Nonvalue-added Activities in Software Development

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Nonvalue-added Activities in Software Development


Clients approach us with so many different requests with expectations for pure profitability and sometimes magic. In most cases, we accept medium to large-size refactoring software projects with the planning of complete redesign and development.

However, the critical success of refactoring software is to consider eliminating nonvalue-added activities that are increasing the corporation’s cost. Here is a direct relation between Non-value-added Activities in Software Development cost and corporation cost. So, it’s more important to eliminate Non-value-added Activities in Software Development

In cost accounting, managers use financial details to make a valued decision. These decisions will help to reduce unnecessary costs in activities. Every activity in an organization has a cost, and this is a fact. There is no free activity, even though it is internal. It can even be an internal process of software that is using CPU time or other resources. In small cases, this might not be a considerable amount. But in large-scale software, the processing time can be significant due to overhead creation. For example, resources used to maintain and monitor marginal CPU performance as well as IT experts added to the overhead. As a result, to reduce a cost, the activity associated with that cost must be clear.

What are the nonvalue-added activities in Software Development?

Innovative and evolving organizations realize that after a few years, many of the software in use must go through the refactoring process to stay competitive. However, most managers consider refactoring for the performance upgrade or adding new functionalities. While missing the point of eliminating nonvalue-added parts that have no benefit to the overall company activities but cause an unwanted cost.

For example, in one of the recent SVCIT refactoring project, our team were able to recognize merging multiple reporting systems into a new licensed integrated system. The refactoring outcome reduced two IT resources, over five x-large AWS instances, saved 70% in processing time, and a couple of licenses in use. Which decreased $1.5M annually in total cost to the company.

Over 40% of the generated reporting system belonged to another profit center in the organization that was shut down over two years ago. Still, no one attempted to stop the activity to eliminate unnecessary high costs.

The Cost is not an Expense

The organization might incur costs even though there are no expenses recorded in the accounting system. For example, if the user gives up a purchase and does not continue with the transaction due to a lack of performance of the system or an inconvenient process in the user interface, then that examines cost due to lost sales.

Another example of opportunity cost is the wasted time of engineers and other resources that maintain the non-active part of the software or resources employed by the non-active component. Note, this cost will never be measured or accounted for in the accounting systems. You can also consider this as opportunity costs vs. outlay costs.

However, this is one of the most critical losses of revenue that will never account for in a software problem.

Loss of Resources Due to Depreciated Software

When managers allow the depreciated component of a software system to continue working as mentioned above. It is a nonvalue-added activity that incurs a cost, according to the accounting system, the definition of cost means the company will take away opportunities, and resources available to be able to add more value to other parts of the organization.

it is a Nonvalue-added Activity in Software Development that incurs cost. according to the accounting system, the definition of cost means the company will take away opportunities, and resources available to be able to add more value to other parts of the organization. That means if these non-value-added activities do not get recognized by experts, they hold back companies eventually from adding value-added activities and allow competitors with such expertise to advance into the market. Therefore, removing costs is not the solution to your growth. Eliminating undesirable parts in your product items and repeating them now. And again maybe the way you may be searching for to upgrade, develop, and make the item proficient.

Author: Cyrus Akbarpour
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