Transcript SQA Introduction

1. Conceptualizations’
Nature of SOFTWARE
(SW)
ธรรมชาติของโครงการซอฟต์ แวร์ VS. ธรรมชาติของซอฟต์ แวร์
ระบบสิ่งมีชีวติ มี DNA:- IQ/ EQ
ระบบธรรมชาติสิ่งแวดล้ อม Environmrntal Natural System:- ENTITY มีอยู่จริ ง เป็ นอยู่จริ ง Metaphysic: Existenece, Ontology ; Being :-Tangible/ Physical
(Thing, Botany, Zoology, Human-being), Intangible/ Logical (Concept, Events, Phenomenon, Situation)
ไม่ แน่ นอน เปลี่ยนแปลงตลอดเวลา ไม่ มีตัวตนยึดติดที่แท้ จริง จับต้ องยาก
ระบบธรรมชาติส่ งิ แวดล้ อมสัจธรรม คือ ระบบสารสนเทศ (Information Systems (IS) of ENTITY)
Carl Shapiro and Hal R. Varian: Nature of SOFTWARE:- Information Goods, High Value
Chain VS. Processing by DRIVEN FORCE (IQ/EQ) of INFORMATION PROCESSORS
(IPO Logic Methodology) :- Produced Outputs:- Soft Goods (FACT, DATA, Information,
Knowledge, Wisdom, IPR)
ระบบธรรมชาติส่ งิ แวดล้ อมของซอฟต์ แวร์ (NAURE of SOFTWARE)?
ธรรมชาติของโครงการซอฟต์ แวร์ VS. ธรรมชาติของซอฟต์ แวร์
ระบบธรรมชาติส่ งิ แวดล้ อมของซอฟต์ แวร์ (NAURE of SOFTWARE)? ต่ อ
1. Intrinsic Context Value:- Property and Attributes/ Cohesion of IPR of Global
Economy based on Intangible/Information Goods, High Value Chain and
Light Weight, Processing by IPO LOGIC Methodology on IQ/EQ of
INFORMATION PROCESSORS,
2. Extrinsic Context Value:- Environment Dependency :- PEST(P: Politics, E:
Economy, S: Social, T: Technology (Socio-cultural Innovation)
3. Relationship/ Covariance of Extrinsic and Intrinsic Value :- CHANGE
MANAGEMENT RULE/ Code of Conduct/ Ethics (Good Governance, CSR)
Based on
MATURITY of
Generalization/ Standardization
and Concept of Stockholders,
Shareholders, Stakeholders:-
ธรรมชาติของโครงการซอฟต์ แวร์ VS. ธรรมชาติของซอฟต์ แวร์
ระบบธรรมชาติส่ งิ แวดล้ อมของซอฟต์ แวร์ (NAURE of SOFTWARE)? ต่ อ
Shareholders/ Stakeholders of INFORMATION PROCESSORS:• Technical of W3C,ISO, Engineer Task Force, CMMI etc;
• Industrial/ Marketer Entrepreneurship of COTS:- ANSI, .NET etc;
• Society Community of Open Sources:- JAVA and Other etc;
• Government:- EDIFACT-XML etc;
•Technical and Engineer Roles :- Interdisciplinary Relationship/ Covariance:ENTERPRISE ARCHITECTURE (EA) DESIGNED
by INFORMATION PROCESSORS VS.
TOP DOWN, Bottom Up
•Management Roles:- Good
Governance, CSR VS.
Management Activity (Strategic,
Management, Knowledge
Specialist, Operating)
2. Introduction of SQA and
Maturity of Information
Processors
Differences between Software and
Other Products
1.
Product Complexity VS. Information Goods
2.
Product Visibility VS. IPO Logic Intangible
Goods
3.
Product Development Process VS. Life Cycle
CMMI
text pages 4-6
"Software Crisis“ การตอบสนองความต้องการมาตรฐาน SW
คงที่ แต่ความต้องการใช้ SW มีมากกว่าไม่สิ้นสุ ด
Programmers
demand
supply
Time

term coined by DoD years ago

Problem Today: complexity of problems addressed by software
has outpaced/ ไปได้เร็วกว่า improvements in software creation process
The Big Question
 Q:
 A:
How do we assure quality?
We have a good process. VS.
Hidden agenda IPR ?
Next…
Define Quality
 The nature of software errors


examples of costly software errors
3. Patent
Infringement/ ระเมิด COTS
and Development
Doctrinal Sequence หลักกับความจริง ?

