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  1. #1
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    QA, a cost or profitable activity?

    I'm starting this thread as a continuation of a discussion in http://www.qaforums.com/ultimatebb.p...5;t=006061;p=2 that was itself drifting away from the threads original topic.

    The basic argument is that software QA is typically percieved as an overhead or cost, whereas software development is a profitable activity.

    While I can't argue about whether or not the perception is prevalent, IMO, the underlying argument is a fallacy. The reason for this, again just my opinion, is that QA is an integral part of the SDLC, essential to the production of commercially viable software applications. Remove QA from the process, and you will end up with software of dubious quality, which will become increasingly difficult to sell to an ever more mature software market.

    If you look at many recent marketting campaigns by major IT vendors, there is a huge emphasis on sold, reliable, scalable systems. Accepting a few grains of truth in the usual marketting BS, this can be interpreted to some extent as 'we're very sorry for the crappy and flakey systems we'ver sold you in the past, but now that we are getting a handle on QA, we might actually be able to deliver something that meets your requirements'. Thus QA is being used by big players to gain competitive edge.

    From a small company perspective, I find systematic QA to be a very profitable activity. It allows me to accurately predict how long it takes to incorprate and ship a software enhancement that has no negative side effects on other existing users. This in turn lets me incorporate sales specific enhancements without compromising quality, which in turn lets me beat up my head to head competitors who have less of an emphasis on QA.

    I imagine that if QA staff kept in contact with sales management on a regular basis, they might get a better feeling of self worth.

    Well, thats my 2c on the subject,

    Shane

  2. #2
    Moderator JakeBrake's Avatar
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    Re: QA, a cost or profitable activity?

    Shane, I think history adequately supports your statements. The act of proving to the right audience that "quality" is a worthwhile endeavour, is a difficult thing at best. My experiences show that uncontrollable bleeding is required to trigger change. My own adaptation (where I've had the opportunity) to this pickle is to show the cost of unquality. Beyond that, I have nothing to add to this nearly 50-year old IT discussion. Been there and done that so so many times! My favorite bleeding experience:

    http://www.sqablogs.com/JakeBrake/Performance+Horror/

  3. #3
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    Re: QA, a cost or profitable activity?

    I have seen what cost not having QA did for a company. Development staff put into production some changes of code that QA did not test, the result, the entire production order system went down for over 24hrs causing the company to lose over $750 million dollars.

    You would think with that kind of loss, that very same development staff (and management) would NOT make the same mistake, wouldn't you? Weeeeelll, they tried again and the loss was for about half a day at $300 million lost in revenue.

    These mistakes were made due to making a deadline at all costs. QA was a burden on the system, considered a cost entity. After the second go around, the company no longer saw QA as overhead or liability but instead as an asset in making sure revenue is continually generated.

    When you experience this first hand, you begin to really believe that QA is indeed a revenue generating entity of any company. It was a great learning experience for all of us.
    Going out of your comfort zone requires failure. True genius is measured by your recovery.

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    Re: QA, a cost or profitable activity?

    I'll stand by my original comments in the previous thread...unless your company sells software, development is a cost just like QA. I'm not trying to make any value judgement on whether QA is necessary (I'm a professional tester, so you know what I think), I'm thinking like an MBA. Any particular individual either directly makes the company money, or is a cost center. Unless you sell QA consulting services, QA is always a cost. Always.
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  5. #5
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    Re: QA, a cost or profitable activity?

    I wonder how people love to quote a single defect causing the specific case of lost $, when defending the cost of QA. This only support jasons' idea from the linked topic "At best, you are a necessary evil. Just make sure you can always demonstrate that 'necessary' part, and you will be ok"

    Any PM knows project is scope*time*quality=money. You have to pay for quality just like you have to pay for meeting deadlines and implementing features. So testers blame managers for short deadlines, blame developers for "eating up" testing time, while they treat testers as evils. This is issue of attitude and first of all tester's attitude. Everyone who believes QA/QC mission is to increase quality believes QA/QC mission is to increase product cost.
    ?:the art of a constructive conflict perceived as a destructive diagnose.
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  6. #6
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    Re: QA, a cost or profitable activity?

