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Current Management Opportunities and Challenges in the Software Industry

Over the past 30 years, the world has undergone a very dynamic technological transformation. Retrospective, without exaggeration, it can be stated that the appearance of electronic devices and the Internet has greatly influenced everyday and leadership practices in an unprecedented extent. The computerization of many business processes and the creation of large-scale databases, along with many other radical technological developments, has resulted in enormous cost savings and quality improvements over the years. Linking financial markets to electronic devices and worldwide internet acceptance significantly reduced transaction and communication costs and brought nations and cultures closer to each other than ever imagined. Computers are now the basic tools in virtually every business around the world and its application and adaptation to business problems as a software development is a practice that many companies carry out on their own. In the past such computer and automation efforts were very costly, so only large companies are practicing. Over the years, however, the software industry has offered off-the-shelf solutions and services to smaller companies. Today, after surviving the collapse of the great dotcom 2000, software development companies have emerged as a powerful player in the technology industry.

Numerous computer standard and technology appearances have created many challenges and opportunities. One of the main features of the software industry is a relatively low entry barrier. As software business is not capital intensive, successful market access depends largely on know-how and unique industry know-how. Entrepreneurs with the right skills can relatively easily compete with large companies and thus pose a significant threat to other, much larger organizations. But companies need to find traffic and intellectual property protection. so the robust knowledge dependence and the relatively short life span of computer technologies for the knowledge workers is very important to the organization. Scientists working in the industry therefore have a stronger bargaining position and require different management style and working conditions than in other sectors, especially in industries with higher market access capital requirements. The relatively strong position of software vendors poses a challenge to human resources strategies in organizations and expresses concerns about the protection of intellectual property.

A relatively young industry is blessed with infinite new opportunities, for example, the ability of companies to collaborate with other organizations around the world without interruption and virtually no communication costs. Furthermore, there is no import tariff that would result in the effectiveness of cross-border software; however, the handicraft industry suffers from lack of standards and quality problems. Successful management of such dynamic organizations is challenging today's leaders and modern management sciences, as traditional management styles, such as the Weber bureaucracy, are unable to cope with uncertain environments.

According to several studies, today's software development practices are extremely ineffective and wasteful (Flitman, 2003). On average, projects are only 62% efficient, leading to 37% of waste. The typical software development project has the following work allocation: 12% design, 10% specification, 42% quality control, 17% implementation and 19% software development (2003). There are many possible interpretations of the nature of the resource distribution. Firstly, a very high rate of quality control of 42% may indicate the lack of standards and standardized working methods. This great effort can also be the result of ineffective planning and specification processes. As 19% of software development is a function of software complexity, hardware, and tools, it is possible to reduce the internal workflow through careful management and standardization. However, the only disappointing part of the implementation, which is only 17%, should be alarming to business owners as implementation activities are the main revenue stream. The relatively low level of productivity reported by Flitman (2003) reflects that the average American programmer produces about 7,700 codes a year, which means only 33 people per working day (Slavova, 2000). Given that Microsoft has a large-scale software project like Microsoft Word that requires 2-3 million codes, it will become apparent how costly these projects are and that productivity and quality management are the most important for today's software development companies problem. The challenge facing the contemporary software engineer is to root the productivity problem and to find remedies in the form of treatment practices.

Most recent studies address a lot of software development productivity and quality issues. Elliott, Dawson and Edwards (2007) conclude that current organizations lack qualitative skills. In addition, researchers partially blame the prevailing organizational cultures that can lead to counterproductive working practices. The project's documentation was missing from the key issues identified, as the documents are incomplete in details and are not updated frequently. Quality control is not often practiced in software testing, and there seems to be a lack of quality assurance processes to ensure that the software is built from the beginning to a qualitative point of view. Due to the shortcomings of organizational culture in organizations, workers tend to avoid confrontation and thus avoid product testing (2007).

As knowledge workers are the main driving force behind software organizations, creating a fruitful and efficient organizational culture is a major challenge for today's leaders. Mathew (2007) has recently studied the relationship between organizational culture and software business. Software organizations are generally human-centered and their dependence on knowledge workers is reflected in huge spending remuneration and more than 50% of revenue revenue. As the industry is mature and continues to evolve, the challenge facing organizations is to drive a greater number of applications that bring culture to the center of leadership. Mathew (2007) found that the most important impact on productivity was achieved by creating an environment of mutual trust. Higher levels of trust result in greater employee autonomy and empowerment, which strengthened the existing leadership view that trust and organizational efficiency are closely linked. Companies with higher confidence and empowerment have enjoyed more intensive employee involvement and thus better quality products (2007).

