What is the value of your software?

Author

De Groot, Jelle ; Nugroho, Ariadi ; Bäck, Thomas ; Visser, Joost

Author_Institution

Software Improvement Group, Amsterdam, Netherlands

fYear

2012

fDate

5-5 June 2012

Firstpage

37

Lastpage

44

Abstract

Assessment of the economic value of software systems is useful in contexts such as capitalization on the balance sheet and due diligence prior to acquisition. Current accounting practice in determining software value is based on the cost spent in software development. This approach fails to account for the efficiency with which software has been produced or the quality of the product. This paper proposes three alternative models for determining the production value of software, based on the notions of technical debt and interest. We applied the models to 367 proprietary systems developed by a range of different organisations using a range of different programming languages. We present the valuation results and discuss the weaknesses and strengths of the models.

Keywords

cost accounting; economic indicators; product development; software quality; balance sheet capitalization; cost spent; economic value assessment; product quality; production value; programming languages; software development; software quality; software systems; software value; technical debt; technical interest; Cost accounting; Investments; Maintenance engineering; Production; Programming; Software systems; capitalization; due diligence; software quality; software value; technical debt;

fLanguage

English

Publisher

ieee

Conference_Titel

Managing Technical Debt (MTD), 2012 Third International Workshop on

Conference_Location

Zurich

Print_ISBN

978-1-4673-1748-1

Type

conf

DOI

10.1109/MTD.2012.6225998

Filename

6225998