Tag: IT


New Challenge in the Software Industry

July 28, 2017

Software

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During the past 30 years the world went through a very dynamic technological transformation. In retrospective, it can be stated without exaggeration that the emergence of electronic devices and the Internet have greatly impacted daily life as well as managerial practice to an unforeseen extent. The computerization of multiple business processes and the creation of large scale databases, among many other radical technological advances, have lead to enormous cost savings and quality improvements over the years. The interconnection of financial markets through electronic means and the worldwide adoption of the Internet have greatly reduced transaction and communication costs and brought nations and cultures closer to one another than ever imaginable. Computers are now fundamental tools in almost all businesses around the world and their application and adaptation to specific business problems in the form of software development is a practice that many companies perform on their own. In the past, such computerization and automation efforts were very costly and therefore only practiced by large corporations. Over the years, however, the software industry emerged to offer off-the-shelf solutions and services to smaller companies. Today, having survived the massive dotcom crash of the year 2000, software development businesses established themselves as strong players in the technology industry.

The emergence of numerous computer standards and technologies has created many challenges and opportunities. One of the main opportunities provided by the software sector is relatively low entry barrier. Since the software business is not capital intensive, successful market entry largely depends on know-how and specific industry domain knowledge. Entrepreneurs with the right skills can relatively easily compete with large corporations and thereby pose a considerable threat to other, much larger organizations. Companies, on the other hand, need to find ways to reduce turnover and protect their intellectual property; hence, the strong knowledge dependence combined with the relatively short lifespan of computer technologies makes knowledge workers very important to the organization. Knowledge workers in this industry therefore enjoy stronger bargaining power and require a different management style and work environment than in other sectors, especially those industries that have higher market entry capital requirements. This relatively strong position of software personnel challenges human resource strategies in organizations and it also raises concerns about the protection of intellectual property.

The relatively young industry is blessed with sheer endless new opportunities, such as the ability of companies to cooperate with other organizations around the globe without interruption and incur practically no communication costs. In addition, no import tariffs exist making the transfer of software across borders very efficient; however, the industry with its craft-like professions suffers from lack of standards and quality problems. The successful management of such dynamic organizations challenges today’s managers as well as contemporary management science because traditional management styles, such as Weberian bureaucracies, seem to be unable to cope with unstable environments.

Challenges in the Software Industry

Many studies indicate that present-day software development practices are highly inefficient and wasteful (Flitman, 2003). On average, projects are only 62% efficient, which translates to a waste of 37 %. The typical software development project has the following distribution of work effort: 12% planning, 10% specification, 42% quality control, 17% implementation, and 19% software building (2003). There are many possible interpretations of the nature of this distribution of resources. First, the extraordinarily high share of 42% for quality control purposes can indicate a lack of standards and standardized work practices. This large waste of effort may also be the result of inefficient planning and specification processes. Because the share of 19% for software building is a function of software complexity, hardware, and tools used, there is a chance to reduce it by carefully managing and standardizing internal work processes. The disappointing share of only 17% for implementation, however, should be alarming to business owners, since implementation activities are the main activity that results in revenue. The relatively low productivity level reported by Flitman (2003) seems to be also reflected in the fact that the average U.S. programmer produces approximately 7,700 lines of code per year, which translates to just 33 per workday (Slavova, 2000). Considering that a large software project, such as Microsoft Word, is reported by Microsoft to require 2 to 3 million lines of code, it becomes obvious how costly such projects can become and that productivity and quality management are major concerns to today’s software businesses. The challenge for contemporary software managers is to find the root of the productivity problem and a remedy in the form of a management practice.

A plethora of recent studies addresses software development productivity and quality concerns. Elliott, Dawson, and Edwards (2007) conclude that there is a lack of quality skills in current organizations. Furthermore, the researchers put partial blame on prevailing organizational cultures, which can lead to counterproductive work habits. Of the main problems identified, project documentation was found to be lacking because documents are deficient in detail and not updated frequent enough. Quality control in the form of software testing is not practiced as often and there seems to be a lack of quality assurance processes to ensure that software is built with quality in mind from the beginning. Organizational culture was found to be deficient in companies were workers tend to avoid confrontation and therefore avoid product tests altogether (2007).