Product quality also depends on other factors that go beyond discussing workflows. Relatively high employee turnover had a detrimental effect on product quality and organizational culture (Hamid & Tarek, 1992). Constant traffic and inheritance will increase the costs of completing the project, cause significant delays and make the organization more risky because its developmental processes are severely disrupted. While human resource strategies help to find the company's key staff, organizations must be prepared for their turnover and minimize risks. One of the biggest risks of people-centered, knowledge-based organizations is the loss of knowledge when workers go

. Knowledge management has evolved over the last two decades as a relatively new discipline, but it is mostly practiced with large global organizations (Mehta, 2008). As companies recognized the importance of knowledge management activity to mitigate the risk of loss of knowledge within their organization, the purpose of gathering and organizing information was to use their knowledge-makers and their teams first. By building custom knowledge management platforms, companies can benefit from improved transfer, storage, and critical business information availability. These activities can help companies in innovation and knowledge expansion (2008). The challenge remains to set up such systems and create support for employees in knowledge management systems. In addition, these systems open up another critical issue. What happens if the highest-level performers communicate their knowledge to them?

Another important variable affecting the quality of software products and services is the involvement of top management. Projects in the software industry are usually unsuccessful for the following three main reasons or combinations: poor project planning, poor business, and support and involvement of senior management (Zwikael, 2008). Software projects are similar to projects in other industries, focusing on timely projects, budgeting and compliance with specifications, the industry needs special support processes from top management to facilitate projects. These processes can be summarized in Table 1. Key support processes, such as the appropriate assignment of project managers and the success of a project, indicate that successful companies show higher-level project performance controls than others; However, Zwikael acknowledges that senior executives rarely focus on these key processes and rather deal with processes that are easier to work in person.

first Table

Software's most important top management support processes in the industry (Zwikael, 2008). Processes marked with an asterisk (*) were considered the most important

Support process

Appropriate project manager task *

Update project procedures

Involvement of the project manager at the initiation stage

Communication between the project manager and the organization

Measuring the Success of a Project *

Supporting Project Organization Structure

Interactive Interdepartmental Project Groups *

Resource Planning for Organizational Projects

19659002] Using Standard Project Management Software

communication and the diversification of the software industry into a wide range of industries have created many new market opportunities. Some of the most important opportunities are based on low communication costs, while others are due to geographical diversification and international cooperation.

One of the biggest opportunities that specially bigger organizations strive to capture is that geographic diversification is a development of software that is globally widespread. Kotlarsky, Oshri, van Hillegersberg and Kumar (2007) have explored this potential, which is primarily practiced by multinational companies; At the same time, a growing number of small businesses are reported to benefit from software development across national borders. The study has shown that software companies can achieve significantly higher productivity by creating reusable software components and reducing interaction between tasks. By reducing dependence, the modules produced will probably become more useful in future projects; In addition, reducing the merged computer code has a positive effect on project teams as well. The team that markets their development globally involves increased autonomy and reduced communication demands. However, the authors point out that prerequisites for software development are not only good project design but also standardization of tools and development processes. Without such pre-requisites it is almost impossible to handle and consolidate the various distributed group activities (2007). In particular, teams in neighboring countries are being criticized for using videoconferencing or other web conferencing technologies and having tremendous savings potential. But are these communication tools effective?

Over the past decade, a new kind of organization has emerged, exploiting the Internet. Virtual organizations are entirely in virtual space, and members of the team mostly, if not exclusively, communicate over the web using webcams and messaging software. Challenging the leaders of virtual organizations is the exploitation of new technology and the motivation and management of labor and work processes. Andres (2002) has compared the virtual software development teams face to face and presents a number of challenges and opportunities for virtual executives. Due to a lack of physical presence, managing the other time zone may be problematic. Communication must be asynchronous or only occur in sessions that overlap in both time zones. Virtual teams facilitate this process by using e-mail and voice / text messaging, but it becomes even more important to reduce the interdependence of tasks. Andres (2002) suggested that such communication means a lower "social presence", meaning that people need to have the presence of other groups in the group. On many computer communication channels, the problem is lack of visual traces, statements, language of body language, and traces of the person's voice. When social presence is maintained, the different types of communication ranging from the lowest to the highest can be ranked as e-mail, phone, video conferencing and face-to-face. Andres' comparison with video conferencing and development teams using face-to-face meetings showed that the latter group was much more efficient and more effective, even though the videoconferencing team reduced travel costs and time.

