Weekly Briefs
Week7_Susarla et al. (2010)_Aaron
Firms are increasingly relying on IT outsourcing to improve services quality and to lower in-house IT spending. However, practitioners and academics have seen high rates of failure in IT outsourcing due to holdup problems, which are represented as underinvestment and inefficient bargaining because of contract incompleteness. There is a tension on the understanding of holdup problems. One stream emphasizes the importance of clearly designed contract whereas the other believes that the nature of contract is incomplete.
Drawing on the argument from latter stream, Susarla et al.(2000) argue that contract extensiveness, defined as the extent to which firms and vendors can foresee contingencies when designing contracts for outsourced IT services, can alleviate holdup. Moreover, they argue while extensively detailed contracts are likely to include a greater breadth of activities outsourced to a vendor, task complexity makes it difficult to draft extensive contracts. Furthermore, extensive contracts may still be incomplete with respect to enforcement. They therefore examine the role of non-price contractual provisions, contract duration, and extendibility terms, which give firms an option to extend the contract to limit the likelihood of holdup. Using a unique data set over 100 IT outsourcing contracts, they test and support those arguments in their research model.
As to their contributions, first, they support the argument that contracts are fundamentally incomplete and suggest that non-price provisions play a strategic role in contracts design. Second, to extend the literature of contractual solutions to holdup problems, their findings suggest payoffs from repeated interactions between parties reduces the probability of inefficient bargaining. Last but not least, this study also complements prior analytical work by providing empirical evidence to understand how parties anticipate and design contingencies ex ante that are important to manage potential problems ex-post.
Gopal and Koka 2012_ Yiran
The authors examine the interacting effect of formal contracts and relational governance on vendor profitability and quality in the software outsourcing industry. They focus on the presence of relations flexibility in the exchange relationship, a critical manifestation of relational governance. They hypothesize that 1.relational flexibility provides greater benefits to an exchange partner that faces the greater proportion of risk in a project, induced through the contract; 2. The benefits manifest on the performance dimensions that are of importance to the risk-exposed partner.
The proposed the following model to test their hypothesis. They proposed two sub model: the relational flexibility model and the profitability and quality model. To operationalize the focal variable relational flexibility, they measure it as an observed outcome that represents ex post, extra-contractual aspect of the relationship. They identify five areas, namely payment procedures, warranty and liability conditions, installation and testing procedures, disputes resolution and project management. In terms of the dependent variables, the project profit was measured using the data collected from the company data base for each project. The service quality is measured by a five-item survey.
The author used muli-pronged analytic strategy to test the hypotheses. To solve the problem of the endogenous interacting variables, besides the OLS and 3SLS, they also use the Treatment effect model. All the hypotheses are supported, showing evidence for the argument that asymmetric benefits from relational flexibility to different contracting parties in an outsourcing relationship. The results also indicates that relational flexibility positively affects profitability in only fixed price contracts, where the vendor faces greater risk, while positively affecting quality only in time and materials contracts, where the client is at greater risk.
Week7_Susarla et al. (2010)_Ada
Key Concept:
Hold-up problem: In economics, the hold-up problem is central to the theory of incomplete contracts, and shows the difficulty in writing complete contracts. A hold-up problem arises when two factors are present:
- Parties to a future transaction must make non-contractible relationship-specific investments before the transaction takes place.
- The specific form of the optimal transaction (e.g. quality-level specifications, time of delivery, what quantity of units) cannot be determined with certainty beforehand.[1]
The hold-up problem is a situation where two parties may be able to work most efficiently by cooperating, but refrain from doing so due to concerns that they may give the other party increased bargaining power, and thereby reduce their own profits. The hold-up problem leads to severe economic cost and might also lead to underinvestment.
Motivation:
To improve service quality and to lower information technology cost, firms are fueled to increase their use of IT outsourcing. However, practitioners and academics realized that IT sourcing is fraught with difficulties and high rates of failure. One of the underlying risks comes from the hold-up problem. This paper uses a unique dataset to empirically examine this question.
