Focus on Flexibility: Three Types of Flexibility

On a general level, we’ve identified three types of flexibility for software firms and IT services firms from the scientific literature. These are related to the firm’s resources and their adaptability:

1) the capability to enter new markets quickly, 2) to organize into new activities fast, and 3) to react fast to changes in customer demand.

As we reported earlier, in this year’s survey, Finnish software companies assess themselves as flexible in all dimensions.

Finnish software companies assess themselves as flexible

Based on this year’s survey, we analyzed the relatedness of flexibility to the properties of software firms. We examined whether or not flexibility is related to use of cloud platforms, provisioning of platforms to other firms, employing agile development methods, market orientation or experimental approach to business development. Just to name a few.

The results of our statistical analyses are visualised inĀ the presentation slide set we prepared.

We found that the capability to enter new markets quickly is associated with employing experimental approach to business development, over other characteristics of the firm. Further, we learned that capability to organize quickly and to react to changes in demand are associated with many things. It could be summarized that young firms with agile development methods are fast in re-organizing into new activities. However, collecting customer information regularly is also related with this type of flexibility — but this activity is by no means limited to startup firms. Finally, we discovered that the types of flexibility are partially but not clearly associated with growth and internationalization.

The conclusion seems to be thatĀ flexibility is mostly associated with experimental approach to business development and with use of customer data. These are then the means that software firms should investigate to improve their flexibility. It would make sense since flexible companies are better off under economic cycles, and the wildly successful firms have also flexibility in their recipe.

Our data reveals that both young and established firms collect customer data regularly and apply experimental approach. The means are also available for both software product firms and software services firms.


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