Performance Measures for the Product Development Process In order to judge the performance of the product development process

four set of measures were proposed:

a) Cost Based Measures-It assesses the cost impact during the design process and the impact after
the design is approved. b) Design Effectiveness-Used for assessing design effectiveness. c) Strategic Measures-It is used for assessing the performance of a product development process. d) Market Impact: It pertains to the nature of the impact a product development process can create in the market. Management Accounting Tools for Product Development Traditional cost accounting and control aspects focus on the cost of products and services at the manufacturing stage. But recent developments in the field of management accounting have shown that the final cost of products and services offered to customers is to large extent determined at the design stage. In purview of this management accountants have proposed two methods: life cycle costing and target costing. a) Life cycle costing: It is a methodology that focuses on cost and control aspects of a product or service throughout its life cycle. It can be further classified as committed cost and incurred cost. Committed cost means no matter the when the cost is incurred, the amount that was incurred is fixed much earlier. For example, the moment design of a product is finalized one can estimate how much the cost of the product will be once manufacturing commences. Second type of cost is incurred cost which denotes the actual cash outflow with respect to manufacturing the product. Also 95% of the cost of the product is committed even before the first unit rolls out of the manufacturing facility. b) Target costing: Target costing is a methodology and an organizational mechanism to identify cost reduction methods and keep a check so that the product is designed and manufactured within the set target. Traditionally organizations have been managing the cost of products using the cost plus method. In Cost plus approach organizations incur certain costs for manufacturing a product. In other words, Price=Cost+Margin. However in recent times, as competitions have intensified organizations require a certain margin to remain in business and continue to invest in technology. Therefore the equation is now reversed to Cost= Price- Margin.

Software Product Development

The process of delivering a software product right from the inception of an idea to the delivery of the final software to the customer is called software product development. A software development process consists of four stages: requirement analysis, design, development and testing and delivery. a) Requirement analysis: It is the process of specifying requirements by studying user needs and systematically analyzing and refining the specifications. Most of the times deficient requirements analysis is a major cause of software project failure and thus identifying the exact requirements is the most difficult part of a software product development process. b) Defining requirements: After the requirements have been identified, the software development process involves various levels of design. Design produces a complete and precise specification of the software to be developed. It defines the principal parts of a software package, describes how they are integrated to produce the final software. c) Development stage: It is during the development stage that the actual code is delivered to the customer as running system is developed. In this stage, actual programs are written using programming languages and the output of this phase is an implemented and tested collection of modules. d) Testing stage: After all the modules have been developed and tested individually all modules are integrated and tested as a whole system. As it is the last stage of development process the team needs to ensure that quality of the product is as per customers requirements. Also care has to be taken that the product is delivered to the customer on time. Various software development models like linear sequential model or the waterfall model, the prototyping model, the rapid application development (RAD) model , the incremental model, the spiral model and the concurrent development model to name a few are some of the widely used models. Waterfall method: The waterfall model shows a process, where developers are to follow the lifecycle phases.In a strict Waterfall model, after each phase is finished, it proceeds to the next one. Reviews may occur before moving to the next phase which allows for the possibility of changes (which may involve a formal change control process). Reviews may also be employed to ensure that the phase is indeed complete; the phase completion criteria are often referred to as a "gate" that the project must pass through to move to the next phase. Waterfall discourages revisiting and revising any prior phase once it's complete. This "inflexibility" in a pure Waterfall model has been a source of criticism by supporters of other more "flexible" models. Agile: Agile software development uses iterative development as a basis but advocates a lighter and more people-centric viewpoint than traditional approaches. Agile processes use feedback, rather than planning, as their primary control mechanism. The feedback is driven by regular tests and releases of the evolving software.

RAD: Rapid application development is a software development methodology that involves methods like iterative development and software prototyping. According to Whitten (2004), it is a merger of various structured techniques, especially data-driven Information Engineering, with prototyping techniques to accelerate software systems development.[1] In rapid application development, structured techniques and prototyping are especially used to define users' requirements and to design the final system. The development process starts with the development of preliminary data models and business process models using structured techniques. In the next stage, requirements are verified using prototyping, eventually to refine the data and process models. These stages are repeated iteratively; further development results in "a combined business requirements and technical design statement to be used for constructing new systems".[1] RAD approaches may entail compromises in functionality and performance in exchange for enabling faster development and facilitating application maintenance. Prototype model: The process of prototyping involves the following steps 1. Identify basic requirements Determine basic requirements including the input and output information desired. Details, such as security, can typically be ignored. 2. Develop Initial Prototype The initial prototype is developed that includes only user interfaces. (See Horizontal Prototype, below) 3. Review The customers, including end-users, examine the prototype and provide feedback on additions or changes. 4. Revise and Enhance the Prototype Using the feedback both the specifications and the prototype can be improved. Negotiation about what is within the scope of the contract/product may be necessary. If changes are introduced then a repeat of steps #3 and #4 may be needed. Iterative model: The basic idea behind the agile method is to develop a system through repeated cycles (iterative) and in smaller portions at a time (incremental), allowing software developers to take advantage of what was learned during development of earlier parts or versions of the system. Learning comes from both the development and use of the system, where possible key steps in the process start with a simple implementation of a subset of the software requirements and iteratively enhance the evolving versions until the full system is implemented. At each iteration, design modifications are made and new functional capabilities are added.