Communications of the ACM

tween UDEs, pointing from the causing UDE to the resulting UDE. The process of fCRT building starts with putting the leading UDE on top. UDEs that are the causes of the leading UDE are then picked from the list and put below it and connected through the causality arrows. The process continues by adding more UDEs below the UDEs already in the tree that are causing them and subsequently adding the required causality arrows. The bottom UDEs of the fCRT are not associated with other UDEs causing them; they are thus considered the root causes for the software value gap.

This analysis identifies the two main root causes: lack of effective focus on value and lack of an effective IT resources management methodology.

Root causes of the software value gap are not just the result of IT division management practices but the behavior and norms within the organization as a whole. Reducing the gap means creating more value to companies and other organizations through better response to their business needs. This greater value can be realized by addressing two options: select the most valuable IT systems for development and maintenance (effectiveness) and enhance productivity in the IT division (efficiency). Here, we outline a comprehensive approach that enables a breakthrough toward reducing the software value gap through existing resources. Moreover, it synergistically complements the conventional approaches outlined earlier.

Focus on Value

Since demand for software solutions significantly exceeds supply, IT divisions are, by definition, permanent bottlenecks in their organizations and hence unable to satisfy all specified corporate IT needs.d Unfortunately, selection of projects for inclusion in the realization portfolio typically reflects the organizational power of the requesting division or the length of stay of the request in the to-do queue rather than real economic value for the organization.

d Permanent bottlenecks are resources that will remain bottlenecks, since demand is extremely large.

Figure 1. fCRT of the software value gap.

Root causes Leading UDE

Software
solutions
development
does not create
enough value
Software solutions
productivity
inadequate
Software
solutions
in realization
portfolio do not
maximize value
Cost of
IT division
too high
Excessive
ineffective time
of IT developers
Delivered
software solutions
are abandoned
often
Lack of
effective selection
mechanism for
portfolio selection
Lead times
too long
Software
solutions
meet needs
only partially
Requirements
not specified
properly
Internal
customers’
involvement
not sufficient
Lack of effective
focus on value
Lack of efficient
and effective
IT resources
management
methodology