Contracting for software development
Management Science
Management Science - Special issue: Frontier research on information systems and economics
Software assessments, benchmarks, and best practices
Software assessments, benchmarks, and best practices
Software Engineering Economics
Software Engineering Economics
Metrics and Models in Software Quality Engineering
Metrics and Models in Software Quality Engineering
Empirical Assessment of a Software Metric: The Information Content of Operators
Software Quality Control
Puzzles in software development contracting
Communications of the ACM - Information cities
Specification of Service Level Agreements: Problems, Principles and Practices
Software Quality Control
Portfolios of Control in Outsourced Software Development Projects
Information Systems Research
Contracts in Offshore Software Development: An Empirical Analysis
Management Science
IT Outsourcing Strategies: Universalistic, Contingency, and Configurational Explanations of Success
Information Systems Research
IT Outsourcing Success: A Psychological Contract Perspective
Information Systems Research
Software Engineering: A Practitioner's Approach
Software Engineering: A Practitioner's Approach
International Journal of Business Information Systems
Vendors' incentives to invest in software quality in enterprise systems
Decision Support Systems
| Hi-index | 0.00 |
Outsourcing of software development allows a business to focus on its core competency and take advantage of vendors' technical expertise, economies of scale and scope, and their ability to smooth labor demand fluctuations across several clients. However, contracting a software project to an outside developer is often quite challenging because of information asymmetry and incentive divergence. A typical software development contract must deal with a variety of interrelated issues such as the quality of the developed system, the timeliness of delivery, the effort and cost associated with the project, the contract payment, and the postdelivery software support. This paper presents a contract-theoretic model that incorporates these factors to analyze how software outsourcing contracts can be designed. We find that despite their relative inefficiency, fixed-price contracts are often appropriate for simple software projects that require short development time. Time-and-materials contracts work well for more complex projects when the auditing process is efficient and effective. We also examine a type of performance-based contract called quality-level agreement and find that the first-best solution can be reached with such a contract. Finally, we consider profit-sharing contracts that are useful in situations where the developer has more bargaining power.