A report from the Software & Information Industry Association (SIIA) found that small and mid-sized software companies are expecting strong job creation as a result of strong revenue growth rates. Participating firms in the 2012 Software Benchmarking Industry Report achieved an average revenue growth rate of 37 percent in 2011, as compared to 28 percent in 2010.
The report, which surveyed private and public U.S. firms with up to $350 million in revenue, found that 80 percent of companies anticipate 20 percent or greater growth for 2012.
“Companies are hiring again and moving away from the cost-containment strategies they have favored since 2008,” Rhianna Collier, vice president of SIIA’s software division, said. “This segment of the American economy has not only weathered the recession – it has emerged as a key job creator and an engine for recovery.”
The study also compared the success of East Coast and West Coast companies, finding that West Coast firms have higher revenue growth rates but that East Coast companies have more extensive hiring plans for the coming year. Additionally, they only spend 66 percent as much on operating costs than their West Coast counterparts.
Managing growth to maximize productivity
According to the study, East Coast firms tend to demonstrate a more fiscally conservative approach toward building their business. As a result, West Coast companies are more likely to operate at a loss and, on average, took twice as much venture capital to reach the same revenue levels as their East Coast counterparts. East Coast firms also have 5 percent higher employee productivity.
For companies interested in managing costs, improving productivity is one way to do so. Firms can increase employee efficiency by offering tools that cut down on the amount of time lost doing nonessential tasks. According to software development blogger Scott Bellware, many project managers fail to account for what he calls “non-value-added work,” which translates to waste.
Non-value-added work can include time spent resolving problems, for instance, since a more efficient process would have avoided the problems in the first place. By using tools such as static analysis, companies can cut down on the time they spend dealing with bugs after development and focus instead on building better products.
As companies experience growth in revenue and hires, managing development processes will become more complicated than in the past. Using source code analysis tools is one way that businesses can maintain oversight of an expanding project while cutting out the type of non-value-added work that accumulates with expansion.
Software news brought to you by Klocwork Inc., dedicated to helping software developers create better code with every keystroke.