CSPD Final Report

CSPD Final Report[Type the document subtitle]3/24/2015

Submitted To Sir. AZIZ JAN

Group Member

Table of Contents1 Abstract32 Introducation3Global trends 3 Potentials for Pakistan 4 Traditional attitude53 Three Fundamental, Non-Optional to Succeed in Life 6Ethos 6Pathos6 Logos 64 A typical lifecycle of a software company7 Phase I The Dream7 Phase II Concentrated development with sacrifice7 Phase III Birth pains, birth and the birth announcement7 Phase IV Slow, steady growth, boom or bust7 Phase V Expansion, innovation, market-share8

5 How to Start Software Company9

6 Software industry in Pakistan11 Human resource development11 Marketing and public relations11 The Official IT Exports of Pakistan12 Guesstimating the Actual Size of Pakistan IT Industry13

7 What human resource required for the project?14 Be aware of the local laws 14 Taxes will not be higher than your income 14 You better than all the freelance developers 14 How you will find your customers?15 Calculate the price the customer has to pay 15 Are you sure you're ready to deal with customers?15

7 Conclusion16

AbstractLund Performance Solutions will, for the first time going to start a software hose and software development company. The Mr., president request for to give the complete requirement, include it accessories, human resource required. Which also included present status of it industry, profit margin in software industry and how can get project from customer? .This technical report outlines the contents of a minimal set of software development Project.

Keywords: Capability Maturity Model Integration (CMMI), Software Process Improvement (SPI), Project Planning (PP),Project Measurement and Analysis (PMA), Configuration Management (CM), Pakistan Software House Association (PASHA), Pakistan Computer Association (PCA), Business process outsourcing(BPO), Pakistan Software Export Board(PSEB).

IntroductionThe software development has come of age from all directions. It has become a promising industry, lynchpin of the modern economy, a phenomenon of digital science and it means business all over the world. It is the business at home, it is the business offshore, and it is the business unusual. Every country in the world no matter large or small, developed or underdeveloped, rich or poor needs the help of information technology to carry out day-to-day functions, launch research and development projects, and make improvement in industrial growth.The software industry a small portion of information technology does not need big infrastructure, mass electricity supplies, import of sophisticated machinery, a large number of technically skilled workforces, or a mechanical work to launch a product. No huge local or foreign investment is required. The essential part of the software industry is the brain, which we have in abundance in Pakistan, but are wasting away in a devil-may-care manner.The development of the software industry in Pakistan needs futuristic approach for startups and contributing environment for the software concerns already in the business. In turn, any facilitated step will generate job opportunities at mass scale and will pave the way for billions of dollars foreign exchange earnings without physically handling the finished products. The exports of the software products do not need processing of any export documents like bill of lading or airways bill, and transportation, etc as the export process of a software product is a click away.

Global trendsCurrently, it is a major trend all over the world to computerise everything possible and get rid of paperwork. The software industry is one of the most rapidly growing segments of the information technology industries. The size of the worldwide software industry, which was $303.8 billion in 2008, has increased to $457 billion in 2013, showing an increase of 50 per cent in just five years.The value of the United States software market is about 50 per cent of the global market value as the US software developers are the world leaders in development and production of software management systems which are used in businesses, homes, educational institutions and cellular phones.According to industry analyst Gartner Inc, the top 10 software giants including Microsoft, Oracle Corporation, IBM, and SAP earned the lions share of the world software market in 2013 whereas a high degree of consolidation, mergers and acquisitions of the software giants have a value of $1.45 trillion. The highest value deals were set in 2000 with 6,757 transactions valuing at $447 billion while in 2010 alone, 1,628 deals were announced valuing at $49 billion.The US corporations are the world leaders in software industry with only one each company from Germany and Spain in the top 10. No Chinese or Indian company could find a place in the list. The second to the US software industry in terms of volume is in China. According to the Chinese Ministry of Industry and Information Technology, the size of the industry including software and information services remained nearly $493 billion in 2013.India is a major beneficiary of offshore jobs which it attains from the US and European countries by utilising its vibrant software force in Bangalore and other parts of the country. The Indian IT industry consists of IT services and business process outsourcing, earning aggregated revenue of $100 billion in 2012. According to another study, the estimated value of the global IT services industry will reach $1.147 billion by 2017.