However, there are many shortcomings in 2002. First off, it's seven years and internet costs have fallen, and speeds have improved considerably since then. Taking into account the quality and availability of the video as well as the speed of the computer, this form of communication has recently become more feasible. In addition, today's leaders are beginning to learn how to effectively use these communication tools. For example, although e-mail technology has been around for two decades, many leaders still find that e-mails can cause many ambiguities. The challenge for future generations of drivers is to change their writing style to meet restrictions on e-mail and other text messaging. Another important factor to consider is that written communication can be stored indefinitely and has legal consequences; so more often, leaders deliberately prefer to avoid communication channels for political or legal reasons. However, Andres's (2002) study gave a negative picture of video conferencing, probably because the technology was not ripe and the team members were still unhappy with it.

To operate video conferencing, all participants need to be aware of the specific features of this technology and adapt their communication style and speech accordingly. Regardless of the type of meeting, another important factor is the preparation. What we can study in the future with regard to studying Andrés is the degree of preparation for the group. Do team members spend enough time preparing questions about teammates' questions and answers before they meet? Videoconferences may in some circumstances require more preparation than personal meetings.

Another option for software developers and outsourcing is the challenge for world leaders. In 2007, $ 70 billion was devoted globally to outsourced software development (Scott, 2007). Given the enormous lack of IT skills in the United States and Europe, many companies take advantage of globalization by selecting international suppliers for their software development tasks. However, outsourcing requires close coordination between the organization and a number of suppliers. The idea is that coordination costs and problems are overall less costly than in-house development; but this goal is not always achieved. While outsourcing, correct deployment and alignment can lead to 24-hour improvements around the world and provide day-to-day continuous services to the organization, this may lead to the loss of intellectual property. Although mechanical parts can be patented in most countries that support intellectual property rights, software is not patentable in most North American countries.

In addition to challenging outsourcing, software development organizations take advantage of technologies in ways to reduce costs. remote, remote work and service-oriented architectures (SOA) (Scott, 2007). Remote access and telework grew sixfold between 1997 and 2005 and resulted in annual savings of $ 300 million for office space reduction (2007). SOA is a similar concept and software rental for customers. Instead of purchasing, installing, and maintaining software and servers, customers can rent online services and reduce total ownership costs as these activities are no longer needed on the customer's side. The virtualization of the software business gradually opens up new perspectives and offers additional opportunities, but it also has endless challenges for managers.

Slavova (2000) studied the strengths and weaknesses of offshore and virtual team development. In 2000, India and Ireland were the largest offshore software development venues. Offshore companies can provide up to 60% cost reduction, faster development tasks across the globe, and specific domain knowledge acquired over the years, providing similar services to other customers. Integrating work from external sources, however, is a major obstacle. In addition, linguistic and cultural issues may cause serious communication problems that endanger the project, especially if misunderstandings cause erroneous interpretation of project specification documents. Slavova (2000) found that the most common solution and strategy to avoid problems with offshore suppliers is that they often encounter them; this tactic, however, results in higher travel costs and disruption of driver workflows, thus offsetting the benefits of outsourcing. The software business leaders therefore need to balance risks and opportunities before outsourcing, because many of these companies have failed to pay for this strategy.

An overwhelming potential for online innovation in the past decade. The collective innovation effort of a large number of individuals and companies is generally open-source on the Internet and has made significant advances in computing, for example in the free Linux operating system. At first, businesses felt that market developments were threatening the market because businesses realized that open source solutions compete with their products. In many cases, this is in fact and indeed true; Nevertheless, some companies, including IBM, will take advantage of this new form of innovation for their own and for the common benefit (Vujovic & Ulhøi, 2008). As software companies work in an increasingly precarious environment, they are constantly struggling to create new and better products. By publicizing the computer code publicly, companies can profit from the Internet through the Internet, especially from other companies. In addition, companies enjoy free debugging and testing for external users, but one of the most important reasons for "open source solutions" is the rapid adoption and spread of enterprise technology at a relatively low or no cost. For example, the spread of IBM's open source technology is free marketing for the company. But how can companies earn money when they offer something for free?

A closed innovation model (a software suite without a standard software package) can be combined with an open source code, allowing the company to charge the product. In other cases, the company is free to cover the technology platform on the Internet and then sell special tools using the new platform. Big money savers are obviously shared development, testing and maintenance costs as many stakeholders are working on the same project.

