Cost estimation based on business models

Software development requires early and accurate cost estimation in order t o enhance likely success. System complexity needs to be measured and then c orrelated with development effort. One of the best known approaches to such measurement-based estimation in the area of Information Systems is Functio n Point Analysis (FPA). Although it is reasonably well used in practice, FP A has been shown to be formally ambiguous and to have some serious practica l deficiencies as well, mainly in the context of newly emerged object-orien ted modeling approaches. This paper reports results from an empirical study undertaken in Swiss industry covering 36 projects. We observed that a new formally sound approach, the System Meter (SM) method, which explicitly tak es reuse into account, predicts effort substantially better than FPA. (C) 1 999 Elsevier Science Inc. All rights reserved.