SOFTWARE FACTORY OF COLOMBIA www.softmanagement.com.co
1. A Glance of the Information Technology Industry in Colombia The Colombian Information Technology industry is one of the most competitive in Latin America and worldwide. The national industry grows at 11% yearly, while the rate globally is just 7%. The grid shows the evolution of the IT industry in Million US Dollars: 2005 Hardware 811 Software 163 Services 726 Total 1,700
2006 906 191 839 1,936
2007 991 211 1,013 2,215
2008 1,100 234 1,124 2,459
It is expected that the industry rises at 11% yearly in the coming 4 years. Additionally, there are attractive issues regarding IT costs in terms of monthly wages, Internet (megabytes per second-1Mbps) and building rental by square meter. The table displays: Average Building Rental costs at competitive prices (US$/m2), Average Competitive Internet cost per month for 1Mbps (megabytes per second), and the most competitive Salaries in Latin America US$ 2007 (monthly wage. Santiago Buenos Aires Caracas Bogota Mexico City Lima
17 16.8 13.9 11.9 11.8 9.5
Peru Chile Venezuela Colombia Argentina Brazil
81 60 47 45 45 42
Chile Brazil Peru Mexico Argentina Colombia
5,574 3,873 2,944 2,658 1,753 1,452
The table shows Competitive Operational Costs in India, Colombia and United Sates. Colombia is 50% to 60% more competitive than United States, US$/FTE/hour. Labor Facilities IT/Telecom SG&A Total
8.8 2.6 1 1.4 13.8
18.8 5.3 1 2.8 27.9
43.3 1.4 4.5 5.8 55.0
Colombia has the lowest severance pay dismissal in Latin America. The table shows severance pay dismissal without just cause in 2006; days of severance pay for each year of service.
Peru Ecuador Argentina Chile Costa Rica Colombia
1 Year # Days 45 30 30 30 25 20
2 Year # Days 90 60 60 60 42 35
3 Year # Days 135 80 80 80 70 50
Colombian Software Factory
In terms of Broad Band Costs in US$/Year, Colombia has one of the lowest in the region and worldwide. Indonesia India Chile Brazil Colombia Mexico USA
233,520 73,000 50,400 45,000 35,000 30,000 9,600
Colombia has the most Highly Qualified and Available Workers in Latin America, according to the IMD World Competitiveness. Availability of Qualified Labor (10=Fully available qualified work): Colombia Chile Canada Peru Mexico Brazil Argentina
6.28 5.79 5.69 5.23 4.72 4.41 3.58
Colombia has 170 universities registered below Brazil and Mexico with 1582 and 343 respectively. The number of universities is superior to Argentina (104), Peru (87), and Chile (78). The country is third place in number of professionals in the software industry among the main countries in Latin America in 2006. The table shows the number of graduates in Software Engineering: Colombia Chile Canada Peru Mexico Brazil Argentina
6.28 5.79 5.69 5.23 4.72 4.41 3.58
The software industry of Colombia is shifting to a higher value level. The market of the software market is divided into: • Applications 39.85%. It was US$53 million in 2007. • Development 39.65%. US$74 million in 2007. • Infrastructure 20%. Revenues around US$84 million in 2007. This line had equivalent share to applications and development before 2007. Software Development is segmented in the following: • RDBMS and ORDBMS: 66.16%
Colombian Software Factory
• Modeling, analysis, and tool design: 6.28% • Implementation and development tools: 19.51% • Access to data: 6.17% • Life cycle quality tools: 1.87% The sector of the Information Technology Industry focused in developing software solutions is currently very strong, thanks to the efforts from government and industrialists. In the last 20 years, software builder houses of the country have improved the processes to compete globally. Today, Colombia has many software factories operating on industrialized processes and fulfilling the standards of the software industry worldwide. The Colombian software factories are expanding the market overseas, have high prestige internationally, and have high growth potential. All those companies are credited on CMMI and ISO certificates, the quality of the software solutions developed, and excellent reputation. The sector of the IT industry devoted to build software stays in permanent renovation, because there is much conscience on the impact and the importance of software in the other industries and the new world’s environment, characterized by dynamics and speed. The policy implemented in Colombia to strength the IT industry, is very effective because the companies in this segment compete with state-of-.the-art solutions, are pioneering, and are right agents for evolution and change.