Potentials for PakistanThe United States software market is estimated at nearly $70 billion with high demand of enterprises software systems. A boom in the Chinese and Indian software industry is due to offshore jobs generated by software vendors in the US, Canada and European countries where demand for the management systems is high but expensive too. To offload their burden, the large software vendors hire IT professionals from Pakistan, India, Bangladesh and the Philippines which have the high rate of English-speaking professionals.Pakistan has great potentials to attract the foreign IT vendors and has launched various plans not only to produce quality computer engineers and software developers, but also spread out various incentives to software development organisations to enhance their capacity building. Brain drain is one of the big hurdles in the development of indigenous software market which has to be stopped by providing generous incentives to the IT professionals. It is not only difficult to get orders of software projects, but much harder to deliver. A good project manager, in-depth project analysis and a proper team of software engineers are required to make a large project successful.Pakistan can be made a destination of choice for the international IT vendors which offer offshore jobs, but there is a need to develop an appropriate IT infrastructure and high-speed connectivity gadgets to deliver the jobs in time. According to an official at the Pakistan Software Export Board, the global share of Pakistans IT industry is around at $2.8 billion. He said that the board has launched various projects, including establishment of technology parks, to facilitate the software developers and startups.However, Naeem Akhtar, owner of an IT solutions company, says that most of the startup companies cannot join any technology park because it is expensive. He says that the government departments, especially the taxation officials, dealing with the software companies are confused.

Traditional attitudeThe Pakistan Software Houses Association is a prime software association in private sector but it is not easy to approach any of the officials even for business purposes. On another note, the federal government has set up Pakistan Software Export Board with a mission to enable fast track sustainable growth of Pakistani IT industry.However, it is unfortunate that the officials of both bodies did not break the traditional routine as, despite repeated efforts, no one was available to share information withTNS. The software industry is the future of the countrys economy. The question is when lethargy prevails in this vital sector, who else will infuse a new spirit of business life in this industry to challenge the established competitors in the region.

Three Fundamental, Non-Optional to Succeed in Life

Proven, Not Just Spoken Integrity EthosIn all facets of life people are always asking the following question, Can I trust you? TheQuestion might be sub-conscious, but it is always asked. Our customers, and others whomWe serve, must know that we will do what we say otherwise they will go elsewhere.

Genuine Compassion - PathosAt the heart of service, in general, and customer service, in specific, people want to knowThat the people serving really care. Not surprisingly, many companies have adopted slogansLike, We really care, or Customer Care is Our Main Product. All too often thesePhrases are just that, slogans. Humans must tangibly know that other humans genuinely careAbout them, apart from just gaining something. Companies that invest in people who haveBeen raised with a strong respect and love for others will find that these people are a majorAsset to the company. When combined with integrity, true care for people will make yourCompany (and life, for that matter!) nearly unstoppable.

Relevant Technology LogosNeedless to say, what customers want are relevant, affordable, and easy to use products. Asoftware company must stay on top of operating system changes and new platforms. Bugsand new features present a never-ending river of challenge. But in order to succeed we mustbe sure that our software and services stay current and keep up with newer technologies andcustomer wishes.

These three principles form the foundation of the best and most truly successful companies.A typical lifecycle of a software company Phase I The DreamIn this phase, there is ample vision. Sometimes the idea for a new product comes from autility that the founder created to solve problems. Since this product is the founders baby, itgoes without saying that he is proud of his baby. This pride of parenthood will do at leasttwo things. First, it will cause the parent to give all for the growth and welfare of the newStarting a Successful Software Company baby. Second, it will often blind the parent to defects that the product possesses. Nevertheless, the mere idea of this new baby will cause the parent to dream big dreams and rightly so. This dreaming is what causes world-changing products to come to market.