Main findings:
- Task scope is positively and significantly associated with extensive contracts;
- Task complexity is negatively associated with contract extensive ness;
- Task complexity is negatively associated with long term contracts, which suggests that firms might be wary of the greater threat of inefficient bargaining posed by the vendor in a longer term contract;
- Task scope is positively associated with the presence of extendibility clauses;
- Task complexity is positively associated with extendibility terms in contracts;
- Contract extensiveness is positively associated with duration;
- Contract extensiveness is positively associated with extendibility.
Contributions:
This paper highlights that contracts are fundamentally incomplete and that nonprice provisions play a strategic role in contracts structuring. Drawing on literature that describes contractual solutions to the holdup problem, they argue that parties are motivated by payoffs from repeated interaction to undertake specific investment and to reduce the likelihood of inefficient bargaining.
Week 7_Langer et al. (2014)_Xinyu Li
In this paper, Practical Intelligence (PI), a concept from cognitive psychology as a supplement of academic intelligence, is proposed to be a critical factor for Project Managers (PM) to make their projects successful in software offshore outsourcing. Based on an information processing perspective, the paper posits that the PMs’ PI is positively related to project performance. Meanwhile, it also hypothesize that the PI-performance relationship is positively moderated by project characteristics categorized as project complexity (software size and schedule compression) and team complexity (team size and team dispersion), and negatively moderated by task familiarity (PM-task familiarity and team-task familiarity) and stakeholder familiarity (team member familiarity and PM-client familiarity).
This research adopts a mixed methodology to conduct empirical analyses. It obtains PI data of 209 PMs in a software service company through case studies, combined with dataset from the company’s archive data containing characteristics for each of the PMs and the projects they led. Proposed moderators are derived from the dataset using different analytic tools and models. The dependent variable project performance is measured separately by cost performance and client satisfaction.
The results from an OLS and SUR model verify the main effect of PI on project performance as well as most of the moderating effects. With certain limitation such as a progressive learning bias of PI, the paper contributes to related literature by 1) introducing and conceptualizing PI as an important capability for PMs, 2) identifying the characteristics of project context that moderate the PI effect on project performance, and 3) providing sufficient empirical evidence.
Week7_ Gopal (2012)_Yaeeun Kim
In the vendor-client relationship, how to govern the relation is important, however, the effect depends on the hazard. The study mentions two gaps. First gap is the moderating effect of risk exposure on the benefit of relational governance. According to the prior studies, in the presence of formal contracting, relational governance has a significant impact on the outcomes of economic activities. On the other hand, relational governance provides symmetric benefits to all parties. In a way of understanding the contradicting findings, this study focused on the positive effect of relation on mitigating risk. This suggests that the parties who take larger risks might be more beneficial as a result. Second, the effect of relational governance on enhancing values differed by the dimensions of outsourcing (e.g. quality and profitability). However, it is important to understand that when there is not equivalently expected hazard size, why would the other party would accept the relational governance if the party is not be a beneficent as the other party. Relational governance highlights flexibility in the environment of projects, resulting in more beneficial to immediate project rather than long-run project.
To test hypotheses, 105 projects was collected from a software service frim. The relational governance is inherently required for this area since software service firms outsource, and the relationship between the vendor and developer is important. From the findings, the study shows that relational flexibility positively affects profitability in only fixed price contracts, where the vendor faces greater risk, while positively affecting quality only in time and materials contracts, where the client is at greater risk. Service quality was measured by question items.
Overall, relational governance (relational flexibility) is beneficial for profitability depends on the type of contract. As expected, the effect of relational flexibility on profitability is moderated by FP contracts. However, the effect of T&M contracts was insignificant on the effect of relational flexibility on project profit.