II. SOFTMANAGEMENT Softmanagement is one of the outstanding software factories in Colombia. From its inception, 14 years ago, the company been has been focused constructing software, providing sophisticated software solutions to leading agencies of the government and private organizations in Colombia and countries of Latin-America. Banco Santander, HSBC, Johnson & Johnson, Kraft, GMAC, Xerox, Philip Morris, Banco AV Villas, Bancoldex, ISA, Corficolombiana, Colombina, Banco Caja Social, Sofasa, Naciones Unidas, and Mercedes Benz, are some organizations that constitute the important base-of-clients of the Company. In addition to the service of building software, the company has three business lines: consulting, software testing, and packed solutions. In the business line of software construction, Softmanagement is focused in: Analysis, Design, Development and Implantation of Information Systems; Maintenance, Migration and Support to Information Systems; Design, Development and Implementation of Information Systems on WEB operations; Design and Construction of Data-Mining; Processes of Software Construction by Outsourcing Service. Revenues from software manufacturing are 86% of the total annual income. The composition of income by industry is the following: Finance 55%, Government 32%, Manufacturing 8%, and Service 5%. Revenues and profits grow annually, standing out that the index of profits growth in the three last years (45% average) is superior to the index of the sales (8% average). Also, the Company displays indexes of market satisfaction fit to the goal annually established, process that enormously contributes to improve the competitiveness and the productivity in the Company. 12,93% of the total income comes from international markets, result that shows the success of the Company internationally speaking. 80% of the total income is repurchases of the current clients. As resulting from the process of evolution and improvement of the Company, this one accounts with the following certifications: Integration and Maturity of Better Practices Model CMMI Level 2, for Design, Development, Implementation, Support and Maintenance of Software; IT Mark Premium Level of European Software Institute (ESI), being the first Latin American company in obtaining this certification at the Premiun level; Management Quality System under ISO 9001:2008 for analysis, design, development, implementation, maintenance and support of software.
Colombian Software Factory
All these certifications ensure that all Softmanagement´s activities are closely aligned with the standards of the international software industry, giving enormous confidence to the market. In addition, such certifications reinforce the ability and the talent that the company has to extend the existing knowledge and create new knowledge, allowing, among other important achievements, the generation of best practices applied in the software industry and other industries. Softmanagement bases the status of software factory on three pillars: • Processes • Human Resources • Knowledge
2.1 Processes The factory operates on best practices in the full cycle of relationships with customers. The negotiations are based on quotations perfectly measured in number of professionals assigned to a specific project, productivity of each of them, time, and costs. This metric based on the learning curve of Softmanagement, facilitates negotiations and avoid affecting the contribution margin. Throughout the project development, productivity is measured permanently and best practices are applied to ensure the customers’ information, fulfilling the commitment agreed in the confidentiality agreement. To measure productivity, Softmanagement uses software tools, ensuring that measurements are made permanently as projects evolve, and additionally guaranteeing that such measurements are accurate and correct. The factory, according to the demands of the industry, can show the curve of productivity improvement based on the measurement of many projects developed in the past. Zero additional costs, timely deliveries, guarantee the quality and consistency of the software, and high level of satisfaction in customers, are some index showing the quality of Softmanagement. In the post-implementation phase, Softmanagement, from the Guarantees Office, complements the scope of the solutions if the customer requires it, taking into account this need should not exceed 10% of the original requirements. The Guarantee Office ensures immediate response to customers. The improvement of processes is notorious because the company has developed a methodology that uses the best practices of Rational Unified Process (RUP). Such practices are combined with the implementation of the process areas for CMMI level 2 and 3 and the security requirements of IT Mark Premium Level. This robust and mature methodology ensures high service levels in a software factory that meets industry standards and ensures the quality on two fronts: the project life-cycle and solutions life-cycle.
