NIST Says Software Bugs Cost U.S. Almost $60 Billion a Year

Software errors are so prevalent and detrimental they cost the U.S. economy an estimated $59.5 billion annually, or about 0.6% of the gross national product, according to a recently released study by the National Institute of Standards and Technology (NIST).

NIST says the report, "The Economic Impacts of Inadequate Infrastructure for Software Testing," indicates more than half the costs are borne by software users and the remainder by developers and vendors.

The study also found that although all errors cannot be removed, more than one-third of the costs could be eliminated by an improved testing infrastructure that enables earlier and more effective identification and removal of defects.

For a copy of the report, call 301-975-2667 or download it from www.nist.gov/director/progofc/report02-3.pdf.

ISO 9000 Gets Credit
For Financial Performance

U.S. publicly held companies traded on the New York Stock Exchange that are certified to the ISO 9000 quality standards show significant improvement in financial performance compared to those that have not pursued the standard, according to a recent report in Manufacturing News.

The study's researchers, who are from the University of California at Los Angeles, the University of Maryland and the Universidad Carlos III in Madrid, Spain, report a direct correlation with a firm's return on assets. Their findings include the following:

  • Firms that failed to seek certification experienced substantial deterioration in return on assets, productivity and sales, while certified companies avoided such declines.

  • Firms that received certification did not, on average, see their absolute performance improve but did see substantial improvement compared to their uncertified peers.

  • For chemical companies in the two years prior to certification, the relative difference in return on assets between certified and uncertified firms was less than 5%; three years after certification the difference was 12%.

  • Immediately after deciding to seek certification, chemical firms experienced a productivity improvement while noncertified firms saw no such improvement and, in fact, eventually experienced a gradual decline.

  • Even more pronounced improvements were seen in industrial machinery and computer firms.

  • There were even greater financial improvements for companies that received multiple certifications than for those that received only one.

To read the complete Manufacturing News article, go to www.manufacturingnews.com/news/02/0830/art1.html. For more information on the yet to be published paper, e-mail dkirsch@rhsmith.umd.edu or charles.corbett@anderson.ucla.edu.

Columbia's Deming Center Announces Annual Award

The Deming Center at Columbia University has announced an annual award to recognize global companies with more than $500 million in annual sales (U.S. dollars) for operational excellence and creation of shareholder value through strategic growth.

The award's stated purpose is to promote awareness of the importance of revenue optimization to achieving sustainable competitiveness, disseminate understanding of the requirements for next generation operational performance excellence, share best practice information and serve as a working tool for managing performance through better planning and IT that results in market success and sustained improvement.

For more information, visit www.demingcenter.com.

ISO 9000 Product Support Initiative Features Web Help

The product support initiative (PSI) of ISO/Technical Committee 176 has added Web materials to provide measurements of ISO 9000 implementation experiences and a survey to solicit feedback for the next revision, scheduled for 2005.

The website has an online newsletter called ISO Curves and question and answer pages with advice from experts on transitioning from the 1994 to the 2000 version of the standard. The survey is expected to obtain quantifiable measurements on the experiences of organizations implementing ISO 9001:2000.

Future information on the site will include case studies with in-depth material about the conformance process for a wide variety of organizational sizes, product categories and industries, and a program to help organizations during implementation.

The PSI information is available at http://standardsgroup.asq.org/news/psi/index.html.

Senior Execs Say Quality Data Critical to Shareholder Value

Senior executives of multinational companies based in the United States and Western Europe recognize nonfinancial measures like customer satisfaction and product quality are critical to how financial markets value their companies since they are the leading indicators of bottom-line financial results.

This information was confirmed in a recent Price-waterhouseCoopers (PwC) Management Barometer survey, in which financial and nonfinancial performance measures were ranked as "high interest" by 60% of U.S. survey respondents and 58% of those in Western Europe.

"These top executives have a common priority--identifying, measuring and monitoring the value drivers that are most important to future shareholder return," said Robert Eccles, co-author with PwC CEO Samuel A. DiPiazza of Building Public Trust: The Future of Corporate Reporting (John Wiley & Sons, 2002).

The survey asked executives to rank their business information priorities for the next 12 months.

11 in Finals for Baldrige; Winners To Be Named Later This Month

In the final review stage for the 2002 Malcolm Baldrige National Quality Award, 11 of the 49 organizations who applied are receiving site visits from teams of experts.

Each site visit team includes six to eight members of the award's private sector board of examiners. Judges will review the teams' findings, and the Department of Commerce is expected to announce the winners later this month.

All 49 applicants receive an extensive feedback report highlighting strengths and improvement opportunities.

The National Institute of Standards and Technology manages the award for the Department of Commerce, with ASQ providing administrative support.

DRUG ERROR REPORT. A recently published study of hospitals and nursing homes in Colorado and Georgia reveals an average of more than 40 potentially harmful drug errors daily. The study was conducted in 1999, and the results were published in the Sept. 12 issue of the American Medical Association's Archives of Internal Medicine.

SPEEDERS BEWARE. The National Institute of Standards and Technology has developed calibrator/simulator units that will certify the performance and accuracy of across-the-road traffic radar guns. These radar guns provide easier concealment, better differentiation between vehicles and automated identification using photo equipment. They include nothing that will trigger a radar detector.

NEW IAF HEAD. John Owen became corporate secretary of the International Accreditation Forum (IAF) following its annual meeting in late September. He replaces Noel Matthews, who has retired. Owen, an Australian engineer, has been involved in the writing of quality and environmental management standards.

BALDRIGE QUESTIONNAIRE NOW EN ESPANOL. The Malcolm Baldrige National Quality Award questionnaire "Are We Making Progress?" is now being offered in a Spanish version. The questionnaire, designed to help senior leaders assess how their organizations are performing, is available at www.quality.nist.gov/Progress.htm.

PATIENT SAFETY STUDY. URAC, an accreditor of health and managed care organizations, has received a grant from the Robert Wood Johnson Foundation to study patient safety practices in utilization management (UM) programs. The study's goals include identification of flags or triggers embedded in UM software that may indicate a possible adverse event or need for further investigation.

TIRE SAFETY. The federal government is expected to release a list of new tire safety rules this fall. The proposed testing standards will require tires to run faster, longer and at hotter temperatures. The National Highway Traffic Safety Administration says the new regulations could save 27 lives and prevent 667 injuries annually.

SBA LAB SIZE STANDARD. The U.S. Small Business Administration (SBA) has increased its size standard for the testing laboratories industry from $6 million in average annual receipts to $10 million to better define eligibility for SBA assistance programs.

Average Rating


Out of 0 Ratings
Rate this article

Add Comments

View comments
Comments FAQ

Featured advertisers