Showing posts from November, 2006

The Big DIP

Lately, I have had reason to study the effects that Design-In-Process, DIP, has on the profitability of software projects. It turns out DIP is a project killer, and potentially a corporate business killer too. What is Design-In-Process? It is partially finished work. Most software development projects have too much of it. The manufacturing industry learned decades ago that too much inventory was a bad thing. In the software development business, the inventory is Design-In-Process. We still haven't learned the lesson. Why is DIP bad? Let's have a look at the classic Return On Investment (ROI) equation: ROI = (T - OE) / I Where: ROI is the Return On Investment, a measure of how profitable a business system (company, project, etc.) is T is Throughput, the amount of money made OE is Operating Expenses, the money the business system spends producing throughput. Wages, rent, electricity, are all OE. I is investment, the money tied up in the system. This includes computers