A significant amount of software development is being outsourced to countries such as India.
Many Indian software firms have applied for and received quality certifications like the ISO9001, and the number of quality
certified software firms has steadily increased. Despite its growing popularity among Indian software developers, there is very
little systematic evidence on the relationship of ISO certification to organizational performance. Using data on 95 Indian software
firms and drawing upon site visits and interviews with Indian software firms and their US clients, we develop a stylized model of a
firm that develops software for others to articulate the different ways in which ISO certification can affect firm profits. We conclude
that ISO certification enhances firm growth. The results provide partial support for the proposition that ISO certification also
enhances revenue for a given size, suggesting that firms are receiving a higher price per unit of output. In turn, this is consistent
with the notion that ISO certification also enhances the quality of output. Our field studies confirm that although most firms see
ISO certification as a marketing ploy, some of them do proceed to institute more systematic and better-defined processes for
software development.