Week 7_Gopal and Koka (2012)_Vicky Xu
The Asymmetric Benefits of Relational Flexibility: Evidence from Software Development Outsourcing
Gopal and Koka (2012) examined how and when relational governance, operationalized as flexibility, provides benefits to exchange partners in the presence of formal contracts. They provided a more nuanced understanding of the relationship between formal and relational governance by contending. Gopal and Koka (2012) presented the conceptual model as the following (Figure 1, p. 559):
Gopal and Koka (2012) tested the hypotheses on a dataset of 105 software development outsourcing projects completed by an Indian software vendor. And they used a multi-pronged analytic strategy to test the hypotheses. The relational flexibility model included OLS, nonlinear 3SLS, and treatment effects. The Profitability and quality models include the interaction model, 3SLS, 2SLS, the non-interacted 2SLS, and the treatment effects.
Gopal and Koka (2012) found strong support for the hypotheses of asymmetric benefits from relational flexibility to different contracting parties in an outsourcing relationship. The findings in this paper highlight the need to establish risk exposure first, and then examine the effects of flexibility on performance contingent on risk exposure. And the findings also highlight the implications of relational governance for the performance dimensions of interest. The findings indicated that the need to incorporate a more nuanced, limited, and contingent view of relational governance and its benefits in extant theory, in contrast to the more expansive view of relational governance that predicts value for all partners to an exchange. What’s more, this paper also makes a methodological contribution.
However, this study has some limitations: (1). The data that from one vendor firm limits generalizability. (2). Dataset is small. (3). The measure of contract type is limited to the two extreme forms of contracts. (4). The measure of quality is perceptual and collected from the vendor. (5). The theoretical arguments used in this paper were based on the observed manifestation of relational governance in the specific exchange.
Week 7_Gopal et al.(2003)_Xue Guo
Contracts in Offshore Software Development: An Empirical Analysis
This paper is motivated by the tremendous growth of the offshore software development and the need to increase viability and profitability of vendor-client relationships. It empirically studies the determinants of contract choice in offshore software development projects and examines the factors that affect the project profits accruing to the software vendor.
The paper examines the adoption of the two prevalent forms of contracting in the software industry—fixed-price contract and time-and-materials contracts. The main risk will be borne by the vendor under a fixed-price contract, and the client under a time-and-material contract. Based on prior theories in contract, this paper presents four possible factors that may affect contract choice: software development risks, client knowledge set, bargaining power and market conditions. Empirically, most of the variables adopt measures from previous literature. In order to assess the reliability of the measurements, the paper uses multiple questionnaire items for one variable. The results show that project-related characteristics such as requirements uncertainty, project team size, and resources shortage significantly explain the contract choice in these cases.
Then the paper studies the efficiency of the contract by examining the effect of the information known during contracting on project profits and add three development factors to improve the fit of the regression analysis. The corresponding results show that vendor does make higher profits from time-and-materials contracts when control for other characteristics of the projects.
The contributions of the paper are that it empirically tests the determinants of contract choice in software industry and addresses the linkage between contract choice and project profits. However, the paper’s limitations are the restricted data set and measurement problem of some variable.
Week 7_Langer et al (2014)_Jung Kwan Kim
Langer, Slaughter, and Mukhopadhyay (2014) examine the impact of practical intelligence (PI) on project performance and the moderating effects of project complexity and familiarity. While the prior studies tend to specify formalized and widely-recognized management skills, knowledge, and experience of project managers, the authors bring up more subtle but dynamic capability, linking to the outcome of project.
Based on the in-depth data analysis on project progress and results in a leading software outsourcing vendor in India, the field study supports the following arguments:
- PM’s PI is positively associated with the increase in both cost performance and client satisfaction.
- The interaction of complexity with PI is significantly positive on the two types of project performance. In other words, when complexity of a project is higher, the impact of PI becomes stronger, leading to better performance.
- The interaction of familiarity with PI is significantly negative on the two types of project performance. That is, a project with low familiarity can harvest more benefits when a PM with high PI manage it.