Since knowledge workers are the main drive in software organizations, creating a fruitful and efficient organizational culture constitutes a main challenge to today’s managers. The relationship between organizational culture and quality and productivity in software businesses was recently investigated by Mathew (2007). Software organizations tend to be people-centered and their dependency on knowledge workers is also reflected by the enormous spending remuneration and benefits of more than 50% of revenue. As the industry matures and grows further, the challenge to organizations is that larger number of employees need to be managed which brings culture to the focus of management. Mathew (2007) found that the most important influence on productivity was achieved by creating an environment of mutual trust. Higher levels of trust lead to greater employee autonomy and empowerment, which strengthened the existing management view that trust and organizational effectiveness are highly related. Those companies with higher trust and empowerment levels benefitted from more intensive employee involvement and thereby achieved better quality products (2007).

Product quality, however, depends on other factors as well that reach beyond the discussion of work processes. Relatively high employee turnover was found to have a detrimental effect on product quality and organizational culture (Hamid & Tarek, 1992). Constant turnover and succession increase project completion costs, cause considerable delays, and expose organization to higher risks because their development processes can be severely disrupted. While human resources strategies should help find ways to retain key personnel in the company, organizations need to nevertheless be prepared for turnovers and minimize their risks. One of the greatest risks for people-centered, knowledge worker organizations is the loss of knowledge when employees leave.

Knowledge management has evolved into a relatively new discipline in the last two decades but is mostly practiced by large, global organizations only (Mehta, 2008). As corporations realized the importance of knowledge management activities to mitigate the risk of know-how loss within their organizations, they started employing chief knowledge officers and crews with the goal of collecting and organizing information. By building custom knowledge management platforms, companies can benefit from increased transfer, storage, and availability of critical business information. Such activities can help companies innovate and build knowledge capital over time (2008). The challenge remains, however, to set up such systems and to elicit employee support for knowledge management systems. In addition, these systems leave another critical question open. What happens when top performers take all the knowledge with them when they leave?

Another crucial variable affecting software product and service quality is top management involvement. Projects in the software industry commonly fail due to one or a combination of the following three major causes: poor project planning, a weak business case, and lack of top management support and involvement (Zwikael, 2008). Software projects are similar to projects in other industries by focusing on timely project completion, budget, and compliance to specifications, the industry requires specific support processes from top management to facilitate projects. These processes are summarized in Table 1. Key support processes, such as the appropriate assignment of project managers and the existence of project success measurement, indicate that successful companies demonstrate a higher level of project progress control than others; however, Zwikael acknowledges that top managers rarely focus on these key processes and instead prefer to deal with those processes that are easier for them to work on personally.

Table 1

The ten most critical top management support processes in the software sector (Zwikael, 2008). Those processes marked with an asterisk (*) were found to be the most important.

Support Process

Appropriate project manager assignment *

Refreshing project procedures

Involvement of the project manager during initiation stage

Communication between the project manager and the organization *

Existence of project success measurement *

Supportive project organizational structure

Existence of interactive interdepartmental project groups *

Organizational projects resource planning

Project management office involvement

Use of standard project management software *

Opportunities in the Software Industry

The advent of low cost communication via the Internet and the diversification of the software industry into many different branches brought a multitude of new market opportunities. Some of the main opportunities are rooted in the low costs of communication, while others originated from the possibility of geographic diversification and international collaboration.

One major opportunity which especially larger organizations seek to seize is geographic diversification in the form of globally distributed software development. Kotlarsky, Oshri, van Hillegersberg, and Kumar (2007) have researched this source of opportunities that is mainly practiced by multinational companies; however, an increasing number of small companies is also reported to be benefitting from dispersed software development across national boundaries. The study revealed that software companies can achieve significantly higher levels of productivity by creating reusable software components and reducing task interdependencies. By reducing interdependence, the produced modules are more likely to become useful in future projects on their own; furthermore, this reduction of intertwined computer code also has a positive effect on project teams. Teams in companies that globally distribute their developments benefit from increased autonomy and reduced communication requirements. The authors point out, however, that the prerequisites to distributing software development are not only good project planning but also the standardization of tools and development procedures. Without such prearrangements it may become almost impossible to manage and consolidate the various distributed team activities (2007). Especially for teams working across countries away from one another, it may pay off to deploy video or other Internet-based conferencing technologies and exploit huge savings potentials. But are these means of communication effective?

