A recent McKinsey Quarterly article (registration required) “The next generation of in-house software development” describes how some pioneering banks, pharmaceutical and media companies have taken a lead from software product developers and turned elements of their custom-application support into packaged products that can be reused in multiple applications.

The headline benefits they’ve reported include:

• A 30% reduction in the cost of managing applications
• A 60-80% reduction in application development times (from conception to deployment)

Although it doesn’t explicitly use the term, the article describes how these companies are using a Software Product Line approach, where a core set of reusable assets - code, documentation, processes, are developed once and reused many times in multiple similar applications. An example is given, where around 60% of a company’s applications accounting for 80% of its application budget are addressed by only 5 product lines (which they term archetypes) with an increase in these percentages predicted as new applications are required.

One final point the authors make is that this approach is best suited to in-house development organisations which have a rapidly-changing portfolio of applications such as those in banks and media companies, rather than those in businesses where change is slower.