Selecting Refactorings:An Option Based Approach

Refactoring, aims to improve the design of existing code to cope with foreseen software architecture evolution. The selection of the optimum refactoring strategy can be a daunting task involving the identification of refactoring candidates, the determination of which refactorings to apply and the assessment of the refactoring impact on software product quality characteristics. As such, the benefits from refactorings are measured from the quality advancements achieved through the application of state of the art structural quality assessments on refactored code. Perceiving refactoring trough the lens of value creation, the optimum strategy should be the one that maximizes the endurance of the architecture in future imposed changes. We argue that an alternative measurement and examination of the refactoring success is possible, one, that focuses on the balance between effort spent and anticipated cost minimization. In this arena, traditional, quality evaluation methods fall short in examining the financial implications of uncertainties imposed by the frequent updates/modifications and by the dynamics of the XP programming. In this paper we apply simple Real Options Analysis techniques and we perceive the selection of the optimum refactoring strategy as an option capable of generating value (cost minimization) upon adoption. Doing so, we link the endurance of the refactored architecture to its true monetary value. To get an estimation of the expected cost that is needed to apply the considered refactorings and to the effect of applying them, in the cost of future adoptions we conducted a case study. The results of the case study suggest that every refactoring can be associated with different benefit levels during system extension