In the last decade a new form of organization has emerged that has taken the most advantage of the Internet. Virtual organizations exist entirely in cyberspace and their team members communicate mostly, if not exclusively, via the Internet using webcams and messaging software. The challenge for managers in virtual organizations is to exploit the new technology but also to find ways to motivate and direct the workforce and work processes. A study by Andres (2002) compared virtual software development teams with face-to-face teams and identified several challenges and opportunities for virtual managers. Managing work from a different time zone can be problematic due to the lack of physical presence. Communication will need to be asynchronous or can only occur at work hours that overlap in both time zones. Virtual teams facilitate this process by using email and voice/text messaging but more importantly by reducing the interdependency of tasks. Andres (2002) suggested that these types of communication have lower “social presence” meaning that humans have a need and ability to feel the presence of others in the group. The problem with many computerized communication channels is that visual clues, utterances, body language clues and clues from the person’s voice are missing. When placed on a social presence continuum, the various communication types rank as follows from the lowest to the highest: email, phone, video conferencing, and face-to-face meetings. Andres’ comparison between development teams using video-conferencing versus face-to-face meetings revealed that the latter group was far more efficient and productive, even though the video-conferencing team benefitted from reduced travel costs and time.

The study conducted in 2002, however, has several shortcomings. First, it is already seven years old and Internet costs have dropped and speeds have improved significantly since then. Considering the improvements in video quality and availability and computer speeds, this form of communication became more feasible recently. In addition, today’s managers are just now starting to learn how to use these means of communication efficiently. For example, even though email technology has been around for two decades now, many managers still find that emails can create a lot of ambiguity. The challenge to future generations of managers will be to change their writing style to match the limitations of email and other text messaging technologies. Another important factor to consider is that written communication may be stored indefinitely and have legal consequences; hence, more often than not, managers may intentionally prefer to avoid such communication channels for political or legal reasons. The study by Andres (2002), however, resulted in a negative view of video conferencing probably because the technology was not yet matured and the team members were not yet comfortable with it.

For video conferencing to work well, all participants need to be knowledgeable of the peculiar characteristics of that technology and adjust their communication style and speech accordingly. Regardless of meeting type, another important factor is preparation. What could be researched in conjunction with Andres’ study in the future is the degree of preparation of the group. Do team members invest enough time in preparing questions and answers for their teammates before coming to the meeting? Video conferences may require more preparation than face-to-face meetings in some circumstances.

Another opportunity for software businesses and challenge for managers worldwide is outsourcing. In the year 2007, $70 billion were spent globally for outsourced software development (Scott, 2007). Given the extreme shortage of IT skills in the U.S. and Europe, many companies take advantage of globalization by choosing international suppliers for their software development tasks. Outsourcing, however, requires elaborate coordination between the organization and its many supplier groups. The idea is that in total, coordination costs and problems are less costly than in-house development; however, this goal is not always achieved. While outsourcing, when it is deployed and coordinated correctly, can result in 24 hour development worldwide and thereby provide continuous services to the organization around the clock, it may result in the loss of intellectual property. While mechanic parts are patentable in most countries that support intellectual property rights, software is not patentable in most countries outside North America.

In addition to the challenge of managing outsourcing, software organizations exploit technologies in various ways to save costs, for example by offering remote access, telecommuting, and service-oriented architectures (SOA) (Scott, 2007). Remote access and telecommuting has increased six-fold between 1997 and 2005 and resulted in $300 million annual savings due to a reduction of office space (2007). SOA is a similar concept and involves a software rental for customers. Instead of buying, installing, and maintaining software and servers, customers can rent a service online and reduce the total cost of ownership because these activities are no longer required on the customer side. Gradually the virtualization of the software business opens new horizons and provides further opportunities but it also presents managers with endless challenges.

