Software code flexibility profitability in light of technology life cycle

Sagi Akron () and Roy Gelbard ()
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Sagi Akron: University of Haifa
Roy Gelbard: Bar Ilan University

Operational Research, 2020, vol. 20, issue 2, No 11, 723-746

Abstract: 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.

Keywords: Flexible manufacturing systems; Reusable software code development; Financial profitability decision making; Technology life cycle (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s12351-017-0350-5

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