Phase II Concentrated development with sacrificeThis is the phase where the founders pour in an inordinate amount of resources, and with goodreason. If there is an idea, opportunity, time, and finances, why wait? So the reasoning goes.But such projects invariably take more resources than one originally estimates. Time, energy,passion, and money are poured in often in an inordinate fashion. Everyone senses and sees thevision, and therefore is more willing to constrain their normal tendencies to be slothful andundisciplined. Pride and hope drive the developers on towards the finish line. Phase III Birth pains, birth and the birth announcementIt is in this stage where the product hits beta. Everyone is excited. The beta sites provide vitalfeedback. Documentation and advertising ought to be in full swing, but often are not. One ofthe frustrating dilemmas that are faced at this point is timing for advertising. Most printedadvertising requires a number of months of advance booking. At this sensitive juncture, thefounders have to make a decision. Do we book ad space three months ahead of time and hopethat the product is tested, documented and deliverable at that time? Or do we wait until theproduct is perfect and ready to go, thereby losing an important three-month window in themarketplace. Always a tough call. Here are a few notes about marketing and advertising. A good idea-person (ad creator) is worth their weight in gold. At this stage, hopefully you have good ads, a super web site (in this day and age, there is no excuse for a mediocre site), a marketing campaign with a strong theme, and excellent follow-up and sales support. Without these you are doomed. Phase IV Slow, steady growth, boom or bustHere, the owner(s) are faced with orders and growth. Software must be continually debugged,improved and promoted. The engineer(s) are weary and could use help. At this point, if notsooner, the thought of hiring employees enters into the thought process. Going from a smallconsortium of partners or a single proprietor to hiring employees is a much larger risk stepthan many realize. Whole new jurisdictions enter into the life of the company. Just the thoughtof workers compensation, a potential wide-variety of employee-related litigation, training,bad attitudes (remember an employee is usually not an equity holder in many cases and oftendoes not share the abandoned enthusiasm of the founder, sick days, and benefit plans, all sendchills up the spine of any self-respecting employer.you want will cost dearly in the long run, especially when compared to more capable people.Our development manager just recently said, partly joking, but mostly serious, that he felt thatthis paper could be summed up by saying, The success of a software company depends two thirds bon hiring quality people and one-third on not losing them!Also at this point, the new company is starting to acquire customers. Ah, the all-importantcustomer. Are they a purchase order-wielding, soul-less consumer who simply exists to beef upyour bottom-line, or a friend and ally for your mutual long-term success? How you answerthis question weighs heavily on your true success. We have learned that a happy customerwill literally bring more customers. An unhappy one will drive people away; the worse part ofit is that you will not know about it, nor will you be able to defend yourself. Employees withhealthy doses, and a balance, of ethos, pathos, and logos will attract customers more rapidlythan a huge advertising budget in the long run.

Phase V Expansion, innovation, market-shareAt this point the founder who stays a sole proprietor with zero or very few employees can bevery successful if he has exceptional integrity, customer care and technology innovation. Ifthe products and services offered become popular, it will be hard to stay small and still delivergood service. Growth will bring the normal pains of raising a company. There are many goodbooks about business success, in general. Nearly every book about business, customer service,etc., pays for itself in huge multiples. Heres an important thing to never forget: even a smallcontingent of loyal customers will carry you a long distance; be really good to them. In thisstage you have more competition. You must innovate and expand wisely; you will have to runfaster and smarter, or get eaten alive!

How to Start Software CompanyA software company develops and distributes computer software that may be used to learn, instruct, assess, calculate, entertain or perform a multitude of other tasks. Starting a software company requires start-up funds, programming knowledge, marketing expertise and technical support skills. Software companies operate under a variety of business models, such as charging license fees, offering subscriptions or charging by transactions. When software products are offered for free, revenue may be gained from advertising sources or by charging for related services, such as training or technical support. Here are the steps for starting a software company.

Develop programming expertise.Obtain a degree in computer programming or get an entry-level job at a software company where you can train with a software development mentor.

Work for a software company in a management capacity.Strengthen your leadership and communication skills, and tune into the needs of end users and product marketing processes.

Generate a product idea.Develop an innovative product idea based on what you have learned and observed about the needs of end users. Once it becomes clear that a market exists for your product idea, consider starting your own software company.

Protect your product idea.Obtain the necessary patents and trademarks. Ask your team of collaborators, if applicable, to sign a non-disclosure agreement (NDA)

Create a business plan.Write a plan that describes the purpose of your business, product, branding approach, market audience, product competition, and financial needs and plans. Become knowledgeable about licensing, taxes and insurance. Research the requirements of your jurisdiction for licensing, sales tax, income tax, liability insurance and other requirements. Consult an accountant or attorney, if necessary.

Raise funds for your software company.Software development requires time and resources. Explore venture capital funds. Contact venture capital firms to discuss the possibility of entering into an agreement. Research grants and loans. Explore the availability of grants and loans for small businesses. Find investors among relatives and friends. Discuss your software product idea with family and friends to explore the possibility of their investment in your business.