Indeed, the supported arguments are intuitive and straightforward when we ponder upon the role of PI in a project management. The software outsourcing projects inevitably suffer from various factors that cause uncertainty and potential failure: requirement ambiguity, stakeholder conflicts, cultural misunderstanding, to name a few. PI basically helps a project manager resolve the critical, situational, and contextual problems, a capability that cannot be easily found or trained. A PM with high PI may be able to address the difficult problems, eventually bringing a higher chance of successful project results.
In conclusion, I think this study contributes much to the literature by finding the significant impact, the decent data source, and the parsimonious measure of PI.
Week6_Xue et al (2010)_Xinyu
Driven by the contradictory empirical findings from extant literature, Xue et al. (2010) seeks to answer the question about the relationship between environmental uncertainty and centralization/ decentralization of IT governance. Because IT governance can be multidimensional constructs, to gain a better understanding of the relationship, this paper only focus on IT infrastructure governance.
Most of the prior research suggests environmental uncertainty will increase the decentralization of IT infrastructure governance because decentralization improves flexibility and responsiveness of business units which are crucial in uncertain environments. However, other theories such as agency theory suggests that decentralization in highly uncertain environments increases headquarters’ monitoring and evaluation costs, and also prevents efficient coordination and resource sharing among different business units. Therefore, this paper proposes a curvilinear relationship between environmental uncertainty and IT infrastructure governance, in which decentralization will increase as uncertainty moves from low to intermediate but will decrease as uncertainty moves from intermediate to high. In addition, the paper also proposes that the curvilinear relationship will be strengthened when business units and their headquarters are in unrelated business.
The unit of analysis in this study is business unit. There are three main constructs. The IT infrastructure governance is measured by a binary variable indicating whether the majority of IT infrastructure decisions are made by business unit managers. Environmental uncertainty is conceptualized by three dimensions—dynamism, munificence and complexity. Business unrelatedness is measured as the difference between a business unit and its headquarters’ NAICS industry codes. The model is constructed using a logistic regression. Both the curvilinear relationship between environmental uncertainty and IT infrastructure governance and the moderating effect of business unrelatedness are empirically confirmed.
Week6_Li et al (2012)_Xue Guo
The consequences of information technology control weaknesses on management information systems: the case of Sarbanes-Oxley internal control reports
This paper investigated the association between the strength of IT control over management information systems and the subsequent forecasting ability of the information produced by those systems. Sarbanes-Oxley (SOX) Act of 2002 highlights the importance of information system control related to the financial reporting systems. It hypothesizes and tests that management forecasts are less accurate for firms with IT material weaknesses in their financial reporting system (FRS) than the forecast for firms that do not have IT material weaknesses.
At first, the paper compared the management forecast accuracy for firms having IT material weaknesses with firms having either effective internal control or non-IT material weaknesses. Then the paper investigated whether certain categories of IT material weaknesses have a greater impact on the informational quality of the FRS than others.
The paper acquired the data from SOX 404 reports that available on Audit analytics from 2004 to 2008. The model uses management forecast error as the proxy for decision outcomes resulting from the quality of information produced by the FRS. The results show that firms with IT-related internal control material weaknesses have lower management accuracy than the firms have efficient internal control and have non-IT material weaknesses. And, when categorizes IT control quality into three dimensions: data processing integrity, system access and security, and system structure and usage, the paper found that data processing integrity has a greater impact on information quality than others.
One contribution of this paper is to highlight the implications of IT control on information quality issues for system users and decision makers. Also, the paper provides evidence that internal control reports, mandated by SOX, can provide information to system users about the underlying system and data quality.
Week6_Banker et al. (2011)_Vicky Xu
CIO Reporting Structure, Strategic Positioning, and Firm Performance
Since the previous studies on the CIO reporting structure is still unclear, and the pursuit of the ideal CIO reporting structure remains an unresolved issue both in the academic and also the practitioner IS literature, Banker et al. (2011) investigate the alignment or “fit” between the CIO (a.k.a. CTO) reporting structure and a firm’s strategic positioning, using business performance as the outcome of such alignment. The CIO manages IT within a firm, the responsibilities of CIO includes but not limited to managing IT resources, overseeing IT operation, involving firm strategy making, and improving firm performance.
