The structure and value of modularity in software design

The concept of information hiding modularity is a cornerstone of modern software design thought, but its formulation remains casual and its emphasis on changeability is imperfectly related to the goal of creating added value in a given context. We need better explanatory and prescriptive models of the nature and value of information hiding. We evaluate the potential of a new theory---developed to account for the influence of modularity on the evolution of the computer industry---to inform software design. The theory uses design structure matrices to model designs and real options techniques to value them. To test the potential utility of the theory for software we apply it to Parnas's KWIC designs. We contribute an extension to design structure matrices, and we show that the options results are consistent with Parnas's conclusions. Our results suggest that such a theory does have potential to help inform software design.