Whitepaper | Software Engineering - Innover Digital

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2. Overview The software industry has undergone a significant transformation over the past few decades. There is a never-seen-before demand to develop software products at a breakneck pace but also at a reduced cost without compromising on quality. Consumers and business users are not only demanding high-quality software products at a faster pace but are also looking for products that enable easier integration across multiple systems. This growing trend of rapid-paced software development is in stark contrast to the earlier times when software developers had time to think about designing and delivering the best applications/platforms to their customers. The Covid-19-necessitated growth of remote work and increasing deployment of digital solutions has only accelerated the demand for delivering top-notch As-a-Service products. The scalability, affordability, cost-effectiveness minus operational and maintenance responsibilities of various cloud service models such as Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS) are strong reasons for organizations to shift to the cloud. How- ever, walking down the cloud road has inherent challenges such as data security issues owing to multitenant architecture, loss of control, excessive vendor dependency for speed, reliability, & sup- port, limited range of solutions, etc. The increasing prominence of the ‘Build-Once-Deploy-Everywhere’ model, wherein a single appli- cation can run across various platforms along with the growing need for integrating different pro- grams and maintaining support across the product life cycle has put placed great demands on software developers as they have to operate with demanding timelines and budget constraints. The creation of new markets, the proliferation of new devices, and software-driven productivity gains have thrown up growth opportunities as well as challenges for software development organi- zations. According to a McKinsey report, the market cap of the global software industry grew at twice the rate of the overall market over the last decade. The growth story of the software industry is there for all to see but there is no overlooking the fact that the profitability of software organiza- tions has also come under pressure owing to falling development costs, free or low-cost options, and transparent pricing. This White Paper takes a deep dive into the factors driving the growth of the software industry growth, challenges, trends that will shape the future of the software industry, client success stories, etc. 2

3. Key Factors Driving Software Industry Growth Robust Growth in Packaged and Cloud-Based (SAAS) Solutions One area that is witnessing speedy growth within the realm of the software industry is Packaged Applications that serves as a favorable option for buyers and sellers since development costs are shared among many customers. According to a Forrester report, Packaged Applications including Software-as-a-service (SaaS) have expanded from 19% to 49% of the overall business software spending, while custom-developed software lost share. Packaged Applications has superior testing capabilities that help organizations reduce the time and resources spent in providing support to the end-users. Such applications also require fewer business disruptions – for example, irrespective of which packaging format you are using (MSI, AppV, or MSIX) - installation, uninstallation, and upgrading of Packaged Applications can be silently carried out in the background, without interrupting or prompting action from the end-user. Factors Driving Cloud Adoption Scalability Affordability Performance Reduced Costs Customer-Facing Applications Shifting to the Cloud Organizations are increasingly shifting their customer-facing applications to the cloud. Cloud migration enables organizations to implement new features and upgrades more quickly than it would take to test and execute on-premises. The app-integration exercise in the cloud is also less time-consuming, which also enables IT and CX teams to focus on applying the technology as per the organization’s specific business requirements. This is where APIs can come into play to devel- op customizations that align with business needs. Taking the cloud route can aid organizations to promptly scale during busy periods to serve customers more quickly as well as to reassign IT resources to more strategic functions to improve customer engagement that may translate into tangible revenue increase. Other Software Segments Even as the software industry is witnessing a proliferation of packaged applications and cloud migration of customer-facing applications, the other software segments such as operating systems,middleware, custom & mobile apps built by contractors, and consultants and in-house-developed software are also witnessing growth. The growth of these software segments indicates the growing acceptance of free or low-cost open-source software in operating systems and middleware categories (for example, Linux in operating systems and Apache in web servers). 3

4. A large chunk of software development companies is often bogged down by an acute shortage of talent that poses roadblocks in effectively executing projects. Rapid Technology Advancements Ever-Increasing Customer Demands Software Security Acute Talent Shortage & Infrastructure Constraints Conflicts between Development & Testing Teams Challenges Faced by the Software Industry Rapid Technology Advancements Any technology advancements augur well for the software industry but the pace at which the technology is hitting the market is far from comforting for industry stakeholders. The rap- id-paced technology roll-outs create a lot of pressure on software development organizations to integrate them into their product development cycle. Evolving technology trends are a reality that organizations must come to terms with and accordingly find ways and means to future-proof their businesses. Ever-Increasing Customer Demands Constantly-evolving technologies, rapid pace of innovation, and growing customer demands have reinforced the need for software companies to accelerate speed-to-market and in a cost-effective manner. The software development process is a long-drawn-out affair, wherein 4