Banker et al. (2011) address two research questions:
- How does a firm’s strategic positioning (differentiation or cost leadership) influence its CIO reporting structure (CIO reporting to the CEO versus to the CFO)?
- Is there an alignment or “fit” between the CIO reporting structure and the firm’s strategic positioning that is associated with higher firm performance?
Depending on the reporting structure, a CIO can either report to a CFO or a CEO within a firm. Depending on the business positioning strategy, a firm can be a product differentiator or cost leader. The authors consider two CIO reporting relationships that correspond to a firm’s strategy: (1) direct reporting to the CEO, enabling the CIO to use IT to support a differentiating strategy, or (2) direct reporting to the CFO, enabling the CIO to use IT to support a cost leadership strategy. The following table (Table 1, p492) shows the reporting structure and strategic positioning arrangement:
By analyzing the data set that collected by integrating data from two surveys, Banker et al. (2011) find out that the CIO-CEO reporting structure is more suitable for firms using the position strategy of differentiation; while the CIO-CFO reporting structure is more fitting for firms using the position strategy of cost leadership.
Week 6_Chatterjee and Ravichandran (2011)_Aaron
Decisions regarding inter-organizational information systems (IOS) ownership and control have been crucial for viability of these systems. Nonparticipation in IOS and IOS failure cause major concerns for practitioners but remain little understood academically.
Chatterjee and Ravichandran (2013) therefore investigate why and how firms seek ownership and control of IOS. They propose two distinct facets of IOS governance, transactional and financial governance, which represent firms’ financially responsibility for IOS and controls on transactions within IOS respectively. Drawing on resource dependence theory, they model the key motivators of IOS governance as resource criticality and replaceability, which affect IOS governance through their influences on operational integration existing between partners. Furthermore, they argue technological uncertainty moderates such influences.
Their model was empirically tested using data gathered from a survey of 159 US manufacturing firms. Through mediation analysis and mediated moderation test, they found that resource criticality positively affects the extent of financial and transactional IOS governance by increasing the needs for operational integration, whereas resource replaceability negatively affects them by reducing the need for operational integration. In addition, they also found technological uncertainty creates disincentives for IOS governance by weakening the positive influence of resource criticality on operational integration, but does not significantly affect the relationship between resource replaceability and operation integration.
Theoretically, this study contributes to understand the drivers of IOS governance choices made by firms, extends and complements the research stream on the role of IOS in fostering tighter buyer-supplier relationships. Practically, third party providers and technology vendors are suggested to create appropriate offerings by understanding the fit between firms’ IOS governance decisions and existing exchange arrangement. Moreover, firms seeking to leverage IOS for competitive benefits are encouraged to closely examine the contingencies that influence their supplier relationships before investing in these systems.
Week 6_Banker et al. (2011)_Jung Kwan Kim
Banker, Hu, Pavlou, and Luftman (2011) examine the CIO reporting structure and its impact on performance contingent on the alignment with strategic positioning. The prior studies in the information system literature have not identified the ideal CIO reporting structure. The authors argue that the ideal reporting structure should not be blindly established simply based on the strategic role of IT in a firm; the fit between a firm’s strategic positioning and its CIO reporting structure should be considered to secure higher performance, the authors contend.
To support the main argument, Banker, Hu, Pavlou, and Luftman (2011) posit the following hypotheses:
- H1: Differentiators are more likely to have their CIO report to the CEO.
- H2: Cost leaders are more likely to have their CIO report to the CFO.
Those hypotheses are theoretically and empirically well supported in that a direct access to a CEO may be helpful to convince the needs of risky IT initiatives to create differentiated customer value while a reporting to CFO may better promote the operational efficiency by lowering costs.
Now, the discussion of H1 and H2 naturally leads to the argument on the match between the strategic positioning and the reporting structure.