FIRST: What is the literal/ ลายลักษณ์
อักษร/ตัวอักษร meaning of the claim
language?

THEN: If the accused product falls
outside that language, is it an
“equivalent” of the claimed
invention?
The questions presented are:
(1) Whether digital software code—an
intangible sequence of “1’s” and “0’s”—
may be considered a “component[ ] of a
patented invention” within the meaning of
Section 271(f)(1); and, if so,
(2) Whether copies of such a “component[]”
made in a foreign country are “supplie[d] .
. . from the United States.”
4. Capturing the Essence of
Software Engineering
VS. Enterprise Architecture
The Malleable Nature of Software ดัดแปลง
ได้ง่าย ?
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Evolution is more important in software than
in other engineering disciplines
Software engineering rarely involves “green
field” development
Software needs to be constantly maintained
and evolved to meet new business
requirements
The cost incurred in evolution usually exceed
the development cost by a factor of Level 3 or
4
Goals

Defining the basic definition of software engineering

Providing a strong mathematical basis

Identifying the truly universal elements

Defining a kernel language that describes the “method
elements” -- practices, patterns, and methods

Providing assessment techniques evaluating software
practice and theories
What is “Software Engineering” ผลลัพธ์เขียน
โปรแกรมศิษย์ตอ้ งมีครู ?

Software Engineering = “Software” + “Engineering”

“The application of engineering methods and discipline
to the field of software”

Software engineering is indeed an “Engineering”
discipline, it should be treated the “engineering way”
Difference between Science and
Engineering


Science seeks to understand what is, whereas
Engineering seeks to create what never was
--- [Henry Petroski 2010]


It is not appropriate to describe engineering as mere
applied science
Some extra-scientific components to engineering:

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Creative nature
Situated culture particularity to a specific application domain
Difference between Science and Engineering

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
When defining “software engineering” and the
“Universals”
It is essential to keep in mind the similarities and
differences between science and engineering
Science



In engineering


Deals with the universal laws
Context and time independent and true everywhere
Analysis follows synthesis and observation
Engineering


Situated culture
Needs to have constant learning, refinement and adaptation
to meet the environmental requirements
Difference between Science and
Engineering
In engineering
Analysis follows synthesis and observation
Not the other way around
Engineering model vs. Software Model
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Full specification
Design
Manufacture
Test
Install
maintain

Incomplete specification

First three stages are often
blurred
Final product is intangible
Doesn’t wear out

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A Hierarchical Structure of Universals

Layer 1: the “engineering” aspect
Best practices of engineering
discipline applicable to software:
Project:
• Transformation
• Flow
• Value generation
Management
• Planning
• Execution
• Controlling
A Hierarchical Structure of Universals

Layer 2: the “software” aspect
Unique practices to software:
• Extensibility
• Interoperability
• Evolveability
• Reusability
• Maintainability
A Hierarchical Structure of Universals

Layer3: “variability” -- situated culture
Reflect and address the knowledge
of different more situated
application domain
• Real-time systems
• Self-adaptive systems
• Self-management systems
• Web systems
• … more
Software Engineering:
A University Perspective

Poorly perceived: “anyone can teach it”

Scarcely founded (e.g., Federal and
States)

Challenging Quality publications
Prevalence of fads -- “acronym
soup”
Moving
Targets
5. The Nature of
Information Technology
Projects CMM Level 1
Questions
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What is a project?
What is project management?
How does project management relate to other
disciplines?
What is the career outlook for project managers
in information technology?
What Is a Project?