2.2 Human Resources The fabric consists of 100 professionals all of them highly experienced in software production. However, Softmanagement is eligible to extend the current production capacity 1.2 times through a roster of trained engineers and software factories specialized in both specific knowledge fields and newest information technologies. Team of professionals and allied factories have the respective certificates. 96% of the professionals in charge of building software are undergraduate computer engineering, and 4% of them are computer technicians. 30% of the professionals are graduate engineers in areas related to software engineering and telecommunications. 100% of the professionals are certified by Oracle, Sun, and Microsoft as experts developing on their platforms. The engineers responsible for testing activities have respective certifications from
Colombian Software Factory
ISDTQB (International Software Testing Qualification Board) and endorsed by HASTQB (Hispanic American Software Testing Qualification Board). Project Managers are undergraduate software engineering, business administration, and production engineering. All of these persons are MBA and graduate in business administration, finance, and project management. Project managers have the necessary certifications Project Management Professional and Best Practices in Project Management awarded by PMI. Technical skills of the professionals are complemented with their deep knowledge in finance, manufacturing, government, and services, among other ones, thanks to continued study and experience in building new knowledge models. This allows add much value to customers because Softmanagement’s software solutions have much knowledge and are based on the best practices of the target industries. Human resource is the most valuable asset of the company. Softmanagement develops many activities aimed at maintaining excellent organizational climate, which helps to protect employees and their family, boost personal development, and enhance productivity. The climate is continuously measured. The good organizational climate, typical in Softmanagement, allows staff members are highly committed with the company, high productivity, effective compliance with commitments to customers, and low staff turnover.
2.3 Knowledge The fabric continuing its improvement invests in R&D, getting much knowledge and creating new one. This encompasses newest practices in software engineering, best practices in both project-management and project-development, new certifications due to the implementation of new processes and practices, latest technologies, and different knowledge fields. R&D differentiates very well to Softmanagement, because it allows having enormous information pool, which is available to the market and other actors. Softmanagement’s solutions are based on wide knowledge by industry and software and hardware technologies. These issues generally named the Two Fronts for software development: Vertical Knowledge and Horizontal Knowledge. This frame allows building solutions full of knowledge for targeted industries, and highly efficient technologically speaking. Softmanagement’s solutions run perfectly synchronizing many technical resources, making them work concurrently and efficiently. Softmanagement, due to R&D and service to companies of a wide range of industries, creates new knowledge models, contributing to adopt new business practices and improve the current ones. This fact, in addition to the appropriate exploitation of giant technology base, makes possible that Softmanagement operates as perfect ally of its customers. They get much benefit from Softmanagement’s solutions: growth, productivity, costs savings, customers’ satisfaction, and active presence in the market.
2.4 Success Cases All software solutions developed in Softmanagement are success cases. The processes implemented in the factory ensure to write effective software solutions, regardless what complex they are, because all of them transform customers’ needs into software-code highly productive. This is possible because the professionals work on specific plans, using latest technologies, applying newest practices of software engineering, using proprietary knowledge and from other sources, ensuring solutions functionality, maximizing resources, rationalizing costs, and making deliveries timely. Generally, Softmanagement surpasses customers’ expectations. 100% of software solutions solve complex problems faced by large organizations, make possible that end users enjoy the service of well used technology, and have long life-cycle.
Colombian Software Factory
CENTRAL BANK OF HONDURAS: Softmanagement implemented sophisticated a software solution, solving a problem faced by the Bank for years, which prevented streamline and boost international trade in the country. The solution completely eliminated the manual process of auctions to purchase foreign exchanges, transforming it into an entirely automated process. The solution, implemented in June 2009, operates fully on-line, facilitates the management and operation of the daily auctions, calculates the exchange rates based on demand, and allocates quotas to participants in the auctions. A process that until May 2009 took three (3) days is currently developing in only 10 minutes. The solution helps to boost foreign trade of Honduras, to give transparency to auctions, to lead officials to face more challenging tasks, to raise the level of productivity of the Central Bank and save millions of dollars a year, among other achievements.
