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The Business Value of Agile Software Methods by Saya Sone, Hasan Sayani, David Rico

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Net Present Value of Agile Methods

The net present value (NPV) of agile methods refers to the discounted economic business value of nontraditional methods for creating software. In this case, discount means to reduce in value or otherwise devalue, lessen, cancel, or lower the expected benefits of agile methods over time. There are two ways of increasing the profits of a firm, project, or organization:⑴ increase its revenues or (2) decrease its costs. We use the cost of quality, total cost of ownership, and total life cycle cost approach for increasing benefits by decreasing costs.

Maintenance is estimated to cost as much as 70% of a project's total resources to fix defects and nonconformances to requirements. Agile methods cost much less ...

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