Why the intangibility of a software systems poses special problems for software management?

Answer 1

Intangible system is that system whose services are not visible; it means you cannot touch it. If we have a software system that is intangible in nature then we have to face various problems i.e. buggy software products and customers, who are unsatisfied with the products they receive, customers' inability to know all the requirements in advance. The reason in behind these problems is that

· The first outcome mentioned clearly derives from a cognitive factor: testing software products is not an easy or trivial task;

· The second outcome derives from a social issue, namely the communication channels between customer and developers.

According to me, the main reason is that software is a unique intangible entity with which the human mind has not been shaped to cope during its evolution; therefore, our ability to deal with such intangible artifacts is limited. It can be rightly argued that many intangible entities have been dealt with during human evolution. Software is not only an intangible product; it is also executed on a computer. This means that the developed artifact is not the one that is actually used by its users. The same argument that highlights software uniqueness is very well applicable also with respect to other artifacts, such as knowledge and the emerging discipline of knowledge management. Software is an intangible entity increases the need for verbal communication between teammates and between customers and developers. When a team works on an intangible entity it is harder to build a relationship of trust. The reason for this is that under the common belief that knowledge is power, with both its positive and negative aspects, it is easier to hide knowledge when the subject being dealt with is an intangible entity (simply because it is easier to hide the fact that knowledge is not being shared).

Answer 2

After my last post I have researched and studied every phase of software development to give you this answer including cost accounting principles. Since you can not see it, touch it, stand on it or eat it, you have to rely on your team to produce timely and accurate documentation needed to track progress and productivity. The intangible nature of software causes problems for management in planning, estimating, scheduling and budgeting for accounting purposes.

Ensuring that the software is delivered on schedule and in accordance with the the projects requirements. Project management is needed because software development is subject to problems in development, flexible budgets and schedule constraints. The software project manager's job is to ensure that the software project meets these constraints on time and within projected investment calculations.

From an accounting view which I see as the biggest obstacle, intangible assets have special guidelines for capitalization. Computer software is the most common type of an internally generated intangible asset. It can be purchased or licensed from a 3rd party and then modified it is still considered internally generated and re-classified as an intangible asset. The cost of internally generated intangibles, such as computer software, must be capitalized or expensed depending on three project stages:

1) Preliminary project stage -formulation and evaluation of alternatives, determining the existence of the needed technology.

2) Application development design includes coding, installation to hardware, testing, and parallel processing.

3) Post-implementation stage includes application training and software maintenance.

Stages 1 and 3 are expensed, while stage 2 is capitalized. Generally, you have not reached stage 2 until you have executive management support for the project along with a commitment of funding and personnel. Determining what stage you are in can be difficult for large projects. Large projects might need to be broken down into multiple modules which are capitalized separately.

The people involved in designing a software project are its greatest assets. They represent intellectual capital and its up to the software project manager to get best out of their investment in people. This is achieved when people are respected by their company and given a level of responsibility and reward that matches their skills. Software Project management is about regulating and managing phases of development done by others on a product that you can't see, smell, touch or eat and you can't even demonstrate it until it's almost finished. A close working relationship and constant communication with the people you are relying on to get the job completed are your greatest tools.

P.A.C Kumara(University Of Colombo)

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