Compute the cost benefit of reengineering using appropriate data.P1 = Current annual maintenance cost for an application = $2000P2 = Current annual operations cost for an application = $4000P3 = Current annual business value of an application = $10000 P4 = Predicted annual maintenance cost after reengineering = $500P5 = Predicted annual operations cost after reengineering = $3000P6 = Predicted annual business value after reengineering = $10000P7 = Estimated reengineering costs = $1000 P8 = Estimated reengineering
calendar time = 0.1 yearsP9 = Reengineering risk factor (P9 = 1.0 is nominal) = 1.0L = Expected life of the system = 4 yearsCmaint = [P3 - (P1 + P2)] * L = $16000
What will be an ideal response?
A cost-benefit analysis model for reengineering has been proposed by Sneed. Nine parameters are defined:
P1 = Current annual maintenance cost for an application
P2 = Current annual operations cost for an application
P3 = Current annual business value of an application
P4 = Predicted annual maintenance cost after reengineering
P5 = Predicted annual operations cost after reengineering
P6 = Predicted annual business value after reengineering
P7 = Estimated reengineering costs
P8 = Estimated reengineering calendar time
P9 = Reengineering risk factor (P9 = 1.0 is nominal)
L = Expected life of the system
The cost associated with continuing maintenance of a candidate application (i.e., reengineering is not performed) can be defined as
Cmaint = [P3 - (P1 + P2)] * L
The costs associated with reengineering are defined using the following relationship:
Creeng = P6 - (P4 + P5) * (L - P8) - (P7 * P9)
The overall benefit of reengineering can be computed as
Cost benefit = Creeng - Cmaint
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