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A project is “a temporary endeavor undertaken
to accomplish a unique product or service”
(Project management body of Knowledge
(PMBOK®) Guide 2000, p. 4)
Attributes of projects
 unique purpose
 temporary
 require resources, often from various areas
 should have a primary sponsor and/or customer
 involve
uncertainty
Case #1: Caleb’s Mission Critical
Schedule System (MCSS) for Continental
Airlines
If an airline company has to make up a cancelled flight in an emergency, for example, a plane
crash, it may take it several hours to reschedule the relevant flights as well as the crew teams,
and a couple of days to settle down other legacy problems. Caleb has developed a mission
critical schedule system for airline companies, which can find the solution in minutes and solve
other legacy problems in a few hours.
Continental Airlines, as a client of Caleb Technology (Austin) for years, has carefully evaluated
the system and decided to adopt the application. Delighted by the winning of the contract,
Caleb is facing the following several questions:

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EDS is the original application developer and will be working with Caleb in the user interface as
Continental Airlines required. How to cooperate with Continental Airlines is the key issue.
MCSS must be integrated into existing enterprise information system of Continental Airlines. How this
will be done?
How test MCSS in the real environment to guarantee its reliability and availability.
How to switch from old system to the new system integrated with MCSS?
Case #2: Online medical services
appointment system

Making the appointment with a PCP or specialist doctor is normally via phone call.
Even though e-commerce and many other online services are prevailing, such a
service in medical area has never been done yet. We there were such a system, this
system would have allowed patents to check the availability of a doctor or any other
medical services from the Internet, making and changing the appointment. So, this is
a promising system in several ways:




It will greatly make the appointment convenient
It can be connected to other networked medical information services, such as medical
insurance.
It will also benefit the medical service providers much in saving costs and improving service
quality.
There several issues :





Who will initialize the project?
Who should be involved ?
Who is to be a target buyer of the system?
How this system can be co-operated with other medical information systems?
Is this system really beneficial?
Case #3: Adams Globalization
online translation services
development
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Adams Globalization is a leading translation service company in Austin, Texas. The
company provides the translation between English and several other languages, such
as Spanish, German, French, Japanese, and Chinese. The company started in 1982.
In 1993 it hired 4 employees and in 2003 it hired 40 employees and operating a
translator network with more than 1000 freelance translators. The company’s revenue
in 2002 was $4,000,000. Adams Globalization has been facing more and more
pressures to convert its business model from traditional translations to an Internetbased one:
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There is an increasing Internet-based application translation demand.
Intensified Internet usage requests the company to change its business processes
The company is moving towards a global market.
Therefore, there are several reasons for Adams Globalization to adopt e-business.
There are several issues:


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What is the new business model?
How to develop a web-based business system?
What is the project scope? …
The Software Crisis
If builders built buildings the way
programmers wrote programs,
then the first woodpecker that
came along would destroy
civilization.
-Gerald Weinberg
Status of IT Projects
31% IT projects were cancelled before
completion
 53% were completed, but were overbudget, over-schedule, and did not meet
the original requirements.
 The average cost overrun of mediumsized projects was 202%

Why Projects Fail – CHAOS
STUDY
What is Project
Management?
Project management is “the application of
knowledge, skills, tools, and techniques to project
activities in order to meet project requirements”
(PMI*, Project Management Body of Knowledge
(PMBOK® Guide), 2000, p. 6)
*The Project Management Institute (PMI) is an international
professional society. Their web site is www.pmi.org.
Improving the likelihood of success

Socio-technical Approach


Cooperation between developers and users
Project Management Approach
Depending more on processes and infrastructure
 Resources management
 Delivering the outcomes in a professional way as
expected
 Coping with greater internal and external competition



Improving efficiency and effectiveness
Knowledge Management Approach

lessons learned

best practices
The 2001 Standish Group Report
Showed Decided Improvement in
Project Success

