Abstract

In this paper, we present the findings of a study into the relationship between software process improvement (SPI) and business success in software development small- to medium- sized companies (software SMEs). A number of earlier related studies investigated the benefits of SPI in software SMEs, particularly in terms of improvements in product quality and adherence to budgetary and schedule constraints. However, only limited or indirect research has examined the relationship between SPI and business success. In this study, we adopt the Holistic Scorecard (HSC) (Sureshchandar and Leisten, 2005) as a business success reference framework, thus examining both the financial and the non-financial aspects of business success. In addition, we utilise ISO/IEC 12207 (ISO/IEC, 2008) as a comprehensive reference framework for the investigation of SPI activity in software SMEs. Through the use of new metrics introduced in this paper, the study findings establish that there is a positive association between SPI and business success in software SMEs, highlighting the importance of SPI in successful software SMEs. This is the first time that this relationship has been demonstrated using empirical data, and therefore, the findings represent a valuable new addition to the body of knowledge.