2.2 Why is SPI Important?

SPI is important because it is the primary means by which a new and improved software process is created. This is done in order to achieve significant economic benefits at the least possible costs. Notice that benefits and costs are mentioned yet again. Aren't these the terms of the ROI equation? Indeed they are. ROI of SPI is the ratio of benefits to costs. In fact, higher benefits and lower costs increase the ratio of benefits to costs. This helps realize a greater ROI of SPI. SPI is important because it maximizes the ROI of SPI.

A well-designed software process has a positive effect on the bottom-line economic performance of a software enterprise. Performance is often measured in terms of productivity and cost efficiency. This applies to commercial and nonprofit organizations.

Conversely, poorly designed software processes have negative consequences on the economic performance of an enterprise. Poor software processes result in high cost of operations, inefficient use of resources, and lost market opportunities. Lack of quality and reliability, poor customer satisfaction, and poor internal morale are the results of poorly designed processes.

It is important to remember that ROI is just one tool for evaluating the performance of a new and improved software process. SPI is used to create a new and improved software process for a variety of reasons, not just ROI. At a very basic level, SPI can be used to increase productivity, quality, cycle time reduction, and cost reduction.

However, SPI can...