Adding Value to Software Requirements： An Empirical Study in the Chinese Software Industry

Abstract The rapid growth of the Chinese software industry has attracted attention from all over the world. Meanwhile, software requirements selection has a crucial impact on the final value of a software product and the satisfaction of stakeholders. This paper presents an empirical study, which focuses on the decision-making criteria for requirements selection in market-driven software development projects in international companies in China. The outcome shows that some criteria, such as business strategy, customer satisfaction, and software features, are more important than others when making decisions for requirements selection. Keywords Requirements selection, Decision-making criteria, International companies in China 1. INTRODUCTION Information Technology (IT) has become a critical industry in China since the mid 1990s and has created a threat to other emerging markets in South East Asia, Central Asia and Eastern Europe. The Chinese software industry has grown so fast that it invokes frequent comparisons between Shanghai, one of China’s leading software producing regions, and Silicon Valley. The compound annual growth rate of the Chinese software market for the period 2000-2004 was 18.9% and is predicted to remain at the same rate in the following five years (Snapshots 2005). Due to the large market in China, foreign companies have launched their products into China one after another, and research indicates that foreign companies captured about 70 percent of the Chinese software market in 2003 (Hale and Hale 2003). In many cases, Chinese domestic companies themselves collaborate with foreign companies and export their software products outside China. Although in 2003 China’s software exports only achieved $2 billion compared to India’s $12 billion, it is estimated that China will be able to catch up with India in software exports by 2006, and will reach $27 billion in 2007 (Kshetri 2005, Meyer and Kolb 2005). There is incredible pressure on Chinese software companies to achieve and sustain a competitive advantage. Unfortunately, the value of the software is widely underestimated by Chinese people. Software companies in China have to depress the price of software products to attract more customers, so they have to drive down their cost of software development. Fang Liang, President Asia, Freeborders, states that "