Next week’s class – Thursday, Feb 25 at 9:30am
Next week, we will meet on Thursday, Feb 25 at 9:30am – noon at Speakman Hall 200.
Agent Theory_Yiran
‘Agency Theory’
A supposition that explains the relationship between principals and agents in business. Agency theory is concerned with resolving problems that can exist in agency relationships; that is, between principals (such as shareholders) and agents of the principals (for example, company executives).
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 06 – IT Governance and Control – paper assignment
| Paper | Student | Background |
| Kirsch et al. (2002) | Yiran | Eisenhardt (1989) “Agency Theory: An Assessment and Review” AMR |
| Xue et al. (2011) | Xinyu | Sambamurthy and Zmud (1999) |
| Banker et al. (2011) | JK | Strategy-structure theory |
| Banker et al. (2011) | Vicky | Preston and Karahanna (2009) |
| Li et al. (2012) | Xue | Sarbanes–Oxley Act |
| Li et al. (2012) | Yae Eun | Feng et al. (1999) |
| Chatterjee and Ravichanran (2013) | Ada | Resource dependence theory |
| Chatterjee and Ravichanran (2013) | Aaron | Sobel mediation test |
Function Point_Xinyu
Please refer to the link below to see what Function Point (FP) is and how it works.
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.
Week5_Subramanyam et al (2012)_Xue Guo
In Search of Efficient Flexibility: Effects of Software Component Granularity on Development Effort, Defects, and Customization Effort
This paper mainly examines the relationship between software component design dimensions and software development outcomes in the context of model-driven, component-based software development (MDCD). It explores how different software design dimensions affect the trade-off between efficiency and flexibility.
The authors proposed that component granularity design (fine-grained & coarse-grained) decision plays an important role in the relationship between realized development efficiency and flexibility, i.e. the coarse-grained component would be associated with greater flexibility but less efficiency. The paper also proposes that mediating effect of in-process defects between component granularity and the development and customization efforts.
This paper empirically tests the effects of component granularity on development efficiency and flexibility from a sample of 92 data. The empirical models contain three dependent variables: in-process defects, development effort and customization effort. And the main independent variables include three measures of the component granularity: data elements, data layer interfaces and internal interfaces. The paper uses three-stage least squares regressions (3SLS) to address the simultaneity among certain measures and seemingly unrelated regression (SUR) to examine consistency of results. And it tests the hypothesis by conducting join tests for three measures of the component granularity. The empirical results support all of the author previous hypothesis.
The contribution of this paper is that it provides three measures of component granularity which match with the generic structural complexity dimensions and empirically establish the importance of component granularity design decision on the trade-offs between efficiently and flexibility.
Week5_Subramanyam et al. (2012)_Aaron
In Search of Efficient Flexibility: Effects of Software Component Granularity on Development Effort, Defects and Customization Effort
The trade-off between efficiency and flexibility in enterprise software production poses a big challenge for firms. New software development paradigms emphasize modular design of complex systems to overcome such challenge. However, there remains little understanding on the use of such software methodologies and associated extent to such trade-offs that can be influenced.
Subramanyam et al. (2012) addressed this gap by investigating the performance outcomes of a model-driven, component-based software development methodology. Specifically, they discuss how a design characteristics of software components, component granularity (with sub-dimensions of code volume, functionality and independence), affects development efficiency (development effort and in-process defects) and flexibility (customization effort).
To test such effects, they utilized a cross-sectional dataset that covers the software development information about 92 business software components of a firm’s enterprise resource planning product. Through 3SLS and SUR analysis, they found that coarse grained components are associated with higher flexibility but are associated with lower development efficiency. Moreover, they found that defects partially mediate the relationship between component granularity and flexibility.
The key implication from this study for software managers and designers who seeks to adopt modular design approaches is that active and judicious management of component granularity resulting from the decomposition of complex enterprise systems is necessary to simultaneously achieve flexibility and efficiency in software development.
