Analyzing the Business of Software: A Modelling Technique for Software Supply Networks

One of the most significant paradigm shifts of software business management is that individual organizations no longer compete as single entities but as complex dynamic supply networks of interrelated participants. Understanding these intricate software supply networks is a difficult task for decision makers. This paper outlines a modelling technique for representing and reasoning about software supply networks. Modelling software supply networks allows managers to visualize liability and responsibilities and identify new business opportunities in a software supply network. 1 Software Supply Networks Individual businesses no longer compete as single entities but as supply chains [5]. This holds for the software industry as well, where software products and services are no longer monolithical systems developed in-house, but consist of complex hardware and software system federations [3] produced and sold by different organizations. This development has lead organizations to combine their business and components into complex software supply networks (SSNs), from which they supply end-users with integrated products. As these SSNs grow more complex, it becomes harder for the participants of SSNs to make informed decisions on development strategy, responsibility, liability, and market placement. It also becomes harder to manage the risk associated with these decisions [4]. A software supply network is defined as a series of linked software, hardware, and service organizations cooperating to satisfy market demands. SSN management is different from physical goods supply chain management (SCM) in two ways. First, software is adaptible after release and delivery, giving rise to the need for extensive maintenance. Secondly, products delivered to end-users in SSNs are tolerated with much lower quality levels than physical products [1]. As SSNs grow more complex, organizations require more insight into SSNs [2]. Such insight is required by all the participants dealing with the supply network, 21