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Indian software vendors, led by firms such as Infosys Technologies Ltd, HCL Technologies Ltd and Wipro Ltd, are increasingly reusing for new customers software code or parts of it written for existing clients in an attempt to reduce development costs and time.
Such reuse, industry insiders and analysts estimate, helps reduce software development costs up to a quarter and time to write it by up to a half, and helps improve profit margins under pressure in an operating environment overshadowed by a rupee that has appreciated around 13% against the US dollar since the beginning of the year.
To help them reuse software code or modules, tech service providers are increasingly retaining the intellectual property (IP) on the software they develop for different clients and, in return for such rights, offer discounted pricingâ€”sometimes up to 20%. The mid-sized Headstrong Corp. is one company that offers a 20% discount.
At Bangalore-based Wipro, Indiaâ€™s third largest software firm, reused software today saves efforts by between 20% and 30%, and allows additional margins of 10-15%, but those benefits have come over time.
The effort that goes into designing and writing software code and modules that can be reused is up to 40% more than software written without reuse in mind.
â€œRetaining IP and making sure it is in good, reusable form is important,â€ said Sudip Nandy, Wiproâ€™s chief strategy officer. But, â€œit does not have an impact quickly as you have to give discounts to your customers. As the open source technology picks up in India, resued software will also be big in another two-three years,â€ Nandy added.
Experts say a well-executed reuse programme can provide several benefits such as reduced effort in project execution, consistent quality and reduction in defects across projects, improved time to market and enhanced predictability of future projects. But companies have to keep certain things in mind to ensure the success of this model.
â€œIt is important to maintain and keep the correct and up-to-date versions of the assets in the repository or data base with details of the necessary infrastructure and adherence to standards, on which you develop the software. An ecosystem supporting reused software in an organization is important,â€ said an Infosys spokesperson.
Infosys research indicates effort and cost savings are between 10% and 15% and in some cases even up to 25% of the total project life cycle for, say, a typical Java-language application development project, according to the spokesperson.
In October survey by research firm Forrester Research Inc. said the partial reuse of the code and domain expertise in architecting the solution, coupled with most of the development happening in low-cost locations such as India, make the concept highly economic.