Week5_Grewal et al.(2006)_Yaeeun Kim
This article examined the effects of network embeddedness on the success of open source projects. The authors assume heterogeneity and investigated how these structure differ across project and managers. They showed that there is significant effect of network embeddedness on technical and commercial success. By using latent class regression analysis, they showed that different aspects of network embeddedness have powerful but subtle effects on project success. In this case, the valence of word-of-mouth (WOM) decides the success (the number of page view or downloads).
According to the social contagion, positive WOM within the network of users would result in more users visiting the project websites (externality), and leads to commercial success. However, they assume that negative WOM would make a decrease in outcome (or the number of downloads).
The result shows that project network embeddedness positively influences project technical success, while the effect of project manager network embeddedness is more complex and different for older projects when compared with younger project. They used centrality for method: degree centrality is the number of projects in which the manager participates (structural embeddedness), betweenness centrality is the number of paths between other nodes on which the manager lies (junctional embeddedness), and eigenvector centrality is the manager participates in important projects (positional embeddedness).
In summary, the article shows that the effect of project network embeddedness positively influenced project technical success. However, the effect of project manager network embeddedness varies in the year of project. As a result, the network embeddedness was more influential to technical success, which were attractive to developers visually, but the influence was less powerful in commercial success, which were less visible to users.
Week 5 Ada—Ramasubbu and Kemerer (2015)
Technical Debt and the Reliability of Enterprise Software Systems:
A Competing Risks Analysis
Key Concept:
Technical Debt: Taking design shortcuts and other maintenance activities software organizations incur what has been referred to as technical debt, that is, accumulated maintenance obligations that must be addressed in the future
Motivation:
Technical debt reduction in an enterprise software systems environment is difficult, and maintenance of such systems is especially challenging because of the interdependencies and potential for conflict between the underlying, vendor-supplied platform and the customization done by individual clients. These interdependencies make it difficult to measure and assess the impact of technical debt on system reliability and therefore to plan the software maintenance activities necessary to reduce the debt.
Research Question:
- Model and empirically analyze the impact of technical debt on system reliability.
- Examine the relative effects of modular and architectural maintenance activities undertaken by clients in order to analyze the dynamics of technical debt reduction.
Main Findings:
- Technical debt decreases the reliability of enterprise systems.
- Modular maintenance targeted to reduce technical debt was about 53% more effective than architectural maintenance in reducing the probability of a system failure due to client errors.
- Modular maintenance had the side-effect of increasing the chance of a system failure due to vendor errors by about 83% more than did architectural maintenance activities.
Contributions:
- This study empirically measure the technical debt accumulated in real world enterprise software and to assess its dynamic impact on system reliability.
- They address this challenge by utilizing a competing risks analysis approach that account for event-specific hazards that impact the failure of enterprise software systems.
- They utilize the empirical results to illustrate how firms could evaluate their business risks exposure due to technical debt accumulation in their enterprise systems and assess the likely effects, both positive and negative, of a range of software maintenance practices.
Competing risks:
Competing-risks survival regression provides a useful alternative to Cox regression in the presence of one or more competing risks. For example, say that you are studying the time from initial treatment for cancer to recurrence of cancer in relation to the type of treatment administered and demographic factors. Death is a competing event: the person under treatment may die, impeding the occurrence of the event of interest, recurrence of cancer. Unlike censoring, which merely obstructs you from viewing the event, a competing event prevents the event of interest from occurring altogether, and your analysis should adjust accordingly. As a technical consequence, an individual observed to fail from a competing risk is assumed to still be at risk between its real-life failure time and its potential future censoring time.
This fact has two important implications. First, the naïve Kaplan–Meier that takes the competing events as censored observations, is biased. Secondly, the way in which covariates are associated with the cause-specific hazards may not coincide with the way these covariates are associated with the cumulative incidence.
A complete understanding of the event dynamics requires that both cause-specific and sub-distribution hazards to be analyzed. The difference between cause-specific and sub-distribution hazards is the risk set. For the cause-specific hazard the risk set decreases each time there is a death from another cause censoring. With the sub-distribution hazard subjects that die from another cause remain in the risk set and are given a censoring time that is larger than all event times.
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