Quality cost analysis: Benefits and risks

All rights reserved " Because the main language of [corporate management] was money, there emerged the concept of studying quality-related costs as a means of communication between the quality staff departments and the company managers. " 1 Joseph Juran, one of the world's leading quality theorists, has been advocating the analysis of quality-related costs since 1951. Feigenbaum made it one of the core ideas underlying the Total Quality Management movement. 2 It is a tremendously powerful tool for software quality, as it is for product quality in general. Quality costs are the costs associated with preventing, finding, and correcting defective work. These costs are huge, running at 20%-40% of sales. 3 Many of these costs can be significantly reduced or completely avoided. One of the key functions of a Quality Engineer is the reduction of the total cost of quality associated with a product. Here are six useful definitions, as applied to software products. Figure 1 gives examples of the types of cost. Most of Figure 1's examples are (hopefully) self-explanatory, but I'll provide some additional notes on a few of the costs: 4 • Prevention Costs: Costs of activities that are specifically designed to prevent poor quality. Examples of " poor quality " include coding errors, design errors, mistakes in the user manuals, as well as badly documented or unmaintainably complex code. Note that most of the prevention costs don't fit within the Testing Group's budget. This money is spent by the programming, design, and marketing staffs. • Appraisal Costs: Costs of activities designed to find quality problems, such as code inspections and any type of testing. Design reviews are part prevention and part appraisal. To the degree that you're looking for errors in the proposed design itself when you do the review, you're doing an appraisal. To the degree that you are looking for ways to strengthen the design, you are doing prevention. • Failure Costs: Costs that result from poor quality, such as the cost of fixing bugs and the cost of dealing with customer complaints. • Internal Failure Costs: Failure costs that arise before your company supplies its product to the customer. These costs go beyond the obvious costs of finding and fixing bugs. Many of the internal failure costs are borne by groups outside of Product Development. 4 These are my translations of the ideas for a software development audience. More general, and more complete, …