BPM Forum (Business Performance Management), Advancing Performance Accountability
Advisory Board  
September 2005
SECOsystem Newsletter

In this Issue:


SECOsystem: The Official Newsletter of the Software Economics Council (SECO)

The Software Economics Council (SECO) is a major industry initiative launched by the Business Performance Management (BPM) Forum, an important organization created to advance the understanding of business performance management techniques, technologies, processes and ROI in global enterprises. The Forum brings together more than 2,000 influential business line managers and senior executives overseeing enterprise strategy, finance, operations, technology, and business model innovation roles.

This is the inaugural issue of SECOsystem — a periodic newsletter for information systems executives, professionals and innovators.
It Takes an Ecosystem

by Shirish Netke

This summer’s remake of HG Wells’ War of the Worlds ends with an interesting explanation of why invaders from outer space with superior technology couldn’t conquer the earth — their immune systems could not survive the onslaught from microorganisms on this planet. Human beings, which evolved from and co-existed with other organisms for millions of years, had the stabilized ecosystem on their side.

We software folks are not from outer space (for the most part), but our business has always faced a similar problem: Superior technology, even when it makes for great point solutions, ends up as roadkill when it’s not supported by a business ecosystem.

From the beginning, the software industry has been so dynamic that we tend to take its radical advances for granted. But think about it: How many industries are there in which the products get both better and cheaper with each passing year, sometimes with each passing month? The phrase “new paradigm” is such a cliché it makes us groan, but is there another field that can handle drastic upheavals so routinely? It’s a strange sort of tribute that many people see software as a commoditized field even as they constantly expect innovation.

Still, do we really need yet another software body where industry representatives come together and talk about the rules of engagement? Another organization to discuss the future of the industry? Another forum to discuss how we can improve what we offer our customers?


As good as we can be, there are some issues the software industry needs to confront, and soon. We’ve been accused of selling futures. Critics say, sometimes with accuracy, that we’ve delivered incomplete products and charged extra for fixes. The industry has created considerable wealth. No, a mea culpa is not required — pioneers are entitled to rich rewards, and the world is definitely better off with software than without it. There can be no doubt that software innovation has collectively had a positive influence on every aspect of business and daily life in the last quarter century.

But that was then, this is now.

Today, in the 21 st century, the industry is moving from adolescence to maturity, and that requires greater accountability. It also means working within a mature business ecosystem of industry peers who demand value and are less forgiving than they would be with teenage brethren. It also means being financially viable on our own, with no safety nets or subsidies. In this time and place, it’s absolutely critical for new questions to be asked and new answers to be forwarded.

And that’s why we launched the Software Economics Council (SECO): To examine the issues that don’t belong in the past but are unique to our time, and to do it with a perspective that fits into the broader economic framework — in other words, not technical standards but business standards. How will we work together to ensure that the customer gets the best bang for the buck? How will we foster innovation without being marred by legacy technology? How will we create a new ecosystem where customers perceive — and get — true value?

During the first leadership meeting of SECO, I urged all members not to leave their company hats at the door but to strongly represent their companies’ interest in the new software ecosystem. Whatever initiatives we take need to demonstrate a clear and present ROI to shareholders.

Within that context, what are the challenges and opportunities in a new software ecosystem?

  • Ambiguity runs rampant: While at least three-quarters of all enterprises acknowledge their mission-critical dependence on software performance, the National Institute of Standards and Technology reports that software errors cost the U.S. economy nearly $60 billion annually. What can—and should—we do to fix this?
  • So much software that there’s too much software: According to an earlier BPM Forum survey, many companies’ networks are clogged with obsolete, redundant and unused software applications—so many, in fact, that maintaining them drains billions of dollars from the IT budget. How can those dollars be more effectively allocated in a more stable software ecosystem?
  • Global sourcing done right: The outsourcing of software services is an integral part of the new ecosystem. It’s clearly more economical for software development to be farmed out to overseas markets, but those advantages are severely undercut with inadequate requirements and design specifications. How are we making sure the other two dimensions of timeliness and quality are not compromised? How can this be used to accelerate growth and benefit both developers and customers?
  • Open source, closed loop: Open source technology, simultaneously praised as a panacea and vilified as a rogue menace, is increasingly finding peaceful coexistence with proprietary applications. While still in its infancy, this platform lends itself to powerful new economic models that combine products and services to create value for the customers. How can we welcome this as a bountiful opportunity in the new software ecosystem?

These are all macro issues, of course, and most of us have to live in smaller worlds. But that’s also the thinking behind the Software Economics Council, which will bring together the major constituencies in today’s enterprise software ecosystem. Our goal is to have members address such critical issues as development gaps between software design and delivery; how to best manage quality throughout software lifecycles; and new strategies to build on the potential of open-source technology and on-demand models.

Go to our website for more detailed information about SECO’s Leadership Committee — it represents a cross-section of the most influential names in the industry. They include executives from Adobe Systems, Azul Systems, BEA Systems, Borland Software, BroadVision, Cognizant, Deloitte, Dendrite International, EDS, IBM, Informatica, Leverage Software, Mercury, Novell, Salesforce.com, Santéon, SAP, Siebel Systems and Sybase. SECO was formed with founding sponsorship from Aztec Software.

While you’re ruminating on next steps, keep thinking of how we can all benefit from the experience. While we may wish for another Tulip Run, hope is not a good strategy per se. It’s time to join forces — with rivals and customers alike — and create an ecosystem while remaining laser-focused on the bottom line. Like the software itself, the industry’s future is brighter than ever — for those who do it right.

Shirish Netke is the chairman of the Software Economics Council (SECO) Leadership Committee and chief strategy officer of Aztec Software. Mr. Netke is based in Santa Clara, California and can be reached at 408-748-3500 . SECO is a thought leadership initiative fielded by the BPM Forum.

Upcoming SECO Leadership Committee Call, October 4, 2022
  Agenda, 10:30 AM to 11:30 AM PST:

Erick Mott, program director for the BPM Forum, and Shirish Netke, chairman of the SECO Leadership Committee, will welcome callers and set the tone for an informative, one-hour conversation.

Then, Credit Suisse First Boston analyst Jason Maynard will discuss and provide a perspective on the changing face of the enterprise software market as the forces of consolidation and innovation collide. The discussion will also include emerging technologies such as Software as a Service, service-oriented architecture, and grid computing. In addition, Mr. Maynard will discuss the Credit Suisse Software On Demand Index and its role in measuring the transformation of the industry

Immediately following Mr. Maynard’s presentation and a brief Q&A session, the group will make SECO program decisions for 2006 based on the current charter and brainstorming to date. Con-call details and information will be emailed separately to committee members in advance of the call.

Note: The SECO Leadership Committee is an invitation-only organization. If you would like to get involved in SECO initiatives, please feel free to email us at SECO@BPMForum.org.