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Bridging Software Engineering Economics and Digital Business Strategy: A Design Capital and Design Moves Perspective on Managing Software Products

Speaker  Narayansamy Ramasubbu

Affiliation  University of Pittsburgh

Host  Nachi Nagappan

Duration  01:17:52

Date recorded  12 July 2013

As software becomes integral to the products and services in a growing range of industries, there has been a corresponding surge of interest in understanding how firms can effectively formulate and execute digital business strategies. This tight fusion of software products within the business environment gives rise to a strategic tension between investing in software design for long-term value creation and exploiting the malleability of software for short-term value appropriation. Further, relentless innovation and competitive pressures dictate that firms continually adapt software artifacts to changing market and technological conditions, but sustained profitability requires scalable architectures that can serve a large customer base and stable interfaces that support integration across a diverse ecosystem of complementary offerings.

Research scholars in software engineering and technology management fields have an inherent interest in studying the above-mentioned tensions and tradeoffs, but a common ground has been lacking to bridge their divergent perspectives. As a researcher who often straddles these fields, my work attempts to develop such a common ground between the software engineering and technology management literatures.

In this talk I will present the concepts, empirical methods, and results from three projects, and discuss how this body of work helped me to develop a research agenda that spans the software engineering and technology management fields. The key themes that I’ll touch upon are:

  • How complexity biases the cost-benefit calculation used to evaluate customer requests for new product features. The relationship between customer demands, complexity, and investments in incremental Innovations are messy, and are often influenced by organization structures, competitive pressures, and incentives for resource allocation processes.
  • A conceptualization of the logic of digital business strategy in terms of two constructs: design capital (i.e., the cumulative stock of designs owned or controlled by a firm) and design moves (i.e., the discrete strategic actions that enlarge, reduce, or modify a firm’s stock of designs), and modeling two salient dimensions of design capital, namely, option value and technical debt.
  • Developing an evolutionary model of technical debt accumulation to facilitate a rigorous and balanced analysis of the benefits and costs of incurring technical debt at different lifecycle stages of a large commercial enterprise software package.
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