Value creation and capture: a model of the software development process

Landmark Graphics supplies software and services to the upstream oil and gas industry. Our software portfolio, which ranges from exploration and drilling to data management and decision analysis, includes more than 60 products consisting of over 50 million lines of source code. For many years, Landmark has been collecting project metrics we wished to harvest to gain insight into key business questions in three areas: optimal release cycle duration (scope/time trade-off), optimal project staffing levels, effects of uncertainty. We set out to develop a relatively simple project dynamics model to use in conjunction with market sensitivity and economic analysis to help optimize profitability. Some of our ideas and results are similar to those of Preston Smith and Donald Reinertsen, who examined the impact of time-to-market sensitivity. However, our approach is a more detailed model tuned to software development issues.