- H3: Alignment between strategic positioning (differentiation and cost leadership) and CIO reporting structure (CEO and CFO) is associated with a higher firm performance.
The long standing resource based view (RBV) buttresses the hypothesis in that complementary resources of a firm can be combined to produce higher performance.
In conclusion, the CIO reporting structure largely depends on the firm’s strategic positioning. Indeed, the reporting structure does influence significantly on the firm’s performance. However, the effect of the reporting structure can be materialized only conditional on the fit with the strategic positioning.
Week 6 Kirsch et al. (2002)_Yiran
Firms have begun to utilize a client liaison role as a means of fostering business unit ownership and leadership of IS projects, which exercise control of IS project leaders to ensure that IS projects make progress in conformance with the business value propositions and proposed schedules and budgets. This paper aims to examine the exercise of project control across the client-Is relationships that may take on a variety of forms (hierarchical and lateral settings). The author defined control as all attempts to motivate individuals to achieve desired objectives, and it can be exercised via formal and informal modes.
The research model suggests that the client liaison’s choice of control mode is dependent on behavior observability and outcome measurability. This relationship between antecedent conditions and control modes is moderated by the client liaison’s understanding of the information. Based this mode, four hypotheses are developed
HYPOTHESIS1. High levels of outcome measurability will be associated with the exercise of outcome control. (Supported)
HYPOTHESIS2. High levels of behavior observability and client’s understanding of the IS development process will be associated with the exercise of behavior control. (No interaction, but main effect)
HYPOTHESIS3. High levels of behavior observability and low levels of client understanding of the IS development process will be associated with the exercise of clan control. (Supported)
HYPOTHESIS 4A. Low levels of outcome measurability will be associated with the exercise of self-control. (Partial supported)
Data were gathered from a questionnaire survey of 69 pairs of clients and IS project leaders. Regression analysis was used for hypothesis testing. The results of this study provide support for most of the hypothesized antecedents of the exercise of control by client liaisons. The distinctive finding of this study is that high behavior observability is associated with the use of either behavior or clan control. However, the key limitation is the moderate sample size.
Week6_Chatterjee and Ravichanran (2013)_Ada
Governance of Inter-organizational Information Systems:
A Resource Dependence Perspective
Motivation:
Though IOS generated benefits have received much attention, less research has been directed toward understanding the reasons for the successes and failures of these systems. As decisions related to IOS ownership and control have always been crucial for the viability and survival of these systems, it is important to examine the factors that influence IOS ownership and control decisions.
Research Questions:
In this paper they investigated why and how firms seek ownership and control of IOS, which they labeled as IOS governance choices. Specifically, the research questions are:
- How do resource criticality and replaceability affect the financial and transactional IOS mediating by operational integration?
- How technological uncertainty moderate the impact of resource criticality and replaceability on the financial and transactional IOS?
Main Results:
- Resource criticality increased the need for IOS governance by positively affecting operational integration, while resource replaceability diminished the need for IOS governance by negatively impacting operational integration.
- Technological uncertainty negatively impacted the need for IOS governance by attenuating the positive effect of resource criticality on operational integration. However, results indicate that technological uncertainty failed to enhance the negative effect of resource replaceability on operational integration and hence failed to weaken the need for IOS governance as hypothesized.
Resource Dependence Theory:
Resource dependence theory (RDT) is the study of how the external resources of organizations affect the behavior of the organization. Resource dependence theory has implications regarding the optimal divisional structure of organizations, recruitment of board members and employees, production strategies, contract structure, external organizational links, and many other aspects of organizational strategy.
The basic argument of resource dependence theory can be summarized as follows:
- Organizations depend on resources.
- These resources ultimately originate from an organization’s environment.
- The environment, to a considerable extent, contains other organizations.
- The resources one organization needs are thus often in the hand of other organizations.
- Resources are a basis of power.
- Legally independent organizations can therefore depend on each other.
- Power and resource dependence are directly linked: Organization A’s power over organization B is equal to organization B’s dependence on organization A’s resources.
