TY  - JOUR
AU  - Arora,Ashish
AU  - Asundi,Jai
TI  - Quality Certification and the Economics of Contract Software Development  A Study of the Indian Software Industry
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7260
PY  - 1999
Y2  - July 1999
UR  - http://www.nber.org/papers/w7260
L1  - http://www.nber.org/papers/w7260.pdf
N1  - Author contact info:
Ashish Arora
Fuqua School of Business
Duke University
Box 90120
Durham, NC 27708-0120
Tel: 919 660 7746
Fax: 919 684-2818
E-Mail: ashish.arora@duke.edu
AB  - A significant amount of software development is being outsourced to countries such as India.  Many Indian software firms have applied for and received quality certifications like the ISO9001, and the number of quality certified software firms has steadily increased.  Despite its growing popularity among Indian software developers, there is very little systematic evidence on the relationship of ISO certification to organizational performance. Using data on 95 Indian software firms and their US clients, we develop a stylized model of a firm that develops software for others to articulate the different ways in which ISO certification can affect firm profits.  We conclude that ISO certification enhances firm growth.  The results provide partial support for the proposition that ISO certification also enhances revenue for a given size, suggesting that firms are receiving a higher price per unit of output.  In turn, this is consistent with the notion that ISO certification also enhances the quality of output.  Our field studies confirm that although most firms see ISO certification as a marketing ploy, some of them do proceed to institute more systematic and better-defined processes for software development.
ER  -