Quality Improvement and Infrastructure Activity Costs in Software Development: A Longitudinal Analysis

This study draws upon theories of task interdependence and organizational inertia to analyze the effect of quality improvement on infrastructure activity costs in software development. Although increasing evidence indicates that quality improvement reduces software development costs, the impact on infrastructure activities is not known. Infrastructure activities include services like computer operations, data integration, and configuration management that support software development. Because infrastructure costs represent a substantial portion of firmsʹ information technology budgets, it is important to identify innovations that yield significant cost savings in infrastructure activities. We evaluate quality and cost data collected in nine infrastructure activity centers over 10 years of product development in a major software firm undergoing a quality transformation. Findings indicate that infrastructure activities do benefit from quality improvement. The greatest marginal cost savings are realized in infrastructure activities that are highly interdependent with development and that occur later in the software development life cycle. Organizational inertia influences the rapidity with which the infrastructure activities benefit from higher product quality, especially for the more specialized activities. Finally, our findings suggest that although the savings in infrastructure from quality improvement are substantial, there are diminishing returns to quality improvement in infrastructure activities.