Cost-Value Approach

For sorting requirements by their potential value and cost…

• Value is a requirement’s potential contribution to customer satisfaction
• Cost is the cost of implementing the requirement
• Can prioritize requirements according to their cost-value ratios
  • Absolute values and costs are complex to estimate
  • Relative comparisons are easier
• Based on the Analytic Hierarchy Process (AHP); an approach for supporting decision-making.

Includes five steps…

1. The requirements engineers review the candidate requirements to ensure that the requirements are complete and clearly defined

2. Customers and users determine the relative value of each requirement using the pairwise comparison method of the AHP, which includes five steps.

   1. Compare pairs of requirements
      • 1 - requirements are of equal value
      • 3 - one is slightly preferred over the other
      • 5 - one is strongly preferred over the other
      • 7 - one is very strongly preferred over the other
      • 9 - one is highly preferred over the other
      • Intermediate values 2, 4, 6, and 8 used when compromise is needed
      • If pair (x,y) has relative value n, complementary pair (y,x) has reciprocal value 1/n
   2. Normalize the columns
   3. Sum each row
   4. Normalize sums
   5. Report relative values
   • Note: We do data Normalization when seeking for relations.
   6. Check Consistency
      • The consistency index is the first indicator of the result accuracy of the pairwise comparison
   7. Multiply comparison matrix by priority vector
   8. Divide each element by the corresponding element in priority vector
   9. Compute principle eigenvalue
   10. Calculate consistency index $CI=\frac{\lambda -n}{n-1}$
   11. Compare against consistency index of random matrix <0.1
   • CI shows the deviation of consistency Random Matrices
     

3. Perform Step 2 of AHP to estimate relative cost

4. Create a cost-value diagram where the value is depicted on the y-axis, and the cost is depicted on the x-axis

   • Advantages:
     • Unbiased
     • Scientific
     • Check if errors
   • Disadvantage:
     • Difficult
     • Lack of understanding of the results

5. Stakeholders use the cost-value diagram as a conceptual map for analyzing and discussing the requirements