Some of the strengths and weaknesses of offshore and virtual team development were studied by Slavova (2000). In the year 2000, India and Ireland were the largest offshore software development locations. Offshore companies can offer up to 60% cost reduction, a faster completion of development tasks by distributing them around the globe, and specific domain knowledge which they acquired over the years providing similar services to other customers. The integration of work from external sources, however, constitutes a major hurdle. Furthermore, language and cultural issues can cause serious communication problems that put the project at risk, especially when misunderstandings cause misinterpretations of project specification documents. Slavova (2000) found that the most common remedy and strategy avoiding problems with offshore suppliers is to visit them frequently face-to-face; however, this tactic results in higher travel costs and disruptions of the managers’ workflows and hence may offset the benefits gained for outsourcing altogether. Managers in the software business need therefore to balance the risks and opportunity potentials before engaging in outsourcing because for many companies this strategy failed to pay off in the end.

A huge opportunity that emerged in the last decade is online innovation. The collective innovation effort of many individuals and companies is generally known as open-source on the Internet and it has lead to many advances in the computer technology, such as the free Linux operating system. At first businesses felt threatened by this wave of developments on the market because the businesses perceived that open-source solutions were in competition with their products. In many cases this was and still is in fact true; however, a couple of companies, including IBM, are exploiting this new way of innovation for their own and for a common benefit (Vujovic & Ulhøi, 2008). Because software companies operate in an increasingly instable environment, they struggle to create continuously new and better products. By exposing the computer code to the public on the Internet, companies can benefit from ideas submitted by the public, especially other companies. Furthermore, companies benefit from free bug finding and testing by external users but one of the primary reasons for “going open-source” is the quick adoption and spread of the company’s technology at a relatively little or no cost. The spread of IBM’s open-source technology, for example, is also free marketing for the company. But how can companies make money by offering something for free?

The closed innovation model (the traditional model of providing software without revealing the software code) can be combined with open-source, so the company can charge for the product. In other cases, the company can reveal the technological platform on the Internet for free and then sell specialized tools which utilize the new platform. The big money savers are obviously the shared development, testing, and maintenance costs since many interested parties work on the same project.

The knowledge-sharing model of open-source is nothing new, however. The philosophy and the benefits of open innovation models have been already realized in the third quarter of the nineteenth century. Back then, open innovation was practiced in the UK iron and

US steel industry. The cooperation of many industry players ended the domination of proprietary technologies for which costly royalties were due (Vujovic & Ulhøi, 2008). Given the dynamic environment of the IT industry and the short lifespan of computer technologies, the adoption of open innovation models gained much more popularity. By analyzing the largest open-source players in the market, Vujovic and Ulhøi put together a list of supportive strategies, which is shown in Table 2. Several of these strategies are quite relevant from a top management perspective as well, such as deploying open-source to block a competitor and using the open model as a gateway for greater market share.

Table 2

Strategies for adopting the open-source approach (Vujovic & Ulhøi, 2008).

Business Strategy

Obtaining higher market share

Obtaining market power

Better adoption of a product and thereby establishing standards

Shifting competitive advantage to another architectural layer

Making the product more ubiquitous

Delivering faster time-to-market

Spurring innovation

Complementing a revenue core stream

Blocking a competitor

Conclusion

Reviewing the rather recent emergence of the IT industry and the software industry in particular, several parallels can be drawn to management history. While Taylor’s scientific management was a highlight in the evolution of management science (Wren, 2005), the software industry seems to be lagging behind such great advancement. Due to its high level of complexity, the software development discipline is still plagued with quality problems stemming from a lack of standardization. Similar to Taylor’s efforts, managers need to analyze software development processes and develop industry-wide standards and measures. Once such measures and procedures exist, this will help make software projects much more predictable.

Much of today’s software industry practices would have been a déjà vu for Taylor, if he was still alive. In addition, the anomie and social disorganization concerns during the social person era apply today more dramatically than in the past. Mayo described in the 1940s how managers overemphasized on technical problems in the hope of raising efficiency ignoring the human social element (p. 296). The same situation is now evident to a larger degree in the computer industry. The rapid technological advances have created many opportunities and changed the work environment drastically. At the same time, however, management was unable to prepare for these dramatic shifts technology would bring to the workplace. At best, managers are simply reacting to technological advances because the consequences are mostly unpredictable given the complexity of human nature. For example, email brought several benefits such as low cost and simple asynchronous communication; however, many email messages are misunderstood because they are not written appropriately. Moreover, IT knowledge workers are struggling to keep up with the vast number of messages received per day as they constitute a severe disruption of the daily workflow.