5. developers are always racing against time to wrap up project requirements. This can be chal- lenging for organizations when they work with international clients across multiple time zones. A lot of times time constraints can lead to reduced efficiency among development teams, thus resulting in mediocre quality of software products and poor customer experience. Software Security Software development organizations are cognizant of the fact that their job does not end with just building the software – the onus is on them to ensure the software is equipped with a higher degree of security and trust. Since the software is intertwined with all aspects of our lives, customers must be able to trust the software. This is critical, especially for remote soft- ware systems accessed through a web page or web service interface. At all times, software development organizations need to make sure malicious users do not attack the software and maintain information security at all times. Acute Talent Shortage & Infrastructure Constraints A large chunk of software development companies is often bogged down by an acute shortage of talent that poses roadblocks in effectively executing projects. The lack of the right talent can bring down the productivity and performance of software development teams. Further, the lack of the desired infrastructure can adversely impact organizations. The absence of high-perfor- mance software development tools, lack of powerful computing platforms, inefficient data stor- age architectures or improper networks, and connectivity can impact the overall results Conflicts between Development & Testing Teams Software development organizations often have to deal with interpersonal conflicts between development and testing teams. Of course, every organization strives to best avoid such scenari- os but it is easier said than done. Such conflicts stem from working under high-performance pressure, different mindsets, the difference in job roles, etc. Organizations must have a deep understanding of the problems that lie ahead of them and accordingly put a roadmap in place to overcome them. Such conflicts, if not addressed effectively, can adversely affect the overall project. 5

6. There are a lot of trends across the software industry, but we zeroed in on a few trends we believe would impact the revenue of software development organizations. User Design Experience is no more a layer that is added at the end of the software development cycle and needs to be included right from the beginning of the software design process. Smooth Learning Curve Accelerate Sales Exceptional Onboarding Experience Reduces Software Development Costs Understanding Future Customer Demands Intuitive Experience Accelerates Performance Enhanced Brand Credibility (1) User Design Experience Software development organizations have often focused their time and investments on the technical side of their products and overlooked the significance of User Design Experience until after the product is developed. There is a strong need for software development organizations to make User Design Experience an integral part of their software lifecycle. In these times of disruptive applications and cutting-edge platforms, people interact with dozens of applications every day, but they will only leverage the applications that deliver the most value. One key human aspect in this digital age is that if something is too difficult to use, doesn’t deliver the expected experience, and doesn’t evolve ahead of our needs, we won’t use it.Organizations must factor in User Design Experience to create truly disruptive technologies. User Design Experience is no more a layer that is added at the end of the software development cycle and needs to be included right from the beginning of the software design process. According to Forrester’s ROI of Design Thinking study, design thinking can deliver an ROI of 85% or greater. 6

7. Benefits of Positive User Design Experience Reduces Software Development Costs There is a certain degree of risk associated with starting any new business/product. However, since research, analysis, and testing largely drive user experience design and design thinking, user design focused-organizations are well-placed to achieve success. There is a greater aware- ness about the fact that fixing usability issues/problems at the start is less expensive than resolv- ing them later with product redesigns or bug amends. Exceptional Onboarding Experience Organizations are focusing on delivering an exceptional customer onboarding experience. A good onboarding experience can help brands deliver a great first impression and set a positive tone for their relationship with clients. Organizations need to ensure their onboarding strategy isn’t overwhelming, confusing, and seamlessly integrates into their clients’ needs. Intuitive Experience Accelerates Performance Organizations are increasingly adopting a customer-centric approach, wherein the focus is on building software that can be adjusted to the clients’ needs, refrain from imposing a completely new solution, and tap into the user’s existing knowhow. Such an approach can not only help minimize errors and ensure users are more productive but also enhance the acceptance of the software. Smooth Learning Curve There is a need to focus on driving a smoother user learning curve by developing user-friendly software programs that adhere to existing protocols and requirements. A smooth learning curve can save training costs & time and can enable a hassle-free implementation of the new software. This facet is crucial because most users and organizations are reluctant to apply soft- ware changes owing to downtime triggered by learning a new application. Enhanced Brand Credibility A good user experience can enhance brand recognition and serve as a catalyst for customer loyalty, while a User Design Experience failure could mean losing customers altogether. The credibility of a brand means a lot to customers and organizations must look to forge long-stand- ing relationships with their target customers. Accelerate Sales Software development organizations must go beyond driving revenue and also ensure the product is effective and readily adopted by users. A positive product user experience can go a long way toward driving adoption and ultimately generating revenue. According to a study conducted by Baymard Institute, 69.2 percent of customers abandon a shopping cart after adding items citing design and checkout flow as the main reasons why they leave without purchasing. 7

