The software industry has experienced some tremendous growth over the years. The advent of globalization provides numerous opportunities through which medium-size operations can expand their businesses. As of 2017, the DHL Global Connectedness Index highlighted an increased international trade rate, which also affects companies involved in soft-ware manufacturing. In the United Kingdom, companies dealing with digital technology development indicated a 4.5% growth from 2016 to 2017. Additionally, the government committed itself to increase the opportunities for businesses to thrive. More specifically, it relegated a sum of £75 million for its 2018 autumn budget to facilitate AI-related innovations. According to Henry-Nickie, Frimpong, and Sun (2019), the global digital economy has a value of $11.5 trillion, accounting for 15.5% of the world's GDP.
In comparison, the UK's digital industry has a worth of $212.5 billion and avails approximately 1.5 million employment opportunities for individuals residing in the region. Software development contributes to revenues attributable to digital innovations. The current paper aims to evaluate the impacts of globalization on a company dealing with software and the benefits anticipated.
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The medium-sized company can rely on the platform available globally to effectively deal with the inadequate technical skills necessary to develop its software. The talent gaps prevalent in the IT industry pave the way for continuous outsourcing. The company can obtain talented individuals from countries such as Ukraine, China, Canada, or even India (Cook, 2019). The statistical data currently available indicate a $481 billion growth relating to markets that provide IT outsourcing services by 2022. The data now available suggests that Eastern European regions and the Middle East account for a large percent of the revenues.
Furthermore, most American companies have resorted to outsourcing services about software development at a rate of 43%. Under such circumstances, the company must also opt to use the talented workforce available worldwide instead of combining itself with skilled individuals providing expertise in the United Kingdom. Depending on the geographic location, the company can capitalize on their specialized know-how associated with experts from different countries (Musa and Chinniah 2016). For instance, Israelis predominantly focus on developing products with a research and development orientation. On the other hand, Brazilian, Chinese, and Indian software developers specialize in IT service-oriented projects (Arora and Gambardella 2005). The Enterprise's ability to take advantage of any available research and development opportunities would ensure its competitive edge against its business rivals. For instance, firms originating from Thailand, Malaysia, and the Republic of Korea have increasingly targeted India for their R&D initiatives.
Operating on a global scale increases the organization's chances to ensure its products' availability to new clients in different international locations (Bijaoui 2017). The data provided by the United Nations Conference on Trade and Development for 2017 indicated that Hong Kong ranked highly concerning importing ICT goods. The information provided also noted the increased trading activities by other countries such as Singapore, Malaysia, and China to obtain IT-related commodities. The company can capitalize on such an opportunity to expand its market share in other nations, mainly where clients prefer software that caters to specific needs.
The business can extensively reduce the expenses that accrue to carrying out its designated software development projects effectively using the platform available in other foreign nations. For example, multinational companies, including Intel, IBM, and Microsoft, rely on Vietnam software development purposes (Pham, 2020). The country provides an avenue through which the conglomerates can significantly reduce the expenditure accruing to the acquisition of services necessary for putting together their signature products. Compared to countries such as the United States, Vietnam provides an avenue through which businesses can reduce a margin of 90% causes them. Software development companies often incur numerous expenses to acquire software engineers with the appropriate skills and experience. In the United Kingdom, software developers who obtain entry-level job opportunities expect salaries within a range of £20,000 to £41,000. On average, the professionals mandate a salary amounting to £28,000. Even so, the rates vary extensively depending on the location. For instance, software development firms operating in London remunerate practitioners at an average rate of £35,000.
In contrast, individuals providing their services in Manchester and Edinburg can anticipate lower earnings add values of £26,000 and £28,000, respectively (Technojobs.co.uk. no date). On the other hand, medium Enterprises can obtain skilled software engineers at affordable. Additionally, the country ensures the annual availability of approximately 25000 individuals with the appropriate qualifications to carry out jobs in software manufacturing effectively. In comparison, developers from Eastern Europe have earned a reputation for handling IT tasks despite their complexity. The Medium Enterprise's ability to take advantage of such provisions would enhance its capacity to improve the products' value availed to targeted customers.
The comparative advantage theory underscores the ability of a given economy to produce specific products or services without incurring exorbitant costs (Witt and Jackson 2016). In comparison to their trading partners, the nations involved mass indicator and extensively reduced opportunity cost. The medium-sized company must rely on the concept to reduce its expenditure. Under such circumstances, the organization increases its propensity to reduce its software prices without compromising on quality. Thus, the Enterprise can achieve high sales as opposed to its business rivals. Moreover, globalization provides an opportunity through which the small Enterprise can embark on creating its virtual Corporation that integrates the expertise of the virtual team. Despite the elaborate nature of such a setup, the company requires a short time to adequately capitalize on the available market-related avenues that could catapult its acquisition of a higher income.