As knowledge workers are becoming more and more essential to an organization’s survival and as organizations in this industry mature and require greater headcounts, the span of control is becoming an issue for managers to handle correctly. As discussed in Wren (2005), as the team size increases, the number of interrelations to be managed rises astronomically (p. 353). Managing larger teams poses a great problem because the sheer number of interrelations makes it also more difficult to develop trust within the team. Motivating large groups of knowledge workers can hence be tricky, especially because creative tasks can require a large degree of collaboration. Work design is hence a major hurdle for future managers to overcome. Much emphasis has been on hygiene factors and not on motivators of the workforce. Flexible hours, telecommuting, empowerment, and increased responsibility may help in the short-term but for the long-term management will need to find new strategies for retaining knowledge workers.

Product quality remains a big issue. Deming’s ideas are good but quality assurance in the software world is difficult to implement due to the lack of standards and measures. The open-source innovation model may provide some relief in this respect because the greater involvement of external developers can help improve overall quality. On the other hand, however, open-source projects are hard to manage for the same reason. Since open-source projects are self-directed and not owned by anyone in particular, those projects sometimes suffer from uncontrolled, tumorlike growth.

Several of Deming’s deadly sins (Wren, 2005, p. 463) apply directly to the software industry. Most products are made from scratch rather than from components and there is little standardization in software organizations. Since software developers have a tendency to see their job as a craft they defy standards and procedures. In addition, the rather complex environment with its dynamic requirements and the push for meeting deadlines make it easy for practitioners to lose sight of quality improvements through the preparation of organizational standards. High turnover and individual performance measures continue to be industry practice, even though many scientists, such as Deming, have argued for long that such measures are counterproductive.

Future managers need to find ways to compensate for the high turnover, if they cannot find a way to avoid it. The division of labor might work well for the company but it is not well perceived by the workforce which tends to require constant challenge. Top performers disfavor mundane tasks and prefer to walk away with all their knowledge. IBM has successfully deployed job enlargement for some time to combat this phenomenon (Wren, 2005, p.332). Unfortunately, this strategy might not work for every company and it can only be used within certain boundaries of the organization. Given the developments of the last two decades, managers will need to confront the discipline of knowledge worker management and find a workable solution for their organization.

The integration of management science with the advances in psychology and sociology may provide a route towards the solution of the knowledge worker management problem. It is crucial for managers to have an accurate understanding of the motivational drives for this particular group of the workforce. These employees enjoy higher income, greater flexibility and freedom, and greater bargain power. This puts them in a gray zone between the traditional, lower skilled employee and an owner in the company because knowledge workers create intellectual capital in the company. Because most of this capital is lost and remains with the employees when they decide to leave the organization, turnover can be much more damaging than with traditional workers. Managers can therefore not simply apply conventional strategies to this dissimilar group of employees; rather, they need to seek for more creative incentives for motivating and retaining knowledge workers.

 


The Process Of Software Development

June 20, 2017

Software

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Many business people don’t fully understand the complexity of a software development process. It’s natural, since specialized books about development are read by developers and other IT people, and many others might still be referring to a software project as ”coding” or ”writing”. With better luck one might add ‘designing’ and ‘testing’. Quite inaccurate.

One can think of several metaphorical comparisons to describe software development, such as writing a book or building a house. Some of them are a good light in the dark, some are rather misleading. And while many people may argue whether creating software is an art, a science, or a precisely elaborated process, we’d leave that choice to someone else. It cannot be described sparsely. But we’ll try to give some descriptions and comparisons in a compact and clear way.

Do We ”Write” Software?

One of the common but rather vague things is comparing creating software with writing. Writing code, writing a book, and so on. You can start writing a book without a plan and go with the flow; with custom software development you cannot, unless developers do a rather small piece of software on their own – and for themselves. Moreover, an outsourced software project never starts with writing code.

