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Evolving Software Development Methodologies: The Search for Accounting Clarity

For many years, most IT departments used the same software development methodology called waterfall. This methodology outlines distinct phases for project completion; each phase needing to be completed prior to the start of the next. The primary accounting standard for allocating costs for software development is written in the language of waterfall. Costs are either capitalized or expensed depending on the type of activity that was performed. IT departments have been moving toward a new group of software development methodologies called agile. These methodologies do not follow the phases of waterfall. This makes the current accounting standard for software development difficult to interpret and determine the appropriate transaction. This further hinders IT organizations attempts to better quantify business value of software projects. To examine this issue, a new construct called accounting clarity is introduced in this research. Accounting clarity is an agreement between IT and accounting regarding the treatment of software development costs. This study shows that it is essential for both IT and accounting to work together to determine a solution. The accounting clarity construct is developed from the “ilities” of software quality models and the Capability Maturity Model (CMM) Level 3 key process area (KPA) of intergroup coordination. Intergroup coordination provides the concepts for accounting clarity as the two groups must coordinate to determine the appropriate accounting treatment. The “ilities” are characteristics that should be followed and measured throughout a software development project to ensure long term maintainability of software. This study proposes that accounting clarity should be one of the "ilities" in the software quality model. A portion of the study of accounting clarity examines the relationship between accounting clarity and project control, proposing a positive relationship between the two variables. Then the study examines factors that help to increase accounting clarity. These factors were derived from teamwork and coordination literature. To test the hypothesized relationships, a survey methodology was used. Individuals working on agile software development projects were participants in the survey. This study contributes to both the IT and accounting literature. The research provides a framework to examine other contexts in which the current accounting standards are unclear. As changes happen more frequently in business, this is more likely to occur on a frequent basis. The study has practical implication for software development as it highlights the importance of understanding the accounting implications prior to the project and continuously throughout the lifespan of the software. Adding accounting clarity to the “ilities” of software quality helps software development teams include this in project plans with any software development methodology.

Identiferoai:union.ndltd.org:siu.edu/oai:opensiuc.lib.siu.edu:dissertations-1957
Date01 December 2014
CreatorsIgou, Amy
PublisherOpenSIUC
Source SetsSouthern Illinois University Carbondale
Detected LanguageEnglish
Typetext
Formatapplication/pdf
SourceDissertations

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