Why The Intangibility Of Software Poses Special Problems For Software Project Management?


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Richard Tarrance Profile
Software under development is considered and Intangible Asset and requires special accounting procedures. Since you can not see it, touch it, stand on it or eat it, you have to rely on your team to produce timely and accurate documentation needed to track progress and productivity. The intangible nature of software causes problems for management in planning, estimating, scheduling and budgeting for accounting purposes.Ensuring that the software is delivered on schedule and in accordance with the the projects requirements.  Project management is needed because software development is subject to problems in development, flexible budgets and schedule constraints.  The software project manager’s job is to ensure that the software project meets these constraints on time and within projected investment calculations.From an accounting view which I see as the biggest obstacle, intangible assets have special guidelines for capitalization. Computer software is the most common type of an internally generated intangible asset. It can be purchased or licensed from a 3rd party and then modified it is still considered internally generated and re-classified as an intangible asset. The cost of internally generated intangibles, such as computer software, must be capitalized or expensed depending on three project stages:1) Preliminary project stage -formulation and evaluation of alternatives, determining the existence of the needed technology. 2) Application development design includes coding, installation to hardware, testing, and parallel processing. 3) Post-implementation stage includes application training and software maintenance.Stages 1 and 3 are expensed, while stage 2 is capitalized. Generally, you have not reached stage 2 until you have executive management support for the project along with a commitment of funding and personnel. Determining what stage you are in can be difficult for large projects. Large projects might need to be broken down into multiple modules which are capitalized separately.  The people involved in designing a software project are its greatest assets. They represent intellectual capital and its up to the software project manager to get best out of their investment in people. This is achieved when people are respected by their company and given a level of responsibility and reward that matches their skills.  Software Project management is about regulating and managing phases of development done by others on a product that you can't see, smell, touch or eat and you can't even demonstrate it until it's almost finished.  A close working relationship and constant communication with the people you are relying on to get the job completed are your greatest tools.
Karl Sagan Profile
Karl Sagan answered

Hi, Man! You are quite right. I am working with the software are me meet such troubles that you mention in your post just in our everyday work. My company is working with a dedicated software development team that helps us to create really nice soft, but during the process of work, there are some aspects that we should solve and think about it. I am talking about that for people who want to start work in this sphere. You should understand future complexities.

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