The author and his colleagues developed a structural model including innovational paths, such as service innovation, product innovation and process innovation, and a measurement model including the seven software engineering capabilities: deliverables, project management, quality assurance, process improvement, research and development, human resource development, and customer contact. Then they designed research on software engineering excellence and administered it with the Japanese Ministry of Economy, Trade and Industry and Information-Technology Promotion Agency. Through statistical analyses of the results, they found that human resource development and R&D are significant fundamental conditions to improve the quality of the deliverables and that IT firms with high levels of deliverables, derived from high levels of human resource development, quality assurance, project management and process improvement, tend to sustain high profitability. In addition, they developed a measurement model based on Porter's five forces and Barney's resource-based view. A regression tree analysis suggested that manufacturer spin-off vendors tend to expand business with well-resourced R&D, whereas user spin-off vendors tend to depend heavily on parent company demand.
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