Books and software may both have strict deadlines. But once a book is published, what’s written is written; rewriting is not an option. But software keeps being under constant improvement with new versions being released – it’s a natural thing. It’s almost impossible to get every need of your end user, catch up with business and technological changes once and for a lifetime. Books aren’t that dependent on changes; software is. But that’s good: your software, unlike a book, can’t become just another mediocre thing on the market, can’t become irrelevant and outdated. The processes are absolutely different: we prefer using the words ”create” or ”build” software rather than ”write”.

Do We ”Grow” Software?

”Growing” software on a good basis and a good set of documentation is possible to a certain extent. Like with writing, it’s not the best description one can suggest. It partially gets the incremental, agile nature of making and maintaining relevant software. But while ”growing”, the product is rarely tasty until it’s ripe, and the owner has to wait awhile.

The difference is, in software development there are different stages of being ”ripe”. Startups usually demand rolling a minimum viable software product on the market, getting feedback and making corrections and improvements. Each version is more ”ripe” than its predecessor, and it has to be ”watered” by support and maintenance, kept fresh amidst all the business and technological changes.

Do We ”Build” Software?

This one is considered by many specialists the closest way to describe software development, and we can agree with that. Construction works show the huge importance of careful planning, preparing, guiding the work, and performing it. The limits of software depend on how its architecture is constructed. The amount of works doesn’t grow gradually, since every building is different, and requires different approach. There can be a hospital, an office building, a school or a barn, and same physical size doesn’t mean equal amount of labour. Something is done with concrete, something can be done with wood and nails, and the latter doesn’t work well with complex and valuable software for mobile startups and other businesses.

– Everything depends on the kind of a building you need. You need to figure out the problem the software will solve, and conduct the necessary preparations, do market research, gather info, etc. The more complex your software is, the more resources must be spent on planning. Bad planning – and the whole app fails, falls like a house of cards by the first gust of a wind.

– Then you and your chief architect (project manager) can proceed to design that perfectly combines functional requirements and interface, resulting in proper user experience. Sure you want those who will work or live in the building to be fully satisfied with it. Same thing with software. One more good thing, once the design is approved, it’s way easier to give more precise estimations for the remainder of the construction (development) works.

– When furnishing a house, you needn’t building things you can buy: household appliances and furniture. It’s much cheaper and way faster. Same with software: if your software development team is experienced, it will use all the available resources to stay away from writing needless basic things: there are lots of software toolkits, frameworks, classes, and libraries for that, each for a particular case. And if the team means business, they will easily find tools and technologies that will get your tasks done as fast as possible. Custom pieces of furniture take more time and efforts, but in most cases there are already existing pre-built ways to save your time and money without compromising security and efficiency of your software.

– There will always be changes in functional requirements. Again, changes can painlessly happen within the planned architecture. Here we once more emphasize the importance of preparations – although this topic is worthy of a separate article. And we cannot go anywhere without mentioning quality assurance, which constantly checks different aspects of how the software works. What’s more – even a minor change involves testing, so that’s not the place to cut the costs (in fact, QA usually takes about 30% of the whole development time).

– Optimization of software (inner walls of a building) is limited to the approved architecture, and here main expenses are all about labour, not materials. But what you receive in the end is better software and satisfied users. Meanwhile users speak their minds on what they would like the apartments to look – and one should never neglect these opinions.

– One more thing worth noting – a good architect (or a good creative expert in software development) is always ready to consult you on things that should be solved immediately, and what can be left for later without breaking your plans or the quality of your software. You are most likely to not know the subtleties of the technical side – so leave making suggestions and explanations to your team. Unless you are an experienced IT person and you needn’t reading this article to get these insights.

As you can see, the last example is really the closest, and the list of similarities can be continued forever. But the ones we presented here should be enough to understand the process of software development, which is impossible without patience, expertise of the team, and mutual understanding.

 


ERP and Enterprise Software Technology

May 11, 2017

Software

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As another year passed, the technology marketplace has been tumultuous in terms of adoption, trends, mergers and acquisitions. Large software players have broadened their portfolios and have started to target customers upstream and downstream from their typical customers. For the new year we have compiled a list of top technology trends – mostly for enterprise software. These trends include ERP, Social business, CRM, BI/EPM/Analytics, Collaboration, Project Failure/Success, Mobile and Security and others are the main areas of focus.

