What’s a Software-Intensive Business?

Posted by Robert Merrill on November 22, 2008 under Software-Intensive Businesses | Be the First to Comment

I coined the phrase “Software-Intensive Business” after three decades as employee, contractor, and consultant. I found myself saying, “These folks have backed into the software business, and they don’t know it.”

I think a list of attributes is easier to understand than a formal definition.

• Software-Intensive Businesses don’t explicitly license software or sell software-development services
• Software-Intensive Businesses are up to something that causes them to pay programmers on a more or less regular basis
• Software-Intensive Businesses hear about it from customers and/or see it on the income statement if the programmers mess up
• Software-Intensive Businesses often don’t recognize software development as a core competency

A Software-Intensive Business is one that doesn’t know what it doesn’t know about software development, and what it doesn’t know can hurt it.

Software as a Strategic Asset

In their book IT Governance, Peter Weill and Jeanne Broadbent explain that Information Technology (IT) is a core asset of modern business, along with human assets, relationship assets, financial assets, physical assets, and intellectual property assets. Companies that intentionally manage their IT assets through a sound governance process significantly outperform those that don’t.

In a Software-Intensive Business, custom or customized software, as a subset of IT assets, is of strategic importance.

Managing software assets is different than any other form of management, including IT infrastructure. Software-intensive businesses can get into trouble when they do not have software-management expertise on their executive team.