Drivers of Cots Application Value

IEEE Software, Vol. 22, No. 3, 2005

Posted: 29 Sep 2006

See all articles by Mark Keil

Mark Keil

Georgia State University

Amrit Tiwana

Iowa State University

Abstract

The growing popularity of commercial off-the-shelf (COTS) software has dramatically changed the way companies acquire enterprise applications, yet buying and deploying COTS software is not without risk. Given that the risks of failure are real, it is important for buyers to carefully consider the criteria used to evaluate COTS software prior to purchase. Likewise, COTS software vendors need to understand how COTS software buyers evaluate their software and what they perceive to be the drivers of COTS application value. Surprisingly, little is known about the attributes of enterprise COTS software that buyers value most, forcing most development firms to rely on educated guesses when developing such systems.

In this research, we analyzed how 126 management information systems (MIS) managers evaluate key attributes of COTS software, shedding light on the characteristics of enterprise COTS software that customers value most and that vendors must focus on. Specifically, functionality and reliability emerged as the most important factors affecting the perceived value of a COTS package. Interestingly, neither vendor reputation nor ease-of-implementation was found to be significant in terms of shaping managers' perceived value of COTS packages. These findings have important implications and we introduce an enterprise COTS software analyzer that should be useful to both buyers and suppliers of COTS software.

Keywords: COTS, decision models, enterprise software, application value, enterprise systems, packaged software, IT value

Suggested Citation

Keil, Mark and Tiwana, Amrit, Drivers of Cots Application Value. IEEE Software, Vol. 22, No. 3, 2005, Available at SSRN: https://ssrn.com/abstract=933144

Mark Keil

Georgia State University ( email )

35 Broad Street
Atlanta, GA 30302
United States

Amrit Tiwana (Contact Author)

Iowa State University ( email )

Ames, IA 50011-2063
United States

HOME PAGE: http://www.bus.iastate.edu/tiwana/

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