8. Understanding Future Customer Demands Customer demands will continue to evolve. Delivering a positive user experience can help brands build a strong customer connection, which is critical as brands will be better positioned to understand their future demands and effectively respond to them. (2) Low-Code/No-Code A large chunk of software development companies is often bogged down by an acute shortage of talent that poses roadblocks in effectively executing projects. Cost- Reduction Faster Software Development No Need for Training In-House Talent 01 03 05 02 04 Lower Maintenance Burden Cross-Platform Compatibility Low-Code/No-Code development holds great potential to streamline the software develop- ment process. It is not a cure for everything facing the As-a-Service software industry and it does also present potential challenges. However, they can be powerful tools when wielded effectively. According to a Forrester report, the Low-Code market is poised to touch an annual growth rate of 40%, with spending forecasted to hit a whopping $21.2 billion by 2022. Differences between Low-Code versus No-Code Low-Code refers to a form of developing software, applications, or databases through a graphi- cal user interface (GUI) and can be fully customized with a minuscule amount of programming. Low-Code requires the use of a visual integrated development environment (IDE) as the user simply has to leverage visual components to assemble their custom application. It offers the option to view or edit the source code and is cost-effective. No-Code development can be carried out by anyone, who desires to tailor an application to his/her needs without any programming knowledge. Unlike Low-Code, No-Code does not offer the option of viewing or editing the source code. It brings into play ‘citizen developers’, who build functional but generally limited apps without having to write a line of code. Users by lever- aging a GUI can utilize No-Code development platforms by dragging and dropping features straight into their application framework. 8

9. Challenges in Implementing Low-Code/No-Code However, implementing Low-Code/No-Code development has its share of challenges. Low-Code lacks customization and has integration issues, especially with legacy systems. Secu- rity and reliability are other concerns using Low-Code as there are risks involved as you don’t have complete control or knowledge of the entire coding process. No-Code also has its chal- lenges. It is not always a cheaper option - at times, it can be even more expensive than out- sourcing or nearshoring code development and also has scalability limitations. Irrespective of the challenges of using Low-Code/No-Code, the potential upside makes them necessary for companies to evaluate their fit for their development efforts. Benefits of Low-Code/No-Code Movement Faster Software Development Organizations leveraging Low-Code/No-Code platforms can enable software development within a few days or weeks, unlike traditional application development that can take weeks or even months. This allows for rapid speed-to-market as well as ensures software updates are carried out regularly as anyone can make changes irrespective of their level of coding knowl- edge. The absence of code writing also frees up software developers to focus on other more crit- ical development tasks or even to focus on improvements to products or new products alto- gether – driving potential revenue. Cross-Platform Compatibility Custom applications largely developed through traditional methods are built for one platform or another, e.g. Android or iOS. Such platforms have limitations owing to the costs involved in developing two different platforms. Certain Low-Code/No-Code development is cross-platform and can be deployed across multiple devices, but these are limited. Cost-Reduction Low-Code/No-Code serves as an enabler for building more applications/platforms in less time, which helps organizations reduce development costs. They also eliminate the need for hiring more software developers, thus helping keep a tight rein on staffing costs and improving pro- ductivity. Lower Maintenance Burden Software maintenance is a big responsibility for organizations. Low-Code reduces the software maintenance burden by reducing the plumbing work from day-to-day development. Since Low-Code ensures components are standardized, pretested and ready-made, organizations have to deal with fewer bugs and integration issues than in the past. It also ensures software developers spend less time on maintenance. 9

