Quality Certification and the Economics of Contract Software Development A Study of the Indian Software Industry

A significant amount of software development is being outsourced to countries such as India. Many Indian software firms have applied for and received quality certifications like the ISO9001, and the number of quality certified software firms has steadily increased. Despite its growing popularity among Indian software developers, there is very little systematic evidence on the relationship of ISO certification to organizational performance. Using data on 95 Indian software firms and their US clients, we develop a stylized model of a firm that develops software for others to articulate the different ways in which ISO certification can affect firm profits. We conclude that ISO certification enhances firm growth. The results provide partial support for the proposition that ISO certification also enhances revenue for a given size, suggesting that firms are receiving a higher price per unit of output. In turn, this is consistent with the notion that ISO certification also enhances the quality of output. Our field studies confirm that although most firms see ISO certification as a marketing ploy, some of them do proceed to institute more systematic and better-defined processes for software development.

Why Do Commercial Firms Open The Source Code Of Their Products?

This paper is concerned with the economic trade-offs associated with open-sourcing, the business strategy of releasing the source code of a commercial software product. We model open-sourcing as a strategic option for firms that compete in the market for software products. At the core of our model is the effect of open-sourcing on customer values, as well as the relative ease of customizing the open-source products. We show that open-sourcing can arise as an equilibrium outcome in our two-stage game. If the enhancement of customer value from open-sourcing is moderate or high, in equilibrium firms may find it optimal to release the source code of their commercial software products even when this strategy may reduce their profits

The need for effort estimation models for open source software projects

Open source software(OSS), be it products or tools, are being adopted at a fairly rapid pace in commercial organizations. In fact many firms such as IBM and Sun are even ‘opening ’ up their once proprietary software products and making the source code available. This phenomenon may have a profound effect on the various software engineering methodologies and practices as well as project management activities. Given the difficulty in managing resources in closed source projects, planning and delivery for OSS projects will be an even bigger challenge. In this position paper, we describe the need for new effort estimation models for the development of OSS projects and how this will be required for future project management activities. We outline some of the guidelines to build these cost estimation models and some issues that arise in the verification and validation of these cost models

Quality Certification and the Economics of Contract Software Development: A Study of the Indian Software Industry

A significant amount of software development is being outsourced to countries such as India. Many Indian software firms have applied for and received quality certifications like the ISO9001, and the number of quality certified software firms has steadily increased. Despite its growing popularity among Indian software developers, there is very little systematic evidence on the relationship of ISO certification to organizational performance. Using data on 95 Indian software firms and drawing upon site visits and interviews with Indian software firms and their US clients, we develop a stylized model of a firm that develops software for others to articulate the different ways in which ISO certification can affect firm profits. We conclude that ISO certification enhances firm growth. The results provide partial support for the proposition that ISO certification also enhances revenue for a given size, suggesting that firms are receiving a higher price per unit of output. In turn, this is consistent with the notion that ISO certification also enhances the quality of output. Our field studies confirm that although most firms see ISO certification as a marketing ploy, some of them do proceed to institute more systematic and better-defined processes for software development

PLEASE DO NOT CITE WITHOUT PERMISSION The Indian Software Industry

This paper reports on the results of research on the Indian software industry, carried out at Carnegie Mellon University. We use a variety of sources, including a questionnaire survey of Indian software firms, and field visits and interviews with industry participants, observers, and US based clients. The Indian software industry is remarkable in a number of respects. It is service rather than product oriented, heavily export oriented, and is largely managed by professional and entrepreneurial managements. Also, domestic market experience and expertise appears to have very little benefits for successful importers. Although the industry has grown in spectacular fashion, sustaining this performance will pose a number of challenges. In order to counteract the widely reported shortages of skilled software professionals and the possible competition from other low wage, human capital rich countries, Indian firms are trying to move up the value chain by acquiring deeper knowledge of business domains and management capability, and to reduce costs by developing superior methodologies and tools. Whether firms will succeed will depend critically on their management skills and willingness to invest along a number of dimensions. From a social perspective, the disconnect between domestic and export markets is a major challenge, but one that the growing diffusion of computers and the improvement of the communication infrastructure should make easier to confront. In the end, the greatest impact the software industry is likely to have on the Indian economy is indirect, in its role as an exemplar of the new business organisational form and as an inspiration to other entrepreneurs. 1