WEEK#3

Professional
Practices
Instructor: Elma
Afsar
Anatomy of a Software House
Contents
• Introduction
• The Company (Software House)
• Structure of Company
• Management of Staff
• Producing the Budget
• Monitoring Financial Performance
• Long Term Planning
• Conclusion
Software House
• A software house is a company that primarily provides
software products. These companies may specialize in
business or consumer software or software-as-a-service
(SaaS) products.
• The common definition is that the company is mainly
invested in developing and distributing software products.
(techopedia)
• A company that writes and cells software (Cambridge
Dictionary)
• A company or set up that is committed to software
development, testing and maintenance( based on
Structure of Software House
• No matter what is the size of the organization, every software house has a
number of project managers and a head of managers. The responsibility of
every project manager is to fulfil the requirement of the clients by building
high functional software for them. Normally every software agency has a
team of up to 10 people that works together for goals and accomplishments.
• However, every best software services company teamwork independently on
their specified projects.
• The team consists of engineers, assistants, Q/C managers, designers,
programmers and etc.
Product Lifecycle of a Software House
The product lifecycle of software houses consists of three stages known as:
• Design: Designing consists of both technical specifications and user interface.
• Coding: Mobile app development company coding involves the entire development of
the software.
• Testing: Testing is conducted through quality management assistants by fixing the
bugs.

• In the end, Suffice to say that every stage of software development plays a vital role in
the software house presentation. Programmers and engineers accomplish technical
requirements as per the instructions of the clients.
How Software House Works?
• It is true to say that renowned software agencies empower businesses and
organizations to automate and streamline their workflow accurately.
• Their business analyst team performs an in-depth audit of the client’s business
operations to build customized software as per the market needs.
• The proactive programmer’s team of software houses enable businesses and
organizations to add functionalities that are required to drive workflow manually and
automatically.
• The software house is also responsible for research and development.
• This is the reason why every software house offers after-sales services including
maintenance, support, and regular updates.
Types of Software Companies
• In today’s tech-driven world, , there are different types of software
provided by IT firms worldwide such as operating systems, device
applications, firmware. Translators, utility software etc. The giant
software developer companies are Microsoft, HP, Adobe, Oracle. and
SAP.
• The operating system connects the user and hardware via GUI to
manage and run programs.
• The device applications are software that enables end-users to operate
different gadgets through operating systems.
• Firmware smoothly controls the performance of any particular hardware
that is attached to a machine.
• Programming language translators are powerful software created by a
team of engineers that help users to understand machine language code.
Types of Software Companies
• Project oriented companies
• Product oriented companies
• IT service providers
• Software enterprises
• A software house can have multiple qualities at time as well. Say, for
example, product oriented and project oriented divisions/ teams may co-exist.
• There are many types of software companies and there is so much diversity
in software development industry
Project Oriented Companies Projects
are their lifeline
• Search for project
• Requirement Analysis and design
• Modules assigned to developers/teams
• Software release Teams/developers move to new projects
Product Oriented Companies Run on
Ideas
• Create projects rather than hunting for them
• Take up software product idea
• Transform their idea into product
• Once a product is live, bugs, new versions, even more ideas
and product growth etc.
• Make large profits by implementing their ideas.
IT Service Providers
• Something other than software development finally exists as a major role
in such kind of software companies.
• Focus on business, income generation and software usage statistics
mainly.
• Usually a part of large production unit.
• Usually they don’t develop their software project/product and outsource
it to the other project oriented companies.
• Examples call centers, telecom services, network services, industries etc
Software Enterprises Dedicated to Some
Enterprises
• Usually focus on what company wants, as usually enterprises now have
their own software house/ team of developers.
• From requirement to development and business analysis they are
dedicated to what that enterprise needs.
Types of Software Companies (yet
another view point)
• Large and globally renowned companies producing COTS e.g. Oracle,
Microsoft, Adobe. Involved in specialized COTS small to middle sized
software houses etc.
• You may think of the software organizations out there in your
country.
• SaaS providers e.g. Google, Facebook etc.
• Software house dealing with bespoke software.
Software Organization
• CEO
• Leaders
• Network Engineers
• Board of Directors
• Founder
• Database Designers
• Marketing Officers
Software Organization
• Graphic Designers
• Project Managers
• Quality Assurance Engineers
• Developers
• HR Manager
• Data Entry Specialist
• Chief Financial Officer
• Chief Legal Officer
The Company (The Software House)
• A Hypothetical Company
• Synaid Software Ltd. was founded by some 10 years ago by four friends.
• All fours are members of board of Directors, along with two others who
were recruited later.
• The company specializes in the production of bespoke software for
clients who demand work of high quality.
• Syniad’s head Office is in London. Other offices are in Manchester, Delft
and Netherland.
Structure of Company
1. Chairman
2. Managing Director
Directors Under the Managing Director:
a. Financial
b. Operations
c. Sales & Marketing
d. Technical
e. Overseas
Operations Director
• The operations director is responsible for all the revenue
earning operations of the company.
• It is his job to ensure that all projects are completed
satisfactorily
• And resources are available to carry out the projects that the
company wins
• The personnel reports to him.
Technical Director
• The technical director is responsible for:
• Quality Management
• Research & Development
• Marketing at a Technical Level (e.g, arranging for staff to give
papers at conferences)
• Technical Training (as supposed to training in, project
management, or presentation skills which are the
responsibility of the personnel function ).
Synaid’s Organizational Structure
Type
Shows elements of the all three of the types of organizational
structure.
1. Functional Division of Responsibilities
2. Geographical element (represented by the directors
responsible for overseas operation)
3. Centralization & Decentralization has little meaning
(Centralized policies and procedures are widely used but they
have usually been developed within one part of the company
and have been adopted by general consent)
Management of Staff
• New Employees Vs Old Employees……… Outsiders
Staff Appraisals:
• Employees’ achievements and contributions to the company were properly
recorded;
• Staff knew what was expected of them and what they needed to achieve in
order to gain promotion;
• Proper plans for training and career development were made and regularly
reviewed;
• Employees were aware of the company’s opinion of their performance.
Producing the Budget
• Staff in the company are divided into
1. Technical or Revenue generating staff
2. Non Revenue Earning Staff
• Both require different capital to work.
Monitoring Financial Performance
• Monitoring Syniad’s performance against the budget should,
in principle, be straightforward.
• Each month, the income and expenditure under the various
heads are compared and, if significant deviations are
observed, corrective action is taken.
• To monitor financial performance company focuses on;
Cost & Revenue
Project Costing
Sales
Cost & Revenue
• A major problem is caused by random fluctuations, themselves the
product of many individual factors, for example:

