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7 - PROJECT COST MANAGEMENT

such as configuration management and independent testing. Historical values of these cost drivers and
their impact on effort (i.e., cost) are often maintained as an organizational asset for various domains for
which the organization develops software.

Measures of software size are presented subsequently in this section of the Software Extension; complexity
is discussed here. There are two forms of complexity for software projects: complexity of the problem
domain and complexity of the solution domain; both affect the effort, and therefore the cost of a software
project. Problem complexity is determined in part by the problem domain and in part by the familiarity of the
software developers with that domain. Data processing software for a small organization is thought to be a
less complex domain than interplanetary navigation or instrumentation software for experiments in nuclear
physics. However, software developers who are experienced in software for interplanetary navigation may
find that domain simpler for them than business data processing for which they have no experience.
Solution complexity depends on whether known algorithms, data representations, and computational
methods can be used or whether new algorithms, data representations, and/or computational methods
will have to be developed to solve the problem. A complex problem domain and/or a complex solution
domain can greatly increase the amount of effort needed to provide a satisfactory solution to a problem.

• Governance Policies. In some organizations, organizational governance policies may specify objectives,
processes, and procedures that can have a significant impact on cost management for IT and software
projects. Governance policies may impose a standard process for software development or the software
testing and review processes that need to be accounted for in a software project cost estimate. For
software that has safety, security, health, or financial impact for the users, governance policies or
regulations that have to be built into the software may impact cost. These may result in complex software
that checks to ensure computations are being performed properly (checks and balances in intermediate
results, user intervention in completing or safely terminating a software process), or imposes limits on
access to authorized groups of people who perform some functions, or preserves audit records of those
who perform certain functions (such as adjusting a paycheck).
Operating policies and procedures, and the resulting software functions and controls, may be based on
IT governance standards and guidance from sources such as COBIT (Control Objectives in Information
and Related Technology), COSO (Committee of Sponsoring Organizations of the Treadway Commission),
ITIL (Information Technology Infrastructure Library), ISO/IEC 20000 (IT Service Management) or ISO/
®
IEC 27000 (Systems and Software Security Engineering). Other inputs to planning software project cost
include fiduciary requirements or government regulations that mandate the financial and security controls
to be built into the software system. For example, ensuring compliance to policies such as the Sarbanes
Oxley Act (SOX Compliance), Basel-III, or the Health Insurance Portability and Accountability Act (HIPAA)
may need to be included in the software project cost management plan.
• Portfolio. Priorities and constraints in an organization’s portfolio of projects and programs that includes
software projects and software programs may provide inputs to planning cost management for a software
project. The availability of reuse, COTS, or open source software will influence how much of the desired
software will be original development and how much will be modification and integration of existing
software. Even when other sources of software components are available, an organization may decide to
build new software, thereby developing wholly owned Intellectual Property (IP) for future reuse or resale.

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