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Why someone needs software? -- Presenting the business needs that software is developed for

Why someone needs software? -- Presenting the business needs that software is developed for. Jussi Autere, Professor. Lecture on September 15, 2009 Jussi.Autere@tkk.fi. Today’s Items. Views on types and uses for software A view on potential sources of competitive advantage

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Why someone needs software? -- Presenting the business needs that software is developed for

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  1. Why someone needs software? --Presenting the business needs that software is developed for Jussi Autere, Professor Lecture on September 15, 2009 Jussi.Autere@tkk.fi

  2. Today’s Items • Views on types and uses for software • A view on potential sources of competitive advantage • Role of software for companies searching competitive advantage

  3. Section 1 Views on types and uses for software

  4. What software is? • Computer software, or just software is a general term used to describe the role that computer programs, procedures and documentation play in a computer system (Wordreference.com: WordNet 2.0, 2007).

  5. Systems architecture based view • Wikipedia (2009) includes in the term • Application software – Users use directly • Firmware – Makes electronic devices work • Middleware – Makes distriubted systems work • Operating systems – Connects application software to hardware and middleware • Software testing – Ensure that software works before it is taken into production use • Testware – Utilities and application to test a software package • "Software" is sometimes used in a broader context to mean anything which is not hardware but which is used with hardware, such as film, tapes and records (dictionary.com, 2007)

  6. Usage based view, 1 Software Products Software Developed for a Customer Software Developed for Internal use Embedded Software Visibility of software to customer Number of standardized copies Source Rönkkö et al. 2009

  7. Usage based view, 2 What about software provided as a project? What about consumers and entertainment? Source SWOT Consulting 2009

  8. Content Producer Based View Carriers Network Services Providers Application Services Providers Connectivity subscription Network services subscription Content or application services subscription Monthly bill based on connecation capacity Monthly bill based on services Flat rate, usage based rate or other business model IP and DVB- traffic transfer Management of mobility and service levels Last mile infra Transfer network Technical applications Content services Frequences Copper/Fiber POPs Between services providers Carrier subcontracting MGw SIM HLR+VLR MPLS Streaming networks Text content On-demand content Broadcast content Edge routers IP met net Access control Hosting Security Messaging VoIP Source: Teosto, 2007

  9. Codification Tool Based View • Software is the tool to codify (document and automate repetition) the logic of • Tasks needed to provide the functionality of products or services • Tasks needed to provide value added features of products and services (”whole product features”) • Processes that are needed to produce products or services • Person to person communications • Software has replaced mechanical engineering as the most popular codufication method • Change occured in the 1980s • In Finland, software developed for other industries’ R&D is at least as big as independent software business

  10. Section 2 A view on potential sources of competitive advantage

  11. Why understanding of sources of competitive advantage is important? • Variable costs of producing modern products and services are usually low • Main value added from technology, brand, etc. • E .g. reproduction costs of software almost zero • Standard production part of creating the offering is not usually the main source of competitive advantage • Main focus in new business is usually about producing something new • Software is the main tool in producing something new • Investment in new ideas is based on the search of competitive advantage • When a company is searching new competitive advanteage, it is always in a hurry

  12. Technological excellence Operational efficiency No oxygen Customerintimacy One Mapping of Sources of Competitive Advantage Channel

  13. Section 2 Role of software for companies searching competitive advantage

  14. How Companies Use Software, Operational Excellence, • Main focus in these companies is making processes efficient • Software to automate • Automating production lines and product design(CAD, CIM, FMS, etc.). 1980s were the colden era • Automating customer contact, helpdesks, Web based services tools, etc. (re-engineering) Late 1990s and early 2000s were the golden era • Software to reduce planning work, warehouses, transport costs, and manual communications • Accounting and payroll software. These are the source of corporate IT • Enterprise resources planning (ERP). Early 1990s were the colden era • Customer Relationship Management (CRM). 2000s were the golden era • Software to reduce routine manual management (”Excel replacement”) • Reporting and Business Intelligence • Management of different portfolios (quality defects, ideas, innovations, projects)

  15. How Companies Use Software, Customer Intimacy • Main focus in these companies is meeting the needs of individual customers • Software to adapt the offering • Intelligent products that can be configured to the needs of individual customers, e.g. BMW’s iDrive • Customer self service tools, e.g. Online banking • Bid management, product configurators, and project management • Software to understand the needs of a customer or customer segments • Market research and analysis software, currently the hot area • Marketing targeting tools (Google, etc.) • Software to by-pass the channel • One of the drivers of the Web

  16. How Companies Use Software, Technological Excellence, • Main focus in these companies is producing new value added • The core competitive advange is usually in own technology, not generic software applications • Sofware used to fast codify technological understanding • Tools to develop embedded code • CAE, PDM and CAD based tools • Software development tools and architectures. Especially tools that integrate fast the ”trivial” part of the product or service (many times 80-90% of the work • Tools that enable fast communications • Inside the company and between the company and leading customers • Graphics design, aeasthetical design, market mesages design • Tools to collect feedback from customer behavior (Google Analytics, etc.). Currently hot

  17. Still, Large Part of SW is Developed for Technology’s Sake End-user devices (PC, Mac, Cellular, Car ..) End-user customized user interfaces Special applications, such as B2B vertical software ”In the middle” Technologies (Da Interweb, middleware) Open and standardized software services Generic datacenters running the services

  18. Current Hots for Competitive Advantage Source: Tivit’s CS Project, 2009

  19. See you next week! ”All you need is good engineering.” One of the 10 golden VC rules

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