Quality Cost Analysis: Main types of Costs Associated with Software Products

Quality costs are the costs spent on preventing, finding and fixing incorrect work. These costs take up 20-30% of sales. But you can decrease or completely avoid the consumptions. One of the primary duties of a Software Tester is the reduction of the total cost of quality related with a product.

There are some types of costs, associated with software products:

Prevention Costs

Costs of preventing coding and design bugs, errors in the user manuals, bad documentation or inapplicable code. Most of the prevention costs are wasted from the budget of the programming, design, and marketing group but not Testing.

The most widespread examples of quality costs associated with software products are:

  • training of the staff
  • requirements and usability analysis
  • early prototyping
  • fault-tolerant design
  • defensive programming
  • accurate specification and internal documentation
  • evaluation of the reliability of the product.

Appraisal Costs

Costs which are aimed for design review, code inspection, test automation, pre-release of customers, training testers and glass box, black box, beta and usability testing. Design reviews are used for averting and evaluation. When you're looking for errors in the design, you're doing an evaluation and when you're looking for ways to strengthen the design, you are doing averting.

Failure Costs

They are the costs of fixing and dealing with clients complaints.

Internal Failure Costs

Failure costs emerged before providing products to the customers. Internal failure costs arise outside of Product Development. If errors block the work of somebody in the company, the costs of the wasted time, the missed points, and the overtime to get back onto the original scheme are all internal failure costs.

There are such Internal Failure Costs:

  • bug fixes
  • regression testing
  • wasted user
  • testers and marketers time
  • wasted advertisements
  • direct and potential costs of a late dispatch.

External Failure Costs

Failure costs emerge after the supplying of product to the customer.

They are costs of:

  • preparation of support documentation
  • technical calls
  • investigation of customer complaints
  • refunds and recalls
  • coding and testing of interim releases
  • dispatch of updated product
  • supporting multiple versions
  • discounts to stimulate resellers to keep selling the product
  • warranty and liability costs
  • government investigations and others.

External failure costs are huge, that’s why it is much cheaper to fix problems before dispatch the corrupted product to clients.

You should pay more attention to some of the expenses. For instance, the cost of the efforts to soften the publicity results of bugs is probably not a big part of the project budget. It is impossible to aim the whole project budget to the quality-related costs. But money which is spent to cope with bad publicity due to errors is a failure cost.

Total Cost of Quality

It is calculated as the sum of all costs: Prevention + Appraisal + Internal Failure + External Failure.