 10 – 15 COSMIC function points. InfoNovus then took an actual business specification and used Instant IT® to generate an application.

This was the result – Instant IT® automation delivered a 10,000% improvement:

Here's more: A functional size measurement study

Costs for IT application development vary, which has driven IT outsourcing. The legacy IT cost InfoNovus uses is $1,000 per function point. For annual maintenance costs, $250 per function point, based on a rule of thumb that sustainment costs are 25% of the initial cost of the application, per year. InfoNovus Instant IT® fees are based on COSMIC function point measurement of the business functionality of business designs and applications.

This is the result – Instant IT® automation delivered a 60% reduction in application costs:

Here's more: A study of functional size measurement costs

Instant IT® Eliminates Legacy IT Obstacles

Every year the Society for Information Management (SIM) performs a study of IT trends. Based on the most recent study, InfoNovus Instant IT® addresses eight of the top 10 IT management concerns, as shown here:

 

Here's more: The complete 2019 SIM IT Trends study

The InfoNovus Difference

InfoNovus supports a company's uniqueness. Companies use Instant IT® Business Design to specify how their companies operate, regardless of how unique their products, services, organization, and/or customers are, with the computer-generated applications and analytics they need to run their businesses.

InfoNovus provides customer companies with several distinct benefits:

  • Speed to market – Instant applications mean that the business can begin a new way of operating as soon as the design is ready, with no delay due to IT.
  • Immediate business benefits – Instant applications mean that benefits resulting from a new way of operating begin immediately.
  • Consistent data and rules – With InfoNovus, inconsistent data and inconsistently applied business rules are a thing of the past.
  • Management, governance, and control – InfoNovus gives customers management, governance, and control over Instant IT® business processes, data, rules, applications, analytics, and operations.
  • Pricing based on an ISO standard – IT automation also changes how to charge fees for application software: all Instant IT® fees are based on an ISO measurement of the business functionality of business designs and their applications, not the number of labor effort hours, users, transactions, CPUs, or other factors.
  • Lower application TCO – InfoNovus’s automation and pricing can lower the total cost of ownership for business application software by 60% or more.
At InfoNovus, we help our customers get the applications and analytics they need for their transformed businesses so they can operate the way they want, get immediate benefits, and lower the cost of their applications and analytics.

Instant IT® Provides Business Value In Two Ways

Instant IT® Business Design aligns IT fully with business operations, working with people at all levels to adapt to ever-changing market demands and opportunities. And Instant IT® computer-generated applications make IT automated, instant, and economical.

Learn more about InfoNovus InstantIT

Business Design

InfoNovus Instant IT® Business Design lets companies quickly design the way their business needs to operate and how work will be done, including rethinking and automating business process actions. It also provides management, governance, and control over the development, deployment, and evolution of automated analytics and algorithms that is necessary for effective automation of process actions.

Learn more about InfoNovus

Computer-Generated Applications

InfoNovus developed Instant IT® so companies can design the business operations they want, get applications generated by computer instantly, and manage, govern, and control business processes, rules, and data. This innovation makes the process of generating business applications instantaneous and reduces IT costs by 60%.

Instant IT® Automation Delivers Measurable Business Value

InfoNovus Instant IT® reinvents the way IT works and makes IT automation pay off. It provides a reduced cost basis that lowers companies’ costs of ownership for applications. It supports companies’ unique business operations that differentiate them from their competitors. InfoNovus helps companies replace legacy IT and move through their digital journeys.

InfoNovus Instant IT® helps IT become automated, instant, and economical.