Reuse Financing Estimate
For general economic estimates, consider two categories: producer costs and consumer benefits. In the area of producer
costs, there are startup costs and ongoing costs. There may be a different funding model for the startup costs than for
the ongoing costs. The simple image below illustrates some items to consider tracking along with some sample
values.
End of year
|
1
|
2
|
3
|
Producer Costs
|
|
|
|
Startup
|
|
|
|
|
Reuse management
|
150,000
|
|
|
|
Workproduct creation
|
350,000
|
|
|
|
Asset repository creation
|
500,000
|
|
|
|
Tools creation
|
100,000
|
|
|
|
Training/marketing
|
75,000
|
|
|
|
Other
|
50,000
|
|
|
Total Startup
|
$1,225,000
|
$0
|
$0
|
|
|
|
|
Ongoing
|
|
|
|
|
Reuse management
|
|
150,000
|
150,000
|
|
Workproduct creation
|
|
600,000
|
1,000,000
|
|
Asset repository maintenance
|
|
100,000
|
100,000
|
|
Tools maintenance
|
|
50,000
|
75,000
|
|
Training/Marketing
|
|
25,000
|
50,000
|
|
Other
|
|
10,000
|
20,000
|
Total Ongoing Costs
|
$0
|
$935,000
|
$1,395,000
|
|
|
|
|
Total Startup and Ongoing Costs
|
$1,225,000
|
$935,000
|
$1,395,000
|
|
|
|
|
|
|
|
|
Consumer Benefits
|
|
|
|
|
Total Asset ROI
|
50,000
|
500,000
|
1,500,000
|
|
Dev Resources Saved
|
50,000
|
100,000
|
500,000
|
|
QA Resources Saved
|
50,000
|
50,000
|
100,000
|
|
Dev Mgr Resources Saved
|
50,000
|
50,000
|
200,000
|
|
|
|
|
Total Benefits
|
$200,000
|
$700,000
|
$2,300,000
|
|
|
|
|
|
|
|
|
Net Results
|
-$1,025,000
|
-$235,000
|
$905,000
|
A sample of reuse financing estimates is found in Example: Asset Financial Estimate.
In typical funding situations, the funds are allocated for the activities to deliver the artifacts for the project.
This relationship changes with the reuse model, where the funding for assets and their artifacts may provide value for
several projects.
There are several models for funding the reuse team and related reuse efforts.
-
Overhead funding: the costs for the reuse team are handled in the pool of overhead expenses.
-
Tax funding: each application development project pays a tax which covers the cost of the reuse team.
-
Payments for assets / services: the application development teams pay for the assets and services they use from the
reuse team.
The organization needs to determine its funding model for conducting asset-based development. An initial recommendation
is to start with overhead funding, and then shift to payments for assets and services. The purpose of
this recommendation is to provide time for startup costs, and then move to another funding model such as for services
or assets, when the initial value has been verified. For instance, you can use the overhead funding model
throughout the startup phases and then shift to an asset and services funding model thereafter.
Estimating Asset ROI
Estimating the return on investment for an asset is a challenging task. There are few models in practice
today that accomplish this. One model comes from Jeffrey Poulin's work on estimating ROI for code assets. An
example of this is found in Example: Asset ROI Calculator.
Estimating Project ROI
Estimating the return on investment for a project using assets is also a challenging task. Using repository metrics for
asset consumption is one approach. An example of using a spreadsheet for estimating the costs of asset use and tool use
on a project is in Example: Project Asset ROI.
|