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Valuing software service development in support of business‐to‐consumer services
Author(s) -
Tansey Brendan,
Stroulia Eleni
Publication year - 2010
Publication title -
canadian journal of administrative sciences / revue canadienne des sciences de l'administration
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.347
H-Index - 48
eISSN - 1936-4490
pISSN - 0825-0383
DOI - 10.1002/cjas.130
Subject(s) - service (business) , software , revenue , software as a service , services computing , business value , software development , business , business model , value (mathematics) , industrial organization , computer science , process management , marketing , economics , finance , web service , world wide web , human capital , economic growth , machine learning , programming language
In efforts to innovate, organizations are increasingly offering competitive value‐added services, frequently by evolving their software infrastructure. Business decisions are often motivated by economic trade‐offs related to the development and management of this software. To develop an economic‐modelling framework for the evolutionary development of software‐based services, we examine the problem of estimating the return on a software‐evolution investment. We present methods for estimating both the cost of developing a new service by incrementally modifying existing software and the value generated by introducing the service to the market in terms of revenue generated by the new service and the value of potential future services it may enable. An example case study illustrates the model. Copyright © 2010 ASAC. Published by John Wiley & Sons, Ltd.