Information Theory and Best Practices in the IT Industry

​​​The importance of benchmarking in the service sector is well recognized as it helps in continuous improvement in products and work processes. Through benchmarking, companies have strived to implement best practices in order to remain competitive in the

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Sanjay Mohapatra

Information Theory and Best Practices in the IT Industry

Sanjay Mohapatra Xavier Institute of Management Bhubaneswar, Orissa, India

ISBN 978-1-4614-3042-1 e-ISBN 978-1-4614-3043-8 DOI 10.1007/978-1-4614-3043-8 Springer New York Dordrecht Heidelberg London Library of Congress Control Number: 2012932634 © Springer Science+Business Media, LLC 2012 All rights reserved. This work may not be translated or copied in whole or in part without the written permission of the publisher (Springer Science+Business Media, LLC, 233 Spring Street, New York, NY 10013, USA), except for brief excerpts in connection with reviews or scholarly analysis. Use in connection with any form of information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed is forbidden. The use in this publication of trade names, trademarks, service marks, and similar terms, even if they are not identified as such, is not to be taken as an expression of opinion as to whether or not they are subject to proprietary rights. Printed on acid-free paper Springer is part of Springer Science+Business Media (www.springer.com)

Preface

Benchmarking is necessary to improve performance of an organization. Improvement of performance can give benefits to all stakeholders, such as to employees through better productivity bonus and increase in wages and salary, to the shareholders through increase in their share values and dividends, and to the community at large through greater allocation of funds for social activities. However, benchmarking can be different in different kinds of organization, such as manufacturing and services. In manufacturing, while it is fairly defined through productivity, which is the ratio of output to input, in service industry the problem arises as the output is not tangible and visible. Thus, service industry provides additional problems in matter of productivity and performance measurement. In software industry, which is a service industry, the problem becomes still more difficult because more often the service provided in the form of applications or software developed are not standardized and often need significant customization. Yet in such cases also benchmarking is required to identify gaps between the best performance (in terms of productivity) in the industry and the current level of performance at organization level. By bridging this gap, the organization can improve benefits for its stakeholders. While external benchmarking is related to practices within the industry, but outside the company such as by competitors or collaborators. Sometimes, it may also extend beyond the industry and best practices from other industry can also be used for comparable activities for benchmarking. On the other hand, internal benchmarking is related to comparison using best practices from comparable projects or comparable activities related to different projects within the company. In software development projects, performance can be studied through pr