Software Assets Valuation
Significance of software assets valuation
Software valuation consists in determining the value of a software system by taking a number of factors as a basis, including: the source code, documentation, technology, quality, etc. Thanks to our valuation service, our customers obtain an independent valuation report specifying the effort and cost parameters for a specific software product.
There are certain factors that make software a special asset to value:
- It is intangible in nature.
- Once developed, it is easily replicable making exact copies at a reduced price.
- Quality is a very important factor, since poor quality software can lead to serious economic and even personal losses.
Alarcos Quality Center performs software assets valuation based on replacement costs, ie, the costs in which a company would incur in the event of having to develop a new replacing software with the same characteristics.
Working with this type of replacement costs requires to conduct studies on historical trends, and the use of estimation models that, based on the characteristics of the software asset and on correction factors, provide size, effort and cost estimations for the software asset.
The phases of this type of project are:
- Estimation of the functional size of the application, using software engineering techniques such as Function Points, Use Case Points, Backfiring, etc.
- Analysis of technological, environmental, temporal factors, etc.
- Cost estimation for the software asset.
- Research of effort and costs charged to actual development.
- Analysis and comparison of results.
- Issue of the valuation report.
Benefits for our Clients
The main benefits that companies get from the valuation of their software assets are:
- Justify the purchase or sale of a software asset.
- Expert testimony on litigations related to software assets (shareholder disputes, justifications of project costs, etc.).
- Help managing organizational risks by identifying the most valuable assets in order to make the right decisions.
- Get funding, loans, guarantees, etc. thanks to the guarantee of the asset's value.
Interested in Software Assets Valuation?
Alarcos Quality Center has participated in many software assets valuation projects in different sectors (banking, insurance, public administration, management applications, etc.), reaching a 100% success rate in valuation reports aimed for the customers themselves and for third parties.