- Power is thus relational, situational and potentially mutual.
Week6_Li et al. (2012)_Yaeeun Kim
The greatest implication of this paper is oriented from testing the link between system quality and information quality, via actual decision making outcomes. They assess the forecast accuracy when IT material weaknesses are present. In short, firms with IT material weakness are associated with less accurate management forecasts. Improvements in IT control quality are associated with decrease in forecast error. Among the types of IT control problems, systems with IT control problems related to data processing issues are associated with low quality of decision outcome.
This empirical study, which used SOX 404 control reports, contributes to explaining the implications of IT controls on information quality issues for system users and decision makers. Just as manufacturing process focuses on managing the quality of input for enhancing the outcome, information systems focus on managing high quality of information for a better decision making.
The authors also examined the impact of the different dimensions of IT material weaknesses. From the findings, the authors showed that firms with IT material weakness have significantly larger management forecast errors, and the errors are larger than those of firms with non-IT material weaknesses, as problems in information systems could directly impact the FRS output data that management uses to form their forecasts.
Although IT controls are often correlated with the extent of overall control weakness, this study try to answer the remaining unclear points that which type of material weakness yields a greater impact on the quality of information produced by an information system. The control weakness is solely based on the firm’s SOX 404 reports. There are some limitations of this paper: Can the types of control weakness all be answered within this archival report? Also, it is hard to say that the severity of weakness is controlled across the firms.
Week 5_Grewal et al.(2006)_Yiran
This paper examined the effects of network embeddedness—or the nature of the relationship among projects and developers—on the success of open source projects. The key of understanding this paper lies in knowing how authors operationalize the key concepts, social capital and network embeddedness. They view social capital as the relations among developers, including project managers, and projects that provide developers access to information and (perhaps) embedded resources. In this paper, they refer the effect of social capital as network embeddedness. The term “network embeddedness” was used to to capture the architecture of network ties, and then three sub-constructs are defined to represent network embeddedness, i.e., structural, junctional, and positional embeddedness. Specifically, they used degree centrality—the number of projects in which the manager participates—to operationalize structural embeddedness, betweenness centrality—the number of paths between other nodes on which the manager lies—to operationalize junctional embeddedness, and eigenvector centrality—the manager participates in important projects—to operationalize positional embeddedness.
The author argued that high-quality information should be more useful in newer projects, and the value of project manager embeddedness should decline as projects age. In this case, Technical success was measured as the number of concurrent versioning system (CVS) commits. With respect to commercial success of the project, since project network embeddedness would facilitate the dissemination of this information. they assumed that the valence of the salient reputation dimension is positive (negative), word of mouth should increase (decrease) the commercial success of the project. Thus, project network embeddedness can have a positive or a negative effect on commercial project success. Commercial success was measured by the number of downloads over the life of a project.
Latent class regression analysis was used to show that multiple regimes exist and that some of the effects of network embeddedness are positive under some regimes and negative under others. The result confirmed that considerable heterogeneity exists in the network embeddedness of open source projects and project managers. Overall, the results for the effects of embeddedness are much stronger for technical success than for commercial success, implying that network embeddedness has a greater role to play in technical success than in commercial success.
Theoretically, this paper recognized that the effect of network embeddedness varies with the dependent variable, i.e., technical or commercial project success. Managerially, the results showed that projects with more developers see greater technical success in the later stages of project development, i.e., as the projects age.
Week5_Bank and Slaughter (2000)_Xinyu
Banker and Slaughter (2000) initiates an effort to study the link between software design decisions and software enhancement outcomes. They examine under what conditions software structure is more beneficial than other conditions in terms of reduced enhancement costs and errors.
