Jack N Jill - Where does Shareholder
Money go in a Software Company ?
This article is the third in a planned series covering the Shareholders Versus Employees Conflict.
The first article was titled Humpty-Dumpty.
The second article was titled EPS or SPE ?.
We all know the KinderGarten Poem 'Jack N Jill'. The same is repeated for those of us who have perhaps forgotten our early childhood lessons.
Jack N Jill
Jack and Jill Went Up the Hill,
To Fetch A Pail of Water.
Jack Fell Down.
And Broke His Crown.
And Jill Came Tumbling After.
For Shareholders of Software Companies wanting to know as to where their money goes, perhaps the following twist to the above poem applies.
Jack N Jill ?
Shareholder Jack and Employee Jill,
Tried Creating A Software Hill.
The Competition Got Hotter,
Causing A Market Slaughter.
The Software Hill Broke Down.
Along with Jack's Capital Crown.
Jill's Career Soared Thereafter.
These series of articles are a personal viewpoint and may not reflect the views of the entire organization.
Where does Shareholder Money go in a Software Company ?
In one of my earlier Outsourcing articles elsewhere, I had mentioned that for the last 10 years, a software company died every working day in the US.
What must have been the fate of the shareholders of these unfortunate 2500 software companies now in the grave ?
Where did their Money disappear ?
What must have been the fate of the employees of these software companies ?
My bet is that most of them would have easily found alternative employment elsewhere. Why ?
Because Software Employees are Key Knowledge Kings.
What gets created when Software is Produced ?
Written Lines of Software Program Code.
Who can understand this Program Code ?
Other Software Programs - either Software Compliers or Software Interpreters or Both.
Who else understands this Program Code ?
Naturally, the Software Developers, due to the knowledge enhancement in their minds by virtue of being associated with the software process.
Who else ?
If the Software has been documented properly, then perhaps it can be of use to other Software Developers too.
Who benefits from this Program Code ?
If the software Program Code is proved to be working properly, then it benefits the Customer Organization and it's People who use the Software in their day to day workings.
The Software Company when it gets paid by it's Customers obviously gains.
However, If more than 2500 US software companies died during the last decade, creating a software that creates true value for paying customers is obviously not very easy.
So, where does Value surely get created in a software company irrespective of whether customers pay or not ? Only in the minds of the people associated with the software Process.
By Addition to their Knowledge Capital.
So,from Jack - The Shareholder's perspective, the Software Company owned by him really has two types of People who get Value.
First, Customers who pay for it's Goods and Services.
And. The Software Employees who benefit from their experience of working in the organization.
To leverage it elsewhere.
Irrespective of whether the Software Company makes money or not.
Like Jill above.
Nothing Wrong About It.
But Pause to Think.
In today's Global OffSourcing Era, this has deep implications for shareholders of software companies.
As regards their understanding of the true value creation of their investments in software companies.
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