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Time overruns significantly decreased to 163%
compared to 222%
Cost overruns were down to 145% compared to 189%
Required features and functions were up to 67%
compared to 61%
78,000 U.S. projects were successful compared to
28,000
28% of IT projects succeeded compared to 16%
Why the Improvements?
"The reasons for the increase in successful projects
vary. First, the average cost of a project has been
more than cut in half. Better tools have been created
to monitor and control progress and better skilled
project managers with better management
processes are being used. The fact that there are
processes is significant in itself.“*
*The Standish Group, "CHAOS 2001: A Recipe for Success" (2001)
Factors For Successful Projects
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User involvement
Executive management support
Clear statement of requirements
Proper planning
Realistic expectations
Smaller project milestones
Competent staff ownership
Clear vision & objectives
Hard-working, focused team
Chaos Study
Why do we learn project
management?
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It is different from system analysis
It will allow you to apply all the knowledge you have learned in IS,
such as programming, data management, and system analysis, into
the practices
But more – management
Consider you get a programming job. In the first week in the
company you are asked:
To work with someone to do some Java programming but you don’t
know what it is for;
 To join a project group for internal software resource sharing project but
you don’t know who are your colleagues before a meeting; or
 To look into the latest WiMAX (IEEE 802.16e) technology to see the
potential application to your company’s business. You here of it but
wonder why
 To investigate the search engine market and write a proposal – it is a
task for a programmer?


What should you do?
The context of project
management
Project Attributes:
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Time Frame
Purpose
Ownership
Resources
Roles
Risks &
Assumptions
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Interdependent tasks
Organizational
change
Operating
Environment
The Triple Constraint of Project
Management
Roles in a project
 Project
Manager
 Project Sponsor
 Subject Matter Expert(s) (SME)
 Technical Expert(s) (TE)
Risks & Assumptions

Internal risk
 From
the estimation process or from the
fact that a key member of the project team
could leave in the middle of the project

External risk
 Arises
from the dependencies on other
contractors or vendors

Assumptions
 What
we used to estimate scope,
schedule, and budget and to assess the
risk of the project
The Project Life Cycle and
IT Development
Definitions
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Project Life Cycle (PLC)
 A collection of logical stages or phases that
maps the life of a project from its beginning to
its end for a project
Deliverable
 A tangible and verifiable product of work
Phase exits, stage gates, or kill points
 Phase-end review of key deliverables that
allow the organization to evaluate the project’s
performance and take immediate action to
correct errors or problems
Generic Project Life Cycle
Phases/Stages of PLC
Define project goal
 Plan project

 Answer
questions (What, why, how, who, et al)
 Baseline plan
Execute project plan
 Close project
 Evaluate project

Systems Development Life
Cycle
Systems Development Life
Cycle
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SDLC: sequential phases or stages an
information system follows throughout its useful
life.
Phases/Stages
 Planning
 Analysis
 Design
 Implementation
 Maintenance
and Support
Systems Development Life
Cycle (SDLC)
1. Problem
Definition & Feasibility
6. Operations &
Maintenance
2. Analysis
5. Implementation
3. Design
4. Development,
Coding
Implementing SDLC:
Structured Approaches:
Waterfall Method
Implementing SDLC:
Rapid Application Development (RAD) Approaches:
 Prototyping

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Spiral Development

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Develop a small test system in a short time and
improve it.
The project is broken into mini-projects each
addressing one or more risks until all risks are
addressed
Extreme Programming (XP)

The system is transferred to the users in a series of
releases. Each release is a working system that only
includes one or several functions.
The PLC vs the SDLC
PLC vs. SDLC
PLC focuses on the processes of
managing a project
 SDKC focuses on creating and
implementing a product – the information
system
 SDLC is part of PLC – most of SDLC
activities occur during the execution phase
of PLC.

