Lean Accounting Comes to Lean Software Development

Abstract

I argue that lean software development firms become more productive if they align their lean managerial accounting systems and lean software development processes. I conduct an experiment on software development teams that have used lean and agile software development practices. A treatment group is re-trained in lean software development practices, and after three months, the productivity of the treatment group is compared to that of a control group that did not receive this re-training. This first phase (Phase 1) estimates the productivity improvements from using lean software development practices. Results from Phase 1 indicate that these practices shorten average production time by 80% in software development. In the second phase (Phase 2), a treatment group will be exposed to new lean management accounting measures for three months while a control group will only see existing reported metrics. Software development productivity will be measured for both groups before and after this exposure to evaluate the impact of the treatment. I will also survey both groups before and after treatment to evaluate how lean management accounting measures affect employee engagement and empowerment. The experimental site is a large publicly traded software firm that uses lean and agile software development practices.