Businesses operating on different scales can easily access the funds necessary to enhance efficiency and improve their outcomes (Hasim, Ishak, and Shamsudin 2018). The financial resources prove beneficial, particularly where the companies involved have numerous difficulties carrying out their projects. More specifically, the Enterprise may opt for different forms of models to enter the targeted markets. For instance, joint ventures provide an avenue through which it can obtain investors who enhance its operations' financial strength (Shen, Puig, and Paul 2017). Furthermore, joint ventures allow business owners to share risks and rely on their in-depth knowledge to enhance the outcomes anticipated from the Enterprise. The business can also become a recipient of some direct investment by other foreign nations. For instance, the statistical data available as of 2019 indicates that the United States had an overall increment in its FDI abroad. More specifically, the economic analysis bureau suggests that the country recorded higher values of $5.96 trillion instead of its 2018 investments valued at $5.80 trillion. More specifically, America sought to improve its position in the European markets, catapulting an additional capital injection of $95.7 billion. American investors primarily targeted the Netherlands in addition to the United Kingdom. Under such circumstances, the medium Enterprise involved in manufacturing software can capitalize on such an opportunity and ensure increased visibility to investors.
Despite the benefits anticipated from global software development, the company should anticipate some issues. The organization must develop strategies to overcome barriers presented by the communication channels preferred by developers worldwide (Tanchaitranon and Charoensukmongkol 2016). IS projects frequently experience failure owing to the inability of developers to interact efficiently. More specifically, the Enterprise should anticipate challenges in circumstances where the projects are undertaken require some efficient coordination. Additionally, work division and assignments may become subject to control-related problems. Under such circumstances, it becomes essential for the Corporation to consider using various technologies as a means of mitigating any prevalent communication-related issues. For example, it can result in using virtual private networks, emails, instant messaging, phone conferencing, and file transfer protocol in addition to video conferencing. As of 2019, estimates indicate that approximately 3.9 billion people used emails to aid their communication across borders. The projections for 2024 highlight a further increment in the numbers to 4.48 billion application users (Clement 2020).
On the other hand, teams rely on tools that facilitate video calling at a rate of 45% every day or week. Moreover, company workers have a 67% propensity to contribute to their Enterprise's discussions that use video conferencing channels. The medium Enterprise can rely on the different innovative communication platforms to effectively deal with the hurdles that manifest when conveying some relevant business-related information.
The strategy adopted by a business to operate on a global basis exposes it to increased competition. Albeit the fact that it operates on a medium scale, the company must make adequate preparations to challenge conglomerates, mainly when competing for similar clients who have a wide variety of software packages from which customers can make a selection. The company's competitors include ScienceSoft, Intellectsoft, and Oxagile, among others (Kurko, 2020). The companies have the appropriate financial muscle to improve the business procedures and strategies, operate on economies of scale, and have already established a global clientele base. For instance, ScienceSoft began operating in 1989, manufacturing various products that used artificial intelligence. Even so, it began providing IT services in 2002 and relies on the expertise of more than 700 employees. Furthermore, the company has managed to penetrate 37 countries. Thus, the medium Enterprise must focus on highlighting the differences of its products from such established businesses to attract customers.
Furthermore, the company must understand the laws applicable in different regions concerning software development (Al-Roubaie and Almubarak 2017). Country-specific legal systems vary extensively depending on whether they utilize provisions availed in common law or civil codes. For instance, the organization should anticipate confining its operations to the prerequisites of common law when operating in American states. In contrast, it must adhere to the civil courts applicable in countries such as France and Germany. Some countries implement different versions of the Berne Convention that stipulate the critical protections necessary with respect to the software provided by its signatories (Gunadi and Permana 2020) . Currently, 120 nations seek to align their legal prerequisites with the Convention's requirements.
Conclusion
A medium enterprises' ability to effectively use the global platform for its software products enhances its access to a broader market. Additionally, the business can recruit professional developers at affordable rates, thus reducing their business expenditure. Operating on a global scale makes it possible for the company to obtain additional investments from investors, ensuring that the business adequately deals with any overall finance-related issues. However, the organization must anticipate increased competition from other established conglomerates. Furthermore, the Enterprise should also expect streamlining its operations to align with the legal prerequisites applicable in different territories. The company's business activities' geographical coverage portends some communication challenges that require the implementation of appropriate mitigation strategies.
References
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