Enterprise System
Implementation Phases
1. Initiation
6. Operations &
Maintenance
2. Planning
3. Analysis &
process design
5. Transition
4. Realization
(Fulfill ERP)
What is PMBOK

The Project management body of
Knowledge (PMBOK)
A
document providing a basis for identifying
and describing the generally accepted
principles and practices of project
management
 Originally published in 1987
 Available from Project Management Institute
(PMI)
Project Management Framework
Project Management
Knowledge Areas
1.
2.
3.
4.
5.
Project integration management
Project scope management
Project time management
Project cost management
Project quality management
Project Management
Knowledge Areas
6.
7.
8.
9.
Project human resource management
Project communication management
Project risk management
Project procurement management
Sample Gantt Chart
The WBS is on the left, and each task’s start and finish date
are shown on the right using a calendar timescale. Early Gantt
Charts, first used in 1917, were drawn by hand.
Sample Network Diagram
Each box is a project task from the WBS. Arrows show dependencies
between tasks. The bolded tasks are on the critical path. If any tasks on the
critical path take longer than planned, the whole project will slip
unless something is done. Network diagrams were first used in 1958 on the Navy
Polaris project, before project management software was available.
The Project Management
Profession
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The job of IT Project Manager is in the list of
the top ten most in demand IT skills
Professional societies like the Project
Management Institute (PMI) have grown
tremendously
Project management research and
certification programs continue to grow
Top Ten Most in Demand IT Skills
Rank
IT Skill/Job
Average Annual Salary
1
SQL Database Analyst
$80,664
2
Oracle Database Analyst
$87,144
3
C/C++ Programmer
$95,829
4
Visual Basic Programmer
$76,903
5
E-commerce/Java Developer
$89,163
6
Windows NT/2000 Expert
$80,639
7
Windows/Java Developert
$93,785
8
Security Architect
$86,881
9
Project Manager
$95,719
10
Network Engineer
$82,906
Paul Ziv, “The Top 10 IT Skills in Demand,” Global Knowledge Webcast
(www.globalknowledge.com) (11/20/2002).
Project Management Knowledge
Continues to Grow and Mature
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PMI hosted their first research conference in June
2000 in Paris, France, and the second one in
Seattle in July 2002
The PMBOK® Guide 2000 is an ANSI standard
PMI’s certification department earned ISO 9000
certification
Hundreds of new books, articles, and presentations
related to project management have been written in
recent years
Project Management
Certification

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PMI provides certification as a Project
Management Professional (PMP)
A PMP has documented sufficient project
experience, agreed to follow a code of ethics,
and passed the PMP exam
The number of people earning PMP
certification is increasing quickly
PMI and other organizations are offering new
certification programs (see Appendix B)
Growth in PMP Certification, 19932002
Software outsourcing
Supplemental material
Offshore Software Outsourcing
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In next few years, about 2 million IT jobs will shift to foreign
countries because of outsourcing, e.g. to India.
Companies have to do so because of the tough surviving
environment.
This is the trend of globalization as the economies in different
countries are more dependent of each other.
While India’s position is reasonably secure, there is no room
for being complacent. Several upcoming destinations—
Argentina, the Czech Republic and China in particular. India
scores over China in employee costs, primarily due to that
country importing project managers from Hong Kong and
Australia. East Europe is home to top-notch engineering
talent; it is quite likely that high-end engineering work will
flow there.
Software Industry in Developing
Countries
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Many developing countries have adopted the
development of Software Industry as a long-term
strategy for economy growth
As software outsourcing is a global trend for developed
countries, there are good opportunities for developing
countries to speed up their software industry
development
The suggested two-stage development strategy for the
software industry in developing countries:



Focus on the domestic market first
Go to global market once the software companies are competitive
enough
Current two patterns of software industries reflect the
two-stage development strategy:

International market oriented – normally providing outsourcing
market for the developed countries, which is the pattern for those
The Pattern of Export-Oriented:
India
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Comparatively, in 2002-2003, the software industry
in India was worth US$ 12 billion, of which software
export was $9.5 billion with a growth rate of 25.3%.
The software industry is expected to account for
something like 20% of India’s exports for 2002-03.
(http://www.expresscomputeronline.com/20030331/s
oftserv.shtml).
Heeks (1996) indicated that if the software exports
grows rapidly, the growth of the domestic market is
prevented.
The Pattern of Domestic Market
Oriented: China

