A Study On The Relationships Between Software Engineering Capabilities And Business Performance Of Japanese It Firms Through Longitudinal Modeling

This study aims at better understanding the long-term relationships among the software engineering capabilities and business performance of the representative IT firms in Japan. We conducted longitudinal analyses on standardized software engineering capability scores of three surveys and tenyear business performance from 151 firms. Through panel analyses of the best Akaike Information Criteria model, we found that IT firms maintaining high levels of deliverables, derived from high levels of human development, quality assurance, project management and process improvement, tend to sustain high profitability, while IT firms with high levels of project management and customer contact tend to be highly productive and increasingly improve the productivity in the long-term. Concerning business performance, profitable IT firms tend to be stable and this tendency accelerates progressively due to the enhancement of deliverables and R&D. However, productive IT firms are not necessarily profitable likely because of the multi-layered industry structure in Japan.