The open source knowledge sharing model, however, is not a novelty. The philosophy and advantages of open innovation models have been realized in the third quarter of the nineteenth century. At that time, open innovation was practiced by the United Kingdom in iron and American steel. Co-operation between a number of industry players has put an end to the dominance of their own technologies, for which costly royalties can be paid (Vujovic & Ulhøi, 2008). Given the dynamic environment of the IT industry and the short lifetime of computer technologies, adoption of open innovation models has become much more popular. Analyzing the largest open source players in the market, Vujovic and Ulhøi have compiled a list of support strategies, which are listed in Table 2. Of these, many of the strategies are very important from the top management perspective, such as open source, to block a competitor and use the open model as a larger market share gateway


Achieving Market Power

Better Acceptance of a Product and Creating Standards

Strategies for Accepting an Open Source Approach (Vujovic and Ulhøi, 2008)

Relocating a competitive advantage to another architectural layer

Multiplying the Product

Encouraging Innovation

Supplementing Revenue Basis

Disabling Competitors


The IT industry and software indices are fairly new try to try in particular in parallel with the management history. While Taylor's scientific management played a prominent role in the development of leadership science (Wren, 2005), the software industry seems to have missed such great progress. Due to high level of complexity, software development discipline is still faced with quality problems arising from lack of standardization. Like Taylor's efforts, executives need to analyze software development processes and develop industry standards and measures. If such measures and procedures exist, this will help make software projects more predictable.

Most of the practices in today's software industry would have been Taylor Déjà vu if he were still alive. In addition, anomies and social disorganization worries in the age of social personality in today's times more drastically. Mayo described in the 1940s that leaders overemphasized the technical problems, hoping to increase efficiency, ignoring the human social element (p. 296). The same situation is now more apparent in the computer industry. Rapid technological development has created many opportunities and drastically changed the working environment. At the same time, however, the management could not prepare for these dramatic changes that would imply the introduction of technology at the workplace. Leaders respond to technological development at best, as the consequences are mostly unpredictable due to the complexity of human nature. For example, e-mail has provided a number of advantages to low cost and simple asynchronous communications; however, many e-mail messages are misunderstood because they have not been written properly. In addition, IT staffers are struggling to keep pace with the large number of daily messages, as they are a major disruption to daily workflows.

As knowledge workers become more and more important in survival, this industry needs mature and requires more staffing, the audit area is increasingly an issue for managers to handle it properly. As discussed by Wren (2005), with the growth of the team size, the number of relationships to be treated is rising from an astronomical point of view (353. Managing bigger teams is a big problem because of the mere interaction that makes it difficult to build trust inside the team. , especially because creative tasks may require high levels of collaboration, and planning work is a major obstacle for future leaders to overcome. increased responsibility can help in the short term, but long-term leadership needs to find new strategies for retaining knowledge workers

Product quality is still a big issue. Deming's idea is good, but the quality assurance of the software world does not The open source innovation model can be relieved in this regard, as greater involvement of external developers can contribute to improving overall quality. At the same time, open source projects are difficult to handle for the same reason. Since open source projects are self-directed and do not attach to anyone, these projects sometimes have uncontrolled, tumor-like growth.

More Deming's Deadly Wound (Wren, 2005, p. 463) Relates directly to the software industry. Most products come from scratch, not from components, and software organizations have little standardization. As software developers tend to see their ships work, standards and procedures collide. In addition, the dynamic requirements of a rather complex environment and compliance with deadlines make it easier for professionals to lose quality improvements by preparing organizational standards. High-traffic and individual performance measures remain industry-wide, although many scientists such as Deming have long argued that these measures are counterproductive

Future leaders need to find a way to compensate for high traffic. find a way to avoid it. The division of labor can work well for the company, but the workforce recognizes it well and needs a constant challenge. The best performers do not allow ordinary tasks, and they all do their best. IBM has successfully implemented workplace expansion to overcome this phenomenon (Wren, 2005, p. 333). Unfortunately, this strategy may not work for all companies and can only be used within certain limits within the organization. Az elmúlt két évtized fejlődését figyelembe véve a vezetőknek szembe kell nézniük a tudásmenedzsment fegyelmével, és működőképes megoldást kell találniuk szervezeteik számára.

A vezetés tudományának integrációja a pszichológia és a szociológia előrehaladásával egy utat kínálhat a a tudásmenedzsment problémájának megoldása. Elengedhetetlen, hogy a vezetők pontosan megértsék a munkaerő adott csoportjának motivációs hajtásait. Ezek a munkavállalók magasabb jövedelmet élveznek, nagyobb rugalmasságot és szabadságot, valamint nagyobb alkudozási teljesítményt. Ez szürke zónába helyezi őket a hagyományos, alacsony képzettségű munkavállalók és a cég tulajdonosa között, mivel a tudástársak szellemi tőkét hoznak létre a vállalatnál. Mivel a legtöbb tőke elveszett és a munkavállalókkal együtt marad, amikor elhagyják a szervezetet, a forgalom sokkal károsabb, mint a hagyományos munkavállalóké. A vezetők tehát nem egyszerűen alkalmazhatnak hagyományos stratégiákat erre a különböző alkalmazottakra; inkább kreatív ösztönzőket kell keresniük a tudástudók motiválása és megtartása érdekében.

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