10. No Need for Training In-House Talent Organizations can leverage Low-Code/No-Code to reduce time and effort in training their work- force. Such platforms do not need organizations to have developers trained in different pro- gramming languages. Often basic HTML knowledge is more than enough, which paves the way for organizations to deploy in-house IT professionals to execute their software development solutions. (3) DevOps 1 2 3 4 5 Shorter Software Release Cycles Elevated Customer Experience Silos – A Thing of the Past Accelerated Collaboration Faster Deployment Accelerating operational efficiencies is a prime focus area for software development organiza- tions. And this is where DevOps can play a pivotal role in helping organizations deliver software products with greater speed and efficiency by combining the principles of development and operations. DevOps unifies three key aspects – people, process, and technology to deliver cus- tomer value. It enables formerly siloed roles—development, IT operations, quality engineering, and security to coordinate and collaborate to produce better, reliable products. The increasing digitization of organizations to automate business processes, rising adoption of cloud technologies, rapid adoption of agile frameworks, and the pressing need for enhanced collaboration across IT teams will drive the popularity of DevOps in the coming times. According to a study conducted by Grand View Research Inc., the global DevOps market size is expected to reach $12.85 billion by 2025, posting an 18.60% CAGR during the forecast period. Key Steps to Implementing DevOps Prepare for a Cultural Shift Organizations must realize that cultural shift is the backbone of DevOps as it integrates people, processes, and tools. The DevOps movement must start with top management and run through even entry-level staff – development and operation teams must be made aware of the value each brings to the organization. This cultural shift can be expedited by identifying people who can motivate team members and ensure a smooth transition to DevOps. Create a Vision Organizations adopting a DevOps strategy got to ensure their DevOps vision is aligned with their business vision and people are empowered to act on the vision. Some aspects of the vision such as reduced process complexities etc must be ingrained into the organizational culture 10 10

11. Build a Continuous Integration & Delivery Platform In a DevOps setup, it is imperative for organizations to provide accurate, up-to-date information about the production environment to development teams for appropriate deployment plan- ning. This enables developers to adopt a coordinated “build and run” approach, wherein the developer who builds a product or service “owns” that product or service till the production stage. This “ownership” can be extended for a set period to address any major bugs before the handoff. Further, the DevOps team will touch all points of the service lifecycle, right from requirements to planning, deployment, and maintenance. This team will also troubleshoot problems that traditionally fall on ops. Create a Continuous Testing Environment Unlike the traditional software development process which is time-consuming and less reliable, testing is an integral part of development in DevOps, wherein Quality Assurance people are part of the DevOps team. Testing (be it manual or automated) is performed continually throughout the delivery pipeline. In fact, every change is treated as a potential release candidate, and the objective is to ensure the time between check-in and release is as short as possible. Build a Continuous Deployment System Forming a continuous deployment system can help organizations quickly deliver new features and updates while proactively making product changes. A well-designed delivery pipeline ensures organizations don’t have to sweat over losing control over the code in production. Continuous deployment should be backed by continuous monitoring and feedback. With prompt feedback, developers are aware of what features are useful to end-users, which helps them focus on the features that matter most, thus saving time and effort. Challenges in Implementing DevOps Although DevOps promises a lot for the software industry, implementing it has its share of challenges. The biggest challenge lies in getting the development and operations teams on the same page – both teams have their own goals and priorities to focus on and adopting DevOps means that both teams have to focus on a common goal, which is never a smooth exercise. Another challenge is in coping with increasing complexities and security require- ments owing to various technologies being leveraged across businesses - integrating DevOps tools from different domains as well as working with outdated systems are some other chal- lenges associated with adopting DevOps. Although DevOps promises a lot for the software industry, its business benefits are yet to be fully reaped by organizations, which means the peak of DevOps implementation is yet to arrive. What DevOps Can Do? 200x 24x Reduce downtime 3x Improve deployment frequency Lower change failure rates 11

