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Software Losses Run into the Millions

Software Losses Run into the Millions

Wellington, April 26 2005

New Zealand businesses potentially waste between $200 and $300 million a year on software development projects which, more often that not, don’t meet business objectives or never see the light of day.

“The latest New Zealand figures tell us that, conservatively, New Zealand business spends between $300 and $500 million a year on software development.

International research shows that more than two-thirds of software development projects are challenged, (late, over budget, and/or with less than the required features and functions), or fail completely.” says Borland’s New Zealand and Australian Sales Director, Chris Gray.

“These are staggering figures, particularly given that, when you ask companies undertaking software development how important they feel it is for their company, the answer is – critically important.”

Gray says the complexities of integrating technology into business have almost exponentially increased as competitors within an industry fight for that special advantage.

“And that advantage is often driven by the development of unique software applications which aim to give companies an edge in their market space,” says Gray.

But although the skills of the New Zealand software development practitioner remain extremely high, Gray says there is often a lack of communication between those creating the business case for the software project, those designing it, and those writing, testing and implementing it.

“The result is a significant failure rate and commensurate losses to the bottom line,” says Gray.

Gray depicts the traditional software development process as a series of steps, each staffed by highly-skilled artisans doing great work in their own right, but who do not necessarily have visibility of the business reasons behind the project they are working on.

He endorses the view of the Gartner Group, that much of the engineering behind today’s business software is similar to mechanical and electrical design in the 1940’s and 1950’s, and highlights the opportunity for radical improvements by leveraging automation throughout the software development process.


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