Software Engineering Institute Carnegie Mellon

Cost Benefit Analysis Method (CBAM)

Challenges:
How do you go about taking economic considerations into account when designing or modifying a system architecture?

  • How do you account for the costs involved?
  • How do you characterize and compare the benefits that will accrue to various architectural strategies?
  • How can costs and benefits be "traded-off" against quality attributes or functionality?
  • How can you characterize the uncertainties involved in your estimates?

Overview:
The Cost Benefit Analysis Method (CBAM) is an architecture-centric method for analyzing the costs, benefits, and schedule implications of architectural decisions. It also assesses the uncertainty surrounding judgements of costs and benefits, so as to provide a basis for informed decision making about architectural design/upgrade. The CBAM builds upon the ATAM, although an ATAM is not an absolute prerequisite.

Benefits:
The CBAM enables users to make informed software requirement and software investment decisions based upon an analysis of the economic and architectural implications of those decisions.

Who Would Benefit:
Software product or project managers, software product line managers, business analysts, software architects/senior designers.

Description:
The CBAM consists of the following steps:

  1. Choosing Scenarios and Architectural Strategies
  2. Assessing QA Benefits
  3. Quantifying the Architectural Strategies' Benefits
  4. Quantifying the Architectural Strategies' Costs and Schedule Implications
  5. Calculate Desirability
  6. Make Decisions

At the end of the CBAM exercise, we have guided the stakeholders to determine a set of architectural strategies that address their highest priority scenarios. These chosen strategies furthermore represent the optimal set of architectural investments. They are optimal based upon considerations of: benefit, cost, schedule, within the constraints of the elicited uncertainty of these judgements and the willingness of the stakeholders to withstand the risk implied by uncertainty.

Availability:
SEI staff will work with a customer team to apply the CBAM as needed.

Additional Information:
Contact us for additional details or to arrange Cost Benefit Analysis Method services.