Purchase the necessary equipment and applications.Equip your development team with computers, programming applications, data storage capability, servers and all of the necessary tools for creating and distributing the software.

Hire developers.When hiring developers, look for candidates who have the required programming skills and the desire to work in a software start-up environment.

Develop your software product. Create a development time line. Allot a reasonable amount of time to the development of your software product. A complicated data management system may take much longer to develop than a simple mobile phone application. Oversee the development process. Facilitate clear communication between you and your development team to ensure that everyone is operating under the same product vision.

Test your software product after the development phase. Establish a structured quality control and assurance process. This may involve a small team of developers testing each feature for smooth functioning on various operating systems, or bringing in new testers with fresh eyes to interact with the product. Gather a team of beta testers. Allow a small and select team of end users to use your product to gauge its user-friendliness, effectiveness, accuracy and/or efficiency. Fix all bugs and retest. Finalize your product by fixing all bugs and errors, and conducting a final test to ensure quality.Market your product.Hire a marketing firm or experienced marketing professionals to work for your company. Consult with such professionals during the product development process to help shape decisions about product features, uses and market audience.

Software industry in Pakistan

Pakistan Software Export Board(PSEB) a government-owned, guarantee limited company, was founded in 1995, primarily to promote the information technology industry ofPakistan

Human resource developmentCollaboration with theHigher Education Commission of Pakistanto increase quality graduates into the industry through specialized programs and training and certification courses for professionals in the IT industry. Initiation of an internship program that provided job placement to almost 3,300 professionals with eighty percent of them finding permanent employment

Marketing and public relationsPSEB promotes the IT industry of Pakistan through trade show participation, email marketing,visitsto foreign countries, mini eventsand publication of articles in various international publications

I recently came across an Associated Press of Pakistan story in a leading national newspaper which was based on a document sourced from the Ministry of Information Technology and Telecommunications (MoIT&T). The title wasPakistan IT services exports rose 97.34% in the last five years. It further claimed that the Ministry claimed in the National Assembly that IT services exports will increase by 271% in the next five years totaling US$ 3.77 billion.

The following table documents the past and projected figures quoted by the Ministry based on information sourced fromPakistan Software Export Board(PSEB).

Ministries of IT & Telecommunication IT Services Export Figures (P) are projected figures

Since I find myself quoting these figures often, I wanted to cross-check the numbers against those reported by the State Bank of Pakistan. The following figures shows the export revenues compiled against Computer and Information Services as reported inState Bank of Pakistan documentsfor the previous ten years

The first thing that jumps out is a gradually increasing divergence between the State Bank numbers and MoIT&T/PSEB numbers for the past years. The difference has grown from US$ 18 million in 2008-09 to US$ 40 million in 2012-13 with the PSEB reporting a consistently higher figure. I went through considerable research to figure out if this difference can be accounted for somehow, and realized that SBP allocates Call Center service export under a separate head in itsBoP reporting. PSEB and MoIT&T is therefore adding the Call Centre service exports as reported by SBP to the IT Services exports toarriveat cumulative export figures of IT and IT enabled Services (ITeS) like BPO and outsourced call centers. Since India includes BPO exports to the IT services exports, thats a reasonable thing to do when reporting Pakistan IT export figures.

The Official IT Exports of PakistanThe following figure depicts the Pakistani IT and ITeS exports and corresponding growth trend over the past 10 years and the future projection of MoIT&T into one graphic.

Guesstimating the Actual Size of Pakistan IT IndustryAfter reviewing several documents, press reports and policy documents listed in the notes with this article, it is clear that the size of Pakistani IT and ITeS exports is much larger than the official figures quoted above. Astudy by Bearing Point in 2005-06, states that 3 out of every 4 dollars earned in IT exports remains outside the country. That would peg the current size of IT and ITeS exports to 334 x 4 = US$ 1,336 million. I believe thats a gross over-estimation.Anotherdocument prepared by Technomics for PSEB in 2010provides a much better perspective and guidance for estimating the size of the Pakistani IT industry based on comparisons with India and Ireland. The study suggests that the best way to estimate the size of the industry is through representative surveys of companies operating in the industry. Based on that survey, and after correcting for non-response bias, it was estimated that the size of IT exports in Pakistan ranged from US$ 469 million to US$ 762 million while the local spend on IT in Pakistan ranged from US$ 227 million to US$ 393 million.

