Diversification of risk based on divided tasks in large-scale software system manufacture

Authors:
Tokuro Matsuo;Yoshihito Saito
Affiliations:
Yamagata University, Yonezawa, Yamagata, Japan;Yamagata University, Yonezawa, Yamagata, Japan
Venue:
Proceedings of the 3rd international workshop on Data enginering issues in E-commerce and services: In conjunction with ACM Conference on Electronic Commerce (EC '07)
Year:
2007

