The Cost of Innovation in Software Development Projects

The paper tackles the topic of determining the cost of innovation in software development projects. Innovation can be achieved either in a planned or unplanned manner. The paper approaches the scenarios were innovation is planned for. As a starting point an innovative software development project is analyzed. The project is depicted step by step as it was implemented, from inception to delivery. Costs that are proprietary to innovation in software development are isolated based on the author’s personal experience in managing the above mentioned project. Innovation costs components identified by the author are then validated using open discussions with software development professionals and projects managers on LinkedIn groups. In order to receive relevant feedback only groups that focus on software development and innovation management are targeted. Additional innovation cost components suggested by software development professionals and projects managers are also considered. Based on the identified cost components an indicator is built. The indicator is meant to formalize the process of determining the cost of innovation in a software development project. The indicator aggregates all the innovation cost components that are identified in the research process. The process of calculating each cost component is also described. Conclusions are formulated and new related research topics are submitted for debate. Keywords—Innovation cost, IT project management, software development. I. DEVELOPING AN INNOVATIVE SOFTWARE APPLICATION NNOVATION is regarded as an important driver for competitive advantage [1]. The current paper focusses on IT and particularly on software development innovation. The research efforts were focussed on the hypothesis where developing an innovative software application will involve all the costs generated by developing a classic software application to which innovation proprietary costs will be added. The goal of the research process was to provide a tool that facilitates proper estimation of innovation costs before the actual implementation of the project. The innovation cost plays a decisive role in whether developing an innovative software application is feasible or not [2]. In order to identify innovation proprietary costs an innovative software application was analysed. The project owner was UPC Romania, one of the largest cable, Internet and telephone service providers in Romania. The project was going to be implemented by the Graffity PR agency and was going to be aimed at highlighting UPC superior Internet speed and reliability. In order to avoid any confusions, naming conventions will be used. UPC will be referred to as the project owner and Graffiti PR will be referred to as the Mihai Liviu Despa is with the Bucharest University of Economic Studies, Bucharest, Romania (phone: +40.722.381.138; e-mail: [email protected]). provider. The only requirements made by the project owner were that an innovative online solution should be implemented and the solution should emphasize the quality of its Internet services. In order to identify an idea for a web application that will meet the project owner requirements, the provider organized a set of internal meetings. There were three separate meetings organised with the project team. First meeting was focused on identifying ways of proving to a large online audience that an Internet connection is fast and reliable. Results of the first meeting are presented in Table I. TABLE I RESULTS OF THE PROJECT’S TEAM FIRST MEETING