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In the past 10 years China’s software industry revenue
has been growing at an annual rate between 20-40%.
The revenue of software industry in 2002 reached
US$13.3 billion, a 46.5% increase from 2001.
In the last three years its software export almost
doubled every year. However, China’s software
market is domestic-oriented - nearly 90% software
products were sold domestically.
In 2002, China’s application software accounted for
64.5% of the total domestic software products.
Foreign software and system integration still account
for 95.3% of the upper software market
India Pattern vs. China Pattern

Comparison of software revenue in 2002:
India: $12.5 billion, with $9.5 billion from the export
 China: $13.3 billion, with $1.5 billion from the export


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India’s case is a successful example, while
China’s case is more representative for the
developing countries just started their software
industry.
Heeks (1999) outlines some generic approaches
to a developing country’s software industry
development. Two dimensions, the target market
served (Domestic vs. Export) and the types of
business intended (Service vs. Packages), are
Potentials of India’s software
industry

Several markets that could result in large opportunities for Indian.

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Product Data Management (PDM) is one such area, covering applications
that manage product data and product development workflow. The global
market for PDM is projected to grow to $11 billion by 2006, according to
CIMData. Automotive, electronics and telecom, aerospace, machinery and
process industries are major users of PDM.
Content management is another growth area with the thrust being on
delivering digital content across multiple channels. This market is projected
to be worth $27 billion by 2006. Services account for roughly 90 percent of
this market.
Enterprise Application integration (EAI) is a potential gold mine for Indian
software houses. It is projected to be a $43.4 billion market by 2005;
services account for 73 percent of this market. Business Intelligence and
data warehousing will together account for a $29 billion market by 2005.
The market for wireless and mobile infrastructure consulting, integration
and management services will be worth $37.4 billion by 2006.
Straight-through processing (STP) is the complete automation of
stock trading from order entry to final settlement. The global market
for STP is expected to touch $6.3 billion by 2004. India can offer
customised application development, maintenance and support,
consulting and transaction processing outsourcing in this segment.
References in offshore
outsourcing
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http://news.com.com/2030-1011-5130813.html
http://www.expresscomputeronline.com/20030331/softserv.
shtml
Heeks, Richard, “Software strategies in developing
countries”, Development Informatics working paper series,
1999.
Li, M., and M. Gao, “Strategies for Developing China’s
Software Industry,” Information Technology and
International Development (2003).
•SW Good Process VS. การได้ มาซึ่งซอฟต์ แวร์
ที่มีคุณภาพ CMM VS. AGILE Process VS. IPR
•ซอฟต์ แวร์ (Software: SW ?)
•http://en.wikipedia.org/wiki/List_of_programming_language
s
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Project Framework
Initiate
Prepare
Execute &
Control
Close
Track
& Control
• Scope Management
• Workplan Management
Startup
Definition /
Scope /
Requirements
Planning
and
Resource
Allocation
• Resource Management
(Time, Cost, People)
• Deliverable Mgmt
• Quality Management
• Transition Plan
• Int/Ext Vendor
Management
Review
Risk & Issue Management
Sponsor Management
Communication Management
Reporting
Completion &
Assessment
Information Rules:
Strategic Guide
to the Network Economy
By
Carl Shapiro and Hal R. Varian
The Information Economy
Economy:
All the activities involved in the production and distribution
of goods and services.
Information Economy:
It is an economy based on the exchange of knowledge
information and services rather than physical goods
and services.
The Information Economy (2)
Information:
Any Essentially, anything that can be digitized—encoded as a
stream of bits—is information. E.g. baseball scores, books, databases,
magazines, movies, music and Web pages are all information goods.
The book focuses on the value of information to different consumers.
Cost of Producing Information:
“ Information is costly to produce but cheap to reproduce.”
Theme of the Book:
3 Strategies for Information Economy:
1)
Differentiation of Product and Services.
2)
Lock – In.
3)
Positive feedback.
Differentiation of Products
and Services
Strategies used:
a) Mass Customization
b) Differential Pricing
e.g.
c) Personalized Content
d) Versioning
How to design your "product line"?
1)
Offer Versions
Dimensions: Delay, User Interfaces ,Image Resolution, Speed of Operation,
Format, Capability, Features, comprehensiveness, support
2) Principle of “self-selection” :
Design these versions to accentuate the needs of different groups of customers.
Lock In Cycle
Phase 4
Lock-In
Phase 1
Brand Selection
Phase 3
Entrenchment
Phase 2
Sampling
Lock In
How do Buyers Recognize that they are in Lock In?
• Contractual Commitments
• Durable purchases
• Brand specific Training
• Information and Databases e.g. CD and DVD
• Specialized suppliers.
• Search costs. e.g. Travel Agent, Insurance Agent etc.
• Loyalty Programs
Managing Lock- In for Buyers
How to avoid Lock-In?