What human resource required for the project?

The essential thing to know is that either you have to hire people (lawyers, accountants, salesmen, project managers), or you have to learn lots of stuff yourself, given that trial and error technique would often cost you a lot of money.

Be aware of the local laws. When you're a small company and you're sued by your customer for thousands of dollars because some mandatory sentence is missing from your invoice, it's not obvious to handle.In the same way, when a customer doesn't pay you for months, when you go to a lawyer and learn thatthe contract you signed doesn't force your customer to pay you, you wish you had consulted a lawyer before signing anything. I spent four years in law college; I'm always surprised by the poor quality of contracts written by people with no knowledge in law. Most of the contracts I've seen clearly say that the developer may never be payed, or thatthe customer can request any change at no cost.Remember, some customers will spend a huge amount of time trying not to pay or to pay less. They will invoke the fact that your product doesnt match their expectations, or that they always thought that the changes you made at their request were for free, or that they don't need the product any longerThis is a job of a lawyer. Lawyers are expensive, but they save you money.Be sure that the taxes will not be higher than your income. In France, for example, when you start you can easily be in the situation where multiple semi-governmental organizations (such as the mandatory insurance company) will claim thousands of dollars per year, yet your income is several hundreds of dollars per year.Nobody cares by such nonsense, because it's a way for those organizations to make a lot of money. Even when you don't have any income, you still have to pay. Given that some of them are managed as insurance companies and benefit from their monopoly, you find yourself in front of an entity which behaves much like mafia (i.e. no matter what's your situation, you'll have to pay), but sometimes without the cover benefits.Seeing taxmen arrive at your company and asking to check the accounts, then finding a few mistakes which will cost you a few thousands of dollars is not a nice thing neither.This is a job of an accountant: avoiding accounting errors which usually cost too much, and defend the money of your company from the intentional errors of powerful entitiesWhat makes you better than all the freelance developers?What makes you better than all the larger software development companies? How do you explain to the customers that you're better?I had a few discussions with my colleagues who wanted to create their own companies. "What do you have that others don't?", I asked every time. Either they can't answer, or they answer something like "I'll ask for a lower price", but they are unable to explain how would they do the cost savings.Be sure you know the aspects in which you are better than the competitors. Be sure you are able to market yourself, explaining not only what's better, but also why. Example: a company A ships software at a lower cost, because they use lean management, removing the waste related to tasks which are not needed in order to deliver the product. Another example: a company B ships high-quality software by using intensive formal code reviews, testing, formal proof, and other techniques used in companies writing live-critical software. Last example: a company C delights its customers by using radical management and Agile.how you will find your customers?Do you advertise? Where? How? How much would it cost? Are you ready to answer customers' questions? For example, if somebody asks for the names of companies you worked before in order to ask those companies for feedback, or if somebody asks to show the software products or web apps you've done, do you have an answer? This is a job of a salesman: somebody who knows your business, knows your strong points, and can quickly, easily and honestly explain why your company is the best.How do you calculate the price the customer has to pay?If you're paid per hour of work, how can the customer be sure that you don't ask to be payed for 213 hours when in fact you worked 186 hours? How do you keep track of a project? How do you know that the project is about to fail, and when you know it, how do you prevent it? This is a job of a project manager. Leading a project from "I have a great idea, it's in my head now" to the fully-featured product requires more than knowing how to write programming code

Are you sure you're ready to deal with customers?What will happen when a customer isnot polite? What if a customer says that your product sucks or does not conform to the requirements when in fact it follows them exactly? What if a customer, after two months of development of a three months project tells you that you must rewrite your ASP.NET project in PHP? What if the customer doesn't even know what her project is about?This, again, is a task of the project manager, the salesman or the support. Dealing with customers after you signed the contract requires a lot of tact, patience, professionalism and, often, anger-managementConclusionIn short, the software business has been extremely rewarding for many, but this industry isFraught with pitfalls. Many software and e-tech related businesses have shot up like rockets,But have flamed out shortly thereafter. Sometimes the best answer is to partner with a firmThat has a good track record of support, products, marketing, and industry reputation. ByGrappling with the above issues and honestly answering the sample list of questions, you willHave a better chance coming out a winner.CSPD Final ReportPage 2