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           

Computer Science & Information Technology

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