Looking back at the 2013 list of technology trends, most of them have come to pass and are still evolving as adoption continues to grow. Projects continue to fail, spending increases, infrastructures and applications are being remade using the cloud and other IT issues continue to appear and also be resolved.

Here is a list of what we think the top software trends will emerge in 2014.

1. Rise of BI/EPM/Analytic Vendors: This trend has become apparent as many new small start-ups have introduced some type of analytics or BI tool. We have seen very vertical specific solutions to broad all-encompassing software that can be customized by industry. A reason for this trend is that enterprise applications have become easier to integrate and require less technical knowledge to aggregate data out of a system. Organizations are requiring more real-time information, by implementing these systems unlocks the decision-making potential that is stored in the data.

2. Increased Consultant Use: This trend is a 180 from organizations wanting to bring back in-house technical expertise. CIO’s have committed to spending more money on contractors for the upcoming year and software selection is a key component of this spend. Other areas where organizations will spend money in IT and Business alignment are resourcing to support existing projects, project management recovery services have started to push forward as an important area to save failing IT projects to get them back on track. Organizations often do not have the resources or skill sets to properly evaluate enterprise software thereby, more attention will be attributed to lowering project failure. An impartial properly executed software selection greatly lowers the risk of IT failure.

3. ERP’s and Enterprise Software Projects Continue to Fail: Lack of expertise and accountability from both the organization and the vendor lead to failed implementations. There is no clear direction from organizations as to what should be implemented, by whom, what timeframe is acceptable, training, POC, management of scope creep, budgetary overruns, and how problems are resolved should they arise with definitive timelines and accountability. Clear business process definitions are often not revealed by the customer leaving vendors to guess how an organization does business. Organizations should be fully transparent with the vendors they select as they business partners with full two-way communications whereby the vendor can provide a smooth transition after implementation and the organization should also become a reference site for the vendor.

4. Changing IT/Business Selection Criteria: As delivery models continue to change organizations are evaluating different priorities and criteria. Previously organizations have relied too much on features and functions when selecting enterprise software. Many new selection criteria have started to emerge such as: nuances of data, cloud model, portability, scalability, TCO, SLA levels, Vendor lock-in, ROI and agility are areas that more closely scrutinized.

5. Enterprise Software Categories Continue to Merge: The creation of new enterprise software categories continues to emerge. Specialized software vendors have started to include additional functionality that expands the breadth of their solution but often times not the depth that is required. Customers are confused as to how to match the right type of software with what functions and depth they actually require. Vendors have started to include social, collaboration, CRM, project management, billing and BI within their software. This delineation muddies the water for the consumer as they may not know how to categorize their business to match enterprise software categories thereby contacting the wrong vendors to start out their software evaluation.

6. Paying More Attention to BYOD and Security: As use of mobile devices continues to proliferate mobile security and social user policies must be put into place and enforced. Additional security will lower organizational risk by securing multiple mobile devices. Employees should also have direction from the company as to what is acceptable and not for social media interaction, who owns the information, where it stored and clear lines of communication where social accounts differentiate if communications are from the company or an individual user.

7. Increased Spending for Social, CRM and Email Automation: Organizations have committed more IT budget to these softwares. Coincidentally, this is one of the enterprise software categories that are blending functionalities. An organization should comprehend its main business function as to what the organization requires and the auxiliary functionalities. A mistake often made here is that the auxiliary functionalities become the focus which strays the original intent of the software evaluation.

8. Shadow IT Emerges: This is caused by the CMO spending that does not often include the CIO. Usually, the new marketing, social software and BI software is implemented and rarely incorporates into existing IT infrastructure. The new software is independently supported, updated and managed proving difficult for internal IT management and integration to existing systems. Support also becomes a point of contention as the Shadow IT organizations are created as support is often non-coherent and difficult to manage.

9. Vendor Consolidation Continues: More vendors are increasing their portfolios by acquiring either complementary software to bolster existing functionality or even acquiring software that is completely different from current offerings. Organizations should carefully distinguish their needs and if the vendor can support their requirements, if the vendor has enough industry experience or is new to the space altogether are areas for companies to watch out for.

