Volatility on Project Performance

During the last decade, software process simulation has been used to address a variety of management issues and questions. These include: understanding; training and learning; planning; control and operational management; strategic management; process improvement and technology adoption. This paper presents a simulation model that was developed by Fraunhofer IESE for Siemens Corporate Technology. The purpose of this simulation model was to demonstrate the impact of unstable software requirements on project duration and effort, and to analyse how much money should be invested in stabilising software requirements in order to achieve optimal cost effectiveness. The paper reports in detail on the various steps of model building, discusses all major design decisions taken, describes the structure of the final simulation model, and presents the most interesting simulation results of a case study. 1