In specific, they introduce software structure as a moderator of the relationship between software enhancement outcomes and two properties of software, namely software volatility (the frequency of enhancement per unit of functionality) and total data complexity (the number of data elements per unit of functionality). While software volatility and total data complexity are proposed to be positively associated with software enhancement outcomes for intuitive reasons, higher levels of software structure are proposed to mitigate those impacts on the enhancement outcomes. This is because structured software allows maintainer to focus particular issues on only the particular parts after getting familiar with the software through the practice of frequent enhancement, and structured software can be easily simplified by structural decomposition, thus the enhancement costs and errors will be reduced. However, since excessively high levels of structure are also redundant and problematic, the paper also discusses optimal levels of structure for different types of software applications.
The empirical results confirm that higher levels of structure are more advantageous for software with higher volatility and complexity, in terms of reducing enhancement costs and errors. Empirical evidence also shows that the optimal level of structure increases with software volatility and complexity. Finally, the paper identifies application type as an indicator for predicting future volatility and complexity, so that an optimal level of structure can be achieved at an early stage.
Week5_Krishnan et al. (2000)_Vicky Xu
An Empirical Analysis of Productivity and Quality in Software Products
Most of prior empirical research on software maintenance has not been able to provide answers to problems related to cost overrun since productivity and quality modeling efforts have often considered either the productivity or the quality. And empirical evidence on the effect of process factors is mostly restricted to case studies and experience reports of a few projects.
Krishnan et al. (2000) fill this void by examining the relationship between life-cycle productivity and conformance quality in software products. Krishnan et al. (2000) address the research questions as following:
- What is the trade-off between quality and life-cycle productivity?
- What are the effects of the development process on life-cycle productivity and quality?
- Does up-front resource deployment pay off?
- What are the effects of development resources on productivity and quality?
The conceptual elements of the research model in this paper (is shown in Figure 1., p. 748) as the following diagram:
Krishnan et al. (2000) collected data on commercial software projects of a leading vendor. Then, Krishnan et al. (2000) consider the software process areas specified in the Capability Maturity Model (CMM) that are relevant to software productivity and quality, and consider alternate specifications (linear versus nonlinear) for the relationship between various explanatory variables and quality or life-cycle productivity. And the estimation procedures include OLS, SUR, and 2SLS.
Krishnan et al. (2000) find: (1) Evidence for both direct and indirect (through quality improvement) effects of personnel capability on software development and maintenance productivity. (2) Investments in the early stages of software development improve quality. (3) Several quality drivers in software products.
Three main contributions of this paper are: (1) Developing models for software life-cycle productivity that include both development and maintenance costs. (2) The models can capture the effect of the software development process measured at the project level based on the practices specified in CMM key process areas on life-cycle productivity and quality. (3) Studying the effect of front-end investment in product development on conformance quality. (4) Validating the proposed models by using primary data on system software projects of a large commercial software developer.
Week 5_Ramasubbu and Kemerer (2015)_Jung Kwan Kim
Ramasubbu and Kemerer (2015) examine the technical debt and the interdependency between client and vendor maintenance activities. Their analysis reveals that there do exist the dynamics of technical debts reduction and its impact on the reliability of commercial-off-the-shelf (COTS) systems.
One of the fundamental findings is that technical debt is “associated with an increase in the probability of a system failure” because it increasingly deteriorates knowledge asymmetry between vendors and clients. Modular maintenance by clients ameliorates the reliability of a system through reducing the errors due to clients more than architectural maintenance does mainly because details in architectural knowledge of a system are not well disseminated to clients’ software teams. Interestingly, modular maintenance is more likely to increase the probability of system failure due to vendor errors than architectural maintenance is. This contrasting findings is supported by the fact that modular maintenance by clients may not consider the overall architectural structure of a system, leading to conflicts with a new version of the system or a vendor-driven platform updates.
The empirical contributions of Ramasubbu and Kemerer (2015) deserve highlighting. The newly devised competing risks analysis shows the different impact of the trade-off relationship between modular and architectural maintenance on vendor vs. client errors. Mediation analysis clearly shows the mediating impact of technical debt between each type of maintenance and system failure due to client errors. The analysis is useful to present the existence of “benefit zone” out of the trade-off effect, suggesting that discretionary decision on maintenance should be employed.