Software development risk and project performance measurement: Evidence in Korea

  • Authors:

  • Kwan-Sik Na;James T. Simpson;Xiaotong Li;Tushar Singh;Ki-Yoon Kim

  • Affiliations:

  • School of Business, Seowon University, 231 Mochung-dong, Hungduk-gu, Cheongju-shi, Chungbuk 361-742, Republic of Korea;The College of Administrative Science, The University of Alabama in Huntsville, Huntsville, AL 35899, USA;The College of Administrative Science, The University of Alabama in Huntsville, Huntsville, AL 35899, USA;The College of Administrative Science, The University of Alabama in Huntsville, Huntsville, AL 35899, USA;School of Business, Kwangwoon University, 447-1 Wolgye-dong, Nowon-gu, Seoul 139-701, Republic of Korea

  • Venue:
  • Journal of Systems and Software
  • Year:
  • 2007

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Abstract

As more US companies outsource their software projects overseas, they find that it is more challenging to control software development risk in countries with dissimilar IT capabilities. Using data collected from software projects developed in Korea, we investigate the impacts of specific risk management strategies and residual performance risk on objective performance measures such as cost and schedule overrun. Our results indicate that, unlike subjective performance measures, our objective cost and schedule overrun performance measures are positively associated with residual performance risk in Korea. We also investigate the impact of two alternative conceptualization of software development risk on both objective performance and subjective performance. Finally, we discuss relevant policy implications for software development and outsourcing.