    I'll throw in some food for thought.

    When I was studying for my MBA, one of the courses I took encouraged the viewpoint that decisions like this have to be looked at in two different, but similar ways. Lets call it micro and macro, for the sake of labels.

    First, there is the monetary (micro) view. Is this activity going to cost me more to do business? Is it going to cause me to increase prices to offset the additional cost? The answer for QA is obviously yes. In that view, QA is a cost center, not a profit center. From this viewpoint, if you could get away with not doing QA, you are better off.

    Next, there is the economics (macro) view. If I do this activity, will it help me stay in business and sell more product? Over the long haul, does this make sense to engage in this activity? Again, the answer is yes. From this viewpiont, if you don't do QA, you are making a long term fatal decision.

    The problem then changes. It is no longer a matter of "do we do QA" or not. It becomes simply a matter of "do I want the quick profit and run" or "do I want to stay in business for the long run." For me, the answer is obvious. The first decision results in a lot of burnt bridges. The second buys me a secure, long term source of income.

    Another example of this type of decision is buying a car. Do you buy the $10,000 car that will last 3 years because it is less money out of your pocket today? Or do you buy the $20,000 car that will last 10 years because the cost of ownership over the life of the car is less?

  7. #7
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    Re: QA, a cost or profitable activity?

    QA is a cost activity from both an accounting and management perspective.

    That does not mean it is not a value-add activity or is not worth the cost, which is the argument most are putting forth here...

    - Linda

  8. #8
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    Re: QA, a cost or profitable activity?

    I think Darrel is onto something - and many of the other comments are similar, though from different views. Can the cost of doing the activity be offset by the cost of NOT doing the activity. That's really the question, right?

    OK - war story following.

    A couple of years ago, I was running a smoke-test on some third party software that was to be integrated into our stuff. I estimated it would take 3 calendar weeks to complete. Development management argued that it should be done in a week or less - just follow the user docs and things should be fine - after all, its commercial software... right?

    The report was sent to the vendor for comment and suggestion on resolution (they installed it according to their specs... funny things happened...)

    Their response was that I needed more training to understand what was supposed to happen and it would only be $50/hour and take 16 hours. My Director's response? A bill was sent to them for exercising their User Guide against their software that turned 45 major variances (bugs - doing it they way their documentation said to do it did not work...) for 85 hours at $75/hour.

    Who says QA/QC isn't a profit center? [img]images/icons/wink.gif[/img]

  9. #9
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    Re: QA, a cost or profitable activity?

    Originally posted by jason_m:
    I'll stand by my original comments in the previous thread...unless your company sells software, development is a cost just like QA. I'm not trying to make any value judgement on whether QA is necessary (I'm a professional tester, so you know what I think), I'm thinking like an MBA. Any particular individual either directly makes the company money, or is a cost center. Unless you sell QA consulting services, QA is always a cost. Always.
    <font size="2" face="Verdana, Arial, Helvetica">I see your point and the angle you are coming from now. And yeah, in that context you are right. But again, that is something we as test professionals need to try and change. And that is what I have been talking about. How we change that mindset and move ourselves to being an asset instead of a liability.

    Jim
    Jim
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    For all the general stuff to know about QA/Test go here http://www.softwareqatest.com/

  10. #10
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    Re: QA, a cost or profitable activity?

    jason_m

    Part of selling is reputation, so in reality your selling quality as a part of a solution.

    Your thinking Cash Flow versue Revenue, poor quality will result in less revenue then less cash flow.

    Mercedes has a reputation for quality and safety, hence the big bucks they charge. They are in effect selling the quality engineering at top dollar. Mitsubishi has a bad reputation WRT quality in Japan and have suffered for it it in loss of revenue and cash flow.... many of their operations are in serious trouble.

    We have ABC accounting maybe we need Quality Accounting applying a value to a product based on its reputation versus a less reputable product !
    Robert Tehve
    rtehve@bigpond.com

 

 
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