{"id":177,"date":"2009-08-11T12:48:56","date_gmt":"2009-08-11T19:48:56","guid":{"rendered":"http:\/\/35.225.155.113\/blog\/index.php\/2009\/08\/11\/strategic_software_development\/"},"modified":"2019-10-13T13:10:56","modified_gmt":"2019-10-13T20:10:56","slug":"strategic-software-development","status":"publish","type":"post","link":"https:\/\/www.weinstein.org\/blog\/index.php\/2009\/08\/strategic-software-development.html","title":{"rendered":"Strategic Software Development"},"content":{"rendered":"

I’ve been thinking a lot about software
\ndevelopment and strategic business strategies recently, in part
\nbecause of some business work I’ve been doing recently and in part
\nbecause the reason why the software program exists has a strong
\nrelation with how the system is designed<\/a>.<\/p>\n

\n

‘We Are All Software Companies Now<\/a>‘ is a post I read last week suggesting that all businesses are software businesses these days, even HP<\/a>,
\nTesla<\/a>, Rackspace<\/a> and Apple<\/a>. Well that’s not quite right, as I’ve
\nnoted before about Apple<\/a> all one has to do is look at their financial
\nstatements to know that Apple is a hardware company, selling iPhones,
\niPods and Macs. Apple is no more a software company than it is a
\ntechnology retail chain outlet.<\/p>\n

\n

But of course Apple does both because
\nit has determined that having retail stores and software engineers
\nare critical functions that allow themselves to effectively preform
\nin bringing the best personal computing experience to consumers
\naround the world.1<\/sup><\/a><\/p>\n

\n

That is in many cases a business might
\ndetermine that their own development of software for a key business activity will enable the organization to achieve its
\nlong-term objectives.<\/p>\n

\n

To determine if a business function
\nmight be of strategic importance, let’s consider two different types
\nof businesses and how they relate to a specific type of business
\nsoftware.<\/p>\n

\n

Spacely Sprockets is specialized widget
\nmaker, but unlike Apple, only sells its sprockets wholesale to
\nretailers who then sell a range of individualized widgets from
\nvarious manufacturers to public consumers. ACME is just such as
\nretailer.<\/p>\n

\n

Both Spacely Sprockets and ACME have
\nwarehouses. Both companies have shipping requirements. Both companies
\nare using a software solution to manage and track products from
\norigin to destination, from creation to final sale. Spacely uses an
\n“boxed” enterprise resource planning (ERP<\/a>) solution from a highly
\nregarded business software vendor. ACME, on the other-hand, uses a
\ncustomized, self-developed and managed ERP solution.<\/p>\n

\n

What exactly are these two ERP systems
\ndoing for these companies? In general ERP systems are about removing
\nbarriers to data that can become trapped in department
\nspecific solutions. That is ERP systems are about eliminating
\nstandalone computer systems in finance, marketing and manufacturing,
\nand integrating them into a single unified system.<\/p>\n

\n

For Spacely Sprockets this means a
\nsolution that tracks wholesale sales and overall market penetration,
\nproduction volume, warehouse inventory and shipping costs. The
\nsoftware vendor Spacely has contracted sells a solution built on
\nsoftware modules for each department; marketing and sales, production
\nand shipping. Each department can choose from a set of predefined
\nworkflows optimized for their need. At the same time the modules
\nshare a common communication infrastructure enabling access to any
\nrequired piece of data for the company’s Operations department.<\/p>\n

\n

Thus Spacely can focus on their
\nbusiness, building the best widget for their market. At the same time
\nreducing the overall cost of their operation and leveraging the
\nexpertise of other similar business models via their software
\nvendor’s solution. The reduction of operating costs can either be
\npassed on to the consumer in lower product cost or to Spacely’s
\nshareholders in higher profit margins.<\/p>\n

\n

For ACME their business also involves
\nsourcing products, procurement and logistics management. They too are
\nin need of integrating resource management solution within their
\ncompany.<\/p>\n

\n

However, their decision to build their
\nown ERP stems from the fact that their continued success in business
\nis built on their ability to properly managing the procurement and
\nlogistics of numinous products, including Spacely’s widgets. AMCE has
\nyears of in-house knowledge and expertise that just cannot be
\nreplicated in any “off-the-self” ERP solution.<\/p>\n

\n

ACME’s strategic business objective is
\nto continue applying and refining their hard-won supply-chain
\nknowledge to their operation. In doing so they too can reduce their
\noperating costs in relation to their competition and can either pass
\non the savings to their customers or to their shareholders in
\nhigher profit margins.<\/p>\n

\n

Of course in the abstract, this seems
\nextremely straight-forward. In reality, business conditions change
\nall the time. One day the hard-won knowledge your business has fought
\nfor is gold, the next it might become a liability.<\/p>\n

\n

And just because a business elects one
\noption over the other doesn’t mean the software concerns end there.
\nNope, besides deciding to build a custom solution or not, a business
\nhas to consider; do they go with a close-source solution or an open
\nsource<\/a> solution? If they do decide to develop a custom solution, do
\nthey try to develop the software knowledge and solution in-house or
\noutsource?<\/p>\n

\n

\n

\n

\n
\n

1<\/a> I
\ncouldn’t find an up-to-date reference for Apple’s current “mission
\nstatement.” The best reference<\/a> Google could come up with is a few
\nyears old. None-the-less, even if Apple doesn’t have a stated
\nmission, this statement isn’t that far of the mark of how the
\ncompany is currently operating.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

I’ve been thinking a lot about software development and strategic business strategies recently, in part because of some business work I’ve been doing recently and in part because the reason why the software program exists has a strong relation with how the system is designed. ‘We Are All Software Companies Now‘ is a post I […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[92,117,118],"tags":[48,204,7,43,106,166,146],"_links":{"self":[{"href":"https:\/\/www.weinstein.org\/blog\/index.php\/wp-json\/wp\/v2\/posts\/177"}],"collection":[{"href":"https:\/\/www.weinstein.org\/blog\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.weinstein.org\/blog\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.weinstein.org\/blog\/index.php\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.weinstein.org\/blog\/index.php\/wp-json\/wp\/v2\/comments?post=177"}],"version-history":[{"count":3,"href":"https:\/\/www.weinstein.org\/blog\/index.php\/wp-json\/wp\/v2\/posts\/177\/revisions"}],"predecessor-version":[{"id":737,"href":"https:\/\/www.weinstein.org\/blog\/index.php\/wp-json\/wp\/v2\/posts\/177\/revisions\/737"}],"wp:attachment":[{"href":"https:\/\/www.weinstein.org\/blog\/index.php\/wp-json\/wp\/v2\/media?parent=177"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.weinstein.org\/blog\/index.php\/wp-json\/wp\/v2\/categories?post=177"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.weinstein.org\/blog\/index.php\/wp-json\/wp\/v2\/tags?post=177"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}