10. New Government and Regulatory Standards: These new requirements will require system upgrades and in some cases new system implementations. ObamaCare, New HIPPA and medical industry requirements will drive software spend in this sector. Also there have been many changes in food processing and manufacturing industries that will cause companies to re-evaluate existing systems or completely installing something new.

11. Salesforce.com Turning into ERP: Salesforce continues to grow its cloud presence by acquiring more SaaS solutions. Its recent acquisitions and cloud portfolio suggests that one of the few plays to increase company value is to increase its offerings. SFDC will acquire solutions that complement their SCRM business with more HR/HCM, Financial and possibly project management which will effectively turn into an ERP for Services. The Oracle partnership suggests that SFDC is targeting Workday customers with Oracle functionality – all to be offered in the cloud. This one should prove interesting to see where this ends up.

12. Further IT Specialization Being Required: New softwares are emerging and requiring specialized expertise. A new software category that enables integration and workflow capabilities are greatly reducing complex IT tasks. However, these new applications often require highly specialized expertise such as programming, business process mapping, API creation, administration, integration and design capabilities that may not have been part of the IT department.

13. Organizations Going Hybrid Cloud: Organizations are adopting a combination of public and private cloud creating hybrid clouds. Organizations are not comfortable putting some types of information in the cloud. They create an internal cloud and have less important information in the public cloud. The cloud provides a seamless integration for employees.

It will fun to see what unfolds this year as with each year. Did we forget any? What trends do you see?

Eval-Source is a consulting firm that provides enterprise software selection and strategic technology consulting services and products for organizations to achieve success in their IT initiatives. Our consulting practices include cloud and on-premise software evaluation services, Enterprise Software Project Management and Recovery Services, Corporate training and strategic technology consulting. Our Tru-Eval selection system allows organizations to avoid IT failure, receive greater ROI and provide accurate decision support for enterprise software procurement. What sets us apart is our unbiased best in class consulting services that provide our clients with value, direction and success in selection, planning and optimization of their technology systems.

 


Things You Should Know About Software Asset Management

April 20, 2017

Software

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Businesses make use of different system resources in order to increase organizational productivity and profitability. Different components of systems like software, software deployment tools, hardware, application programs, etc., are utilized according to business needs. Managing the computer resources becomes essential to make certain that the costs are managed to suit the benefits. Software asset management is the process of managing the buying, usage, maintenance and the disposal of software in an organization.

Software Asset Management (SAM)

It is done to minimize legal and associated risks and to ensure user productivity of software applications. IT personnel involved in this process identify the number of software installations in the organization, compare the data with the number of purchased licenses, and make certain that there are control measures to prevent any legal complications related to software licensing and purchasing.

Software inventory tools

These are the tools that make sure that the software programs purchased and deployed to the organization’s systems using software deployment tools are licensed. They track the number of software inventory installed in the systems and compare it with the number of licensed software. They act as a control mechanism to ensure no illegal and unlicensed software is used in business activities.

Software metering tools

These tools ensure that there is enough number of licensed software for use in the organization. They also help keep record of expiration of software licenses and their updating. They help in eliminating ill-usage of unlicensed software by stopping or limiting their execution in real time. These tools also monitor the payment for and usage of pay-per-use software programmes. Added benefit of these tools is that they help in making sure that the software usage is in conformance with the organizational policies and strategies.

Application control tools

They are a part of information technology control system of a business. They are used as security measures as they help in securing and protecting privacy of data when software applications are made use of. They restrict who can run an application and when it can be run and which application can be run by whom. They have authority on what kind of inputs can be processed using these applications. Authorization and authentication controls are made use of in the process.

Deployment tools

Tools that are involved in ensuring that a new software application is accessible to an end user are called software deployment tools. The deployment activities range from the release of the software to its disposal. These tools are used in installing software in a computer system. They take care of installing the software program and deactivating all non compatible programs during installation. They are made use of in updating the software on time and in uninstalling it when required.

Patch management tools

Patch management is carried out on administered systems. It refers to acquiring, testing and installing code changes in the systems. These multiple code changes are referred to as patches. The process helps to keep the software application updated, so that usage and efficiency standards are met. Along with software deployment tools, these tools support SAM.