12. Benefits Elevated Customer Experience DevOps can propel customer experience to the next level by helping organizations improve their deployment frequency by 200x, reduce downtime by 24x, and lower change failure rates by 3x. DevOps can help organizations automate their entire delivery pipeline, which ensures the reliability and stability of an application after every new release and eliminates the time-con- suming, cumbersome as well as error-prone manual processes. The flawless performance of any application enables organizations to deliver a great customer experience, which will only serve to improve revenue and profits. Silos – A Thing of the Past The changing market dynamics are creating a need for development teams to break down their inter-departmental silos. DevOps will ensure the siloed approach of earlier times is a thing of the past as it facilitates increased interaction across teams comprising developers and operations guys, thus driving a significant amount of transparency across teams. DevOps can breach the typical IT barriers and eliminate old linear processes while driving the newer more organized processes. It has been generally observed that working in silos can cause a great deal of resentment as well as misunderstanding across different teams with little trans- parency on either side. DevOps addresses such concerns and drives swift execution of projects through an agile process and reduces bottlenecks. Faster Deployment Taking the DevOps route can help organizations drive a faster and more efficient software devel- opment process by its principles of automation, continuous delivery, and prompt feedback. It drives faster deployment because organizations can put new processes, systems, and applica- tions at a rapid pace. DevOps enables organizations to deliver desired results as employees require lesser development and deployment time to complete when they are working together. Accelerated Collaboration Another exciting feature of DevOps is that it drives a collaborative culture of fast-paced, continu- ous feedback that ensures timely resolution of any technical issues. DevOps drives mutual collaboration, communication, and integration across globally distributed teams that go a long way in improving business agility. It empowers different teams such as development and opera- tions to understand each other’s workflow. At the end of the day, all team members are collec- tively responsible for meeting the quality and timeliness of deliverables. Shorter Software Release Cycles Adopting a DevOps-based approach can go a long way in assisting organizations to drive shorter software release cycles. Shorter software release cycles help organizations effectively manage the planning and risk management as the progress is incremental, which also reduc- es the impact on system stability as well as helps in responding to evolving customer needs. 12

13. Impact Delivered 94% 12% 30% Defect Removal Efficiency (DRE) across engineering services Reduction in average call time Reduction in the product development cycle 94% Defect Reduction across Engineering Services by Leveraging a Cloud Platform for a US-based NEMT Service Provider A NEMT Service Provider was leveraging a legacy application that had inherent challenges. Innover helped the customer by shifting the legacy platform to the cloud by linking APIs with different ecosystem applications such as call center applications, vehicle provider applications, etc. Our solution resulted in a 94% defect reduction across engineering services as well as a sub- stantial reduction in the product development cycle and average call time. 67% 2.8x Faster Implementation & Deployment Improvement in NPS Reduced IT costs and Lower Setup Time 67% Faster Implementation & Deployment for an Omni-Channel Contact Center Integration Provider An omni-channel contact center integration provider was facing challenges in changing and updating Applications and Integrations in a timely and cost-effective manner. The customer needed to integrate its messaging hubs and real-time stream analytics with business process management ecosystem tools of the end-client. Innover stepped in and deployed its Low-Code rapid development framework that helped the client reduce its implementation and deployment time by 67% as well as integrate with numerous messaging platforms that led to a substantial improvement in its NPS. Our solution helped the customer reduce IT costs as well as setup time. 13

14. Accelerate Sales in North America and the European market Expedited Go-to-Market Strategy with new product launch Significantly increased revenue growth with its existing customers Accelerated Revenue Growth for a Canadian Media Conglomerate A Canada-based direct, indirect & corporate tax software & services provider was bogged down by operational challenges. The client needed to enable a flexible integration with business systems (ERP and commerce system) including support of multiple data exchange protocols as well as customize its data process scheduling, which would pave the way for time-sensitive execution of tasks. The client also wanted to align its data, which modifies source data to fit tax engine data requirements as well as enables seamless integration with tax engines. Innover listened to its client concerns and implemented middleware development and middle- ware updates. Our solution helped the client sell products in North America and the European market, expedited its GTM strategy with a new product launch, and significantly accelerated revenue growth with its existing customers. Conclusion The As-a-Service model is the future of the software industry as organizations increasingly focus on Digital Transformation. Today, no organization wants to fall behind and truly under- stand the importance of being agile and flexible – two key attributes cloud offers. The evolving market dynamics effectively mean that there will be no place for legacy systems that can’t change fast enough to keep with growing customer demands. Having huge development teams won’t be the right approach to adopt for organizations going forward. The need of the hour is for organizations to put in place an agile setup, wherein they can identify and trust third-party partners and work effectively together. Adopting an open-ended approach with their partners will help organizations find new ways to develop the best product in the market. If you would like to know more about our Software Engineering services, please reach out to our team. We’d love to help. Carroll McIntire Senior Vice President - Client Partner Innover carroll.mcintire@innoverdigital.com https://www.linkedin.com/in/carroll-mcintire-9753956/ 14