The South Korean Government and the software (SW) industry selected four major projects as the whole amendment of the Software Industry Promotion Act has been implemented starting from this year. Associations and groups related to the industry plan to join forces and work on early establishment of the amendment.
According to the Korea SW Industry Association (KOSA), the Ministry of Science and ICT (MSIT) and associations and groups such as KOSA (Chairman Cho Joon-hee), Korea IT Service Industry Association (Chairman Park Jin-guk), Federation of Korean Information Industries (Chairman Jung Jin-seop), Korea SW/ICT Association (Chairman Cho Poong-yeon), Korea Commercial Software Association (Chairman Song Young-seon), and Korea Software Cooperative (Chairman Han Byung-joon) that represent the SW industry recently held a meeting and discussed about the four projects.
The amendment was passed by the National Assembly in May last year and was implemented in December. The number of provisions increased from 55 to 69, and the amendment now targets the entire SW industry including education and convergence.
The MSIT and the industry picked out several important issues from the amendment.
Support for timely order is an essential matter for SW-related projects. A portion of public projects is still sent out after second quarter. Considering the fact that a project usually lasts about a year, projects being sent out after second quarter is a huge burden for the industry. If projects are sent out in a timely manner, the industry believes that it will be able to execute projects without any setback and raise product quality as well.
Separate order is an issue that the industry has been requesting continuously as a way of receiving proper price. In the past, customers were able to place separate orders for a project worth at least $440,000 (500 million KRW). However, the limit has been reduced to $260,000 (300 million KRW) with the amendment. 30 SW that is subjected to separate order has also been determined in order to reduce any confusion caused on customers. The industry plans to monitor how many separate orders are placed this year.
Vitalization of remote development has been discussed continuously as a way of solving the industry’s profitability getting worse due to a rapid increase in number of public agencies relocating to regions outside of metropolitan areas. The amendment allows SW companies to suggest a location to execute projects when customers sent out projects. Once development of remote places is vitalized, the industry will be able to minimize financial burden from cost of stay and others and raise its profitability.
SW project task deliberation committee’s role is crucial in order for fair change of task to take place. The amendment states operation of the committee. The committee will review contract amount and adjustment of contract duration when information on tasks is confirmed or changes and make final decisions. By doing so, it will be able to resolve a friction between the industry and customers that has caused by one-sided change of tasks by customers.
“The industry has huge expectation on the public market this year as the amendment was passed last year and specific enforcement decrees have been completed as well.” said Chairman Cho Joon-hee of the KOSA. “We are going to hold a meeting quarterly in order to share results and examine small details for each major project and continue to work closely with related groups.”
Staff Reporter Kim, Jiseon | river@etnews.com