1. Annual Budget & Staff Hiring

2. Large projects cause deviation in budget.
3. Fixed price project estimation.
Project Costing
• Because of these difficulties in monitoring the overall performance of a
company, Syniad also tries to monitor the financial performance of the
individual projects, through a project costing system.
• The costs and revenue of each project are calculated each month and the
cumulative gross margin (i-e, the difference between the total cost and
total revenue to date on the project) calculated as a percentage of the
total revenue.
• In practice this system does not work well.
Sales
• The budgeted increase in the revenue derives partly from increased
charge rates, partly from better staff utilization and partly from an
increased number of staff.
• All these factors are influenced by the forward sales position, that is by
the staff required and the rates earned on the work to which the company
is committed in the coming months.
• Two reports are used for assessing and monitoring the sales position.
1. The confirmed sales report shows, for each grade, the
number of staff in that grade who are committed to contracts in each of the
following twelve months and the total expected revenue from that grade in
each month.

2. The sales prospects report shows, for each sales

prospect, the potential value of the sale, its likelihood, and the likely start
date.
Long Term Planning
• Strategic planning for future
• The ability to plan strategically and to achieve strategic objectives is the
hallmark of well run, successful companies.
• Strategic planning in Syniad has two related aspects.
The first is to identify appropriate long-term goals.
Second is to identify and formulate plans to overcome those problems which are
inhibiting it from attaining these.
Long Term Planning Involves
• Expansion Plans
• Company Image
• Product Mix (Fee Based revenue Vs Package Software)
• Finance (under capitalization)