Software Leaders See Rise in Development Budgets

Sixty percent of respondents to a recent survey sponsored by SoftServe, a provider of software consulting, development, testing and more, reported increases in 2009 IT development budgets, despite the uncertain global economic climate.

The survey, of more than 6,000 senior-level business leaders and software development professionals, also found that 26 percent of respondents said that their software development budgets had increased by more than 10 percent over 2008 expenditures.

“During this economic recession, the competitive application outsourcing arena has become even more fierce as customers push for lower cost and improved operational efficiencies. Flexible, consistent delivery and management models, alongside scalability, reliability and high performance, will be critical as new hosting models become viable alternatives to the enterprise,” wrote Rona Shuchat, director of Application Outsourcing Services at IDC, in a statement.

Other key findings of the survey include that nearly three-quarters, or 71 percent, of respondents listed new product or software development as a top priority for their organization, with cost- and expense-cutting following with 51 percent; improving usability for the end user ranked third with 49 percent.

In addition, 62 percent of respondents said their software development efforts were focused specifically on enterprise applications, while 51 percent said they were focused on Web-based applications. Meanwhile, 42 percent said they favor agile software development methodologies, with only 18 percent claiming to support the waterfall method. And just over one-third, or 36 percent, said they employed Capability Maturity Model Integration (CMMI) as their process maturity and quality model, with Six Sigma used by 25 percent, according to the survey.

Discussing overall satisfaction with their development processes, 87 percent of respondents reported comfort with their company’s basic coding skills, but overall design, process and execution approaches to development were reported to come up lacking, the survey showed. In fact, 36 percent of respondents indicated a need for improved project management and identified project scope and estimation as an area for concern. And 34 percent said they needed help in defining business requirements for development projects.

Also, regarding the use of outsourcing, 38 percent of organizations reported the use of some type of software development outsourcing. While outsourcers varied widely by location, two-thirds, or 67 percent, of companies using offshore outsourcing did so in India, while Ukraine ranked among top outsourcing destinations, along with China and other Eastern European countries, as the top development locations to watch.

“Even amidst reports of global economic uncertainty and confusion, many companies are choosing to steel themselves for recovery by investing more, not less, in business-critical software development initiatives,” said Taras Kytsmey, president of SoftServe, in a statement. “Though overall findings of this survey point to project management and design of such initiatives as ongoing challenges, the most important thing is that these organizations recognize the need for improvement in the people, processes, tools and communication employed in these efforts. This data gives companies a starting point for streamlining development efforts onward into 2010 and ensuring that development initiatives translate into greater return on software investments.”

In another key finding from the survey, companies reported the execution of software customization and integration in varying systems and environments, with Microsoft Dynamics/SharePoint the most used at 42 percent of organizations, and Oracle and SAP integration taking place at 38 percent and 29 percent, respectively.