EMERMEDICA: It is an organization of the health industry in Colombia oriented toward supplying pre-hospital services to over 200 thousand customers nationwide. The Organization has a large network of doctors specialized in different disciplines, paramedics experienced, 120 ambulance-drivers properly trained to respond to medical emergencies, and 13 operation centers. Softmanagement developed and implemented an effective solution that works in a wide range of communication platforms enabling timely and immediate attention to service requests, many of which are cases of extreme urgency and seriousness. Once a service center receives the requests from users, the solution tracks doctors or ambulances closer to the places of origin of the calls, assigning them automatically the case or cases. Doctors and paramedics must confirm receipt of the message mapping service and inform the scheduled time to reach the place where patients are located. At the conclusion of the provision of a service, they should report on the procedure followed with patients. Emermedica, based on the solution, provides services 24x7 to over 1.000 users daily, saves many lives, raises the efficiency and productivity of health professionals linked to the Organization, maximizes the use of physical resources, increases the satisfaction in customers, and grows in number of users at 2% per month.
BANCO CAJA SOCIAL COLMENA â€“ BCSC-: It is one of the largest banks of Colombia. The Bank serves to 5 million customers, mostly mid-income individuals and small private businesses. 12 years ago, BCSC pioneered the microcredit in the country, achieving the extension in number of customers nationwide, boosting economic progress to persons and country, strengthening a wide range of industries with new extraordinary players, allocating more credit year-after-year, and increasing the number of transaction daily. The Bank required a solution able to operate fully on-line on an extensive computing network around the country, enabling different type of transactions, and efficiently responding to many concurrent inquiries. Softmanagement developed robust solution whose features facilitate completely the management and operation of the credit activity in BCSC, keeping the industry best practices globally. The solution is based on international principles according to agreements like The Basilea Commitment. Currently, the Bank has a contract with Softmanagement to permanently maintain the solution, because 50% of the BCSC`s operations relies in it.
Colombian Software Factory
BANCO DE LA REPUBLICA OF COLOMBIA Is one the most prestigious central banks worldwide because monetary policy and exchange rate policy have been well oriented, processes are high quality and very efficient, and management is transparent. The Bank, by constitutional mandate, is an independent agency from Central Government but aligned to the national economic plan, guaranteeing autonomous operation and definition of define policies according to the economic environment within the country and abroad. The Bank competes on the best practices implemented in similar organizations in developed countries. The Bank constantly defines and implements monetary policies seeking to keep low rates of inflation, long-term projected, oriented toward to generate confidence in the population, increase investment in the country, generate employment, and boost economic growth. Additionally, the Bank with the exchange rate policies seeks to keep appropriate reserves and moderate appreciation and depreciation of the Colombian peso that endanger the inflation targets. The Bank to achieve all these goals implemented a sophisticated information system, which is mature, robust, effective, and reliable. Softmanagement designed, developed, and implemented the information system, and the company always has been in charge of managing it, ensuring that the software solution operates efficiently and properly solve the problems faced by the Agency. The solution, in operation 12 years ago, is a strong information system tailored to operate fully on-line, and aimed to store, organize, and consolidate large volumes of data from a wide range of topics and multiple statistic series. The solution, using complex mathematical and statistical models, displays the history of economic indexes behavior: prices, employment, production, wages, interest rates, exchange rates, payment systems, public finance, stock market, financial accounts, and monetary aggregates, among other important ones. The Bank uses historical behaviors to set policies and forecast the economy, performs the economic projections, developing a very thorough exercise an increasingly more accurate thanks to the quantity and quality of the data-mining. The Bank also allows access to this information source, always ensuring reliability, consistency, and update data. Softmanagement is in charge of maintaining information systems of key functional areas of the Bank, contributing to enhance productivity and effectiveness in all of them. The Operations Division develops its processes on two critical information systems: Statistics Exchange Solution and International Operations Solutions. Softmanagement ensures that those solutions run in the highest engineering level and service and allows effectively producing investment and external-debt statistics, and managing international agreements with Latin American countries on imports and exports. The Economical Studies Division develops its business functions on an essential solution to the Bankâ€™s operation and other important playersâ€™ operation responsible for driving the countryâ€™s economy. Softmanagement is responsible for ensuring that the solution adequately consolidates a wide range of data nationwide and produces a vast gamma of historical series, supporting the credibility and confidence of any single player in the Colombian economy both locally and internationally. The prestige of the Bank relies primarily on security and trust that people feel on the Agency.
Colombian Software Factory