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How Much is Software Quality Worth?
As a consultant and trainer I am often asked for the hard numbers of software quality, such as "How much does an average defect cost to fix?" or "What is the average cost of downtime for a major e-commerce web site?"
Something that often gets lost in the discussion is the perspective of these types of metrics. The figures will vary based on factors such as technology, market, people, process, tools, etc. and it is sometimes hard to make sense of them in the real world.
What's more troubling and confusing are the senior management teams that disregard any kind of supporting evidence of the costs of quality and throw all risks to the wind. These people don't care how much it will cost to fix problems. They don't care about the efficiency of an operation or the morale of the employees. Heck, they don't even care about the poor customer who tries to do something using the product and can't because of a defect. (Internally at the company these are not called "defects", but rather "issues," "incidents," "trouble reports," etc. Defects have too much of a negative connotation and we must be politically correct, after all.) When management takes the risk to be first instead of right, the stakes can be huge. Companies have been lost by taking these kinds of risks.
We can talk averages and percentages all day, but let's bring the discussion to a case in point. A recent story caught my eye about the case concerning the State of Mississippi vs. American Management Systems, Inc. In this case, the State of Mississippi alleged that AMS failed to deliver an automated tax system on schedule. According to Washington Technology magazine,
The contract was initially signed on December 13, 1993 and started out as a three-year $11.2 million contract.
So, in five years AMS failed to launch an application, yet was still "on schedule." Hmmm, sounds like some contract re-definition to me. What is important to see is:
Of course, that's what insurance is for, right?
However, there is a bright side for the company,
The state of Mississippi got an apology from AMS, which said that on the project, AMS "fell short of the high standards of performance that the company has set for itself." However, AMS also told its shareholders that the settlement "expressly provides that AMS was not at fault and did not breach its contract with the state."
So, AMS is $23.5 million poorer, the insurance company is out $185 million, and the state of Mississippi gets $30 million to try the whole thing over again. One of the most amazing parts of this story is found in the last paragraph of the article,
"In a statement announcing the settlement, the Mississippi tax commission and department of IT services said that "contractors with integrity have nothing to fear" from the verdict and settlement. Further, they said that Mississippi is willing to work with any vendor, including AMS."
Sounds to me like the main people to profit from this case are the attorneys!
I would be willing to bet that this project had all of the classic marks of project risks, including poor contractor management, increasing scope, and technology changes. In fact, from 1993 to 1999, technology went from client/server to web-based!
My point in all of this is that software defects and poor project management carry a big price tag. However, in this case, the guilty go free and live to go on to other projects. In other cases, the guilty go into bankruptcy, which was a distinct possibility in this case as well.
The next time your company thinks about rolling the dice with project decisions, remember that some risks really do materialize!
This story validates my answer to the question people often ask me, "Why does software have so many bugs?" My answer is simple, "Because people keep buying it that way."
Quotes taken from Washington Technology Magazine, September 11, 2000 http://www.wtonline.com/vol15_no12/cover/1782-1.html
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