Bargain for initial sweeteners, such as discounts or support
for switching from your previous system.
Don't be too anxious.
Depict yourself as an attractive customer down the road
Seek protection from monopolistic exploitation
Keep your options open via second sourcing
Watch out for creeping lock-in, and retain information
about usage records.
Managing Lock-In for Sellers

Be prepared to invest to build an installed base through
promotions and by offering up-front discounts.

Cultivate influential buyers and buyers with high switching
costs.

Design your products and your pricing to get your
customers to invest in your technology, thereby raising
their own switching costs.

Maximize the value of your installed base by selling your
customers complementary products and by selling access
to your installed base.
Positive Feedback
“ Positive feedback makes the strong grow
stronger . . . and the weak grow weaker.”
Positive Feedback (cont.)
How it Helps?
1) Adoption dynamics in the presence of positive feedback tend to
follow a predictable pattern. e.g. NES
2) Consumers value information technologies that are widely used,
just as they value communications networks with broad reach.
3) Positive feedback works to the advantage of large networks and
against small networks.
Positive Feedback (cont.)

Generic strategies for innovators in
network markets:
Control
Compatibility
Performance
Openness
Controlled Migration
Open Migration
e.g. Win 98 and Intel PII
e.g. Modems
Performance Play
e.g. Nintendo Entertainment System
Discontinuity
e.g. CD Audio and Floppy Drive
Information Policy

Don't expect the government's role to diminish.

Every company needs to know the rules of
competition.

Companies have considerable freedom to engage
in differential pricing.

Competition policy is intended to ensure a fair
fight, not to punish winners or protect losers.
Information Policy

Don't be afraid of cooperating with other
companies to set standards and develop new
technologies, so long as your efforts are designed
to bring benefits to consumers.

If you are fortunate enough to gain a leading share
of the market, be sure to conduct an audit of your
practices.
Battle of the Browsers
Netscape
Microsoft
Preemption

Head start with Navigator in 1995, most
companies had already installed their
software

Microsoft came with IE in 1998 and
marketed through OEM, ISP etc.

Made IE free online and making it Default
Browser.

Investing heavily on User Interface
Penetration Pricing

Made browser available free of charge,
pioneered the idea of Plug-Ins ( third
party software )

Earns revenue through its other products
e.g. Netscape Web site
Battle of the Browsers (cont.)
Netscape
Microsoft
Expectation mgmt:

Netscape has partnered with
100 industrial companies in
order to bundle their product

Integrating IE in Windows OS
and making user believe that
they do not have a need to
install a new browser.

Microsoft as stated earlier has
already developed alliances
with OEM,ISP and Content
Providers by providing Financial
Schemes
Alliances:

Netscape and Sun
Microsystems are strong allies,
with Netscape supporting Sun's
Java and Sun helping lend
credibility to Netscape
Critique

The definition of Information on which the book focuses is very
broad according to author.

Authors fail to mention about the importance of Sales and Marketing
in an economy .

Third party role in Information Economy is not taken into
consideration.

An economy is not complete until its unit of transactions are defined.
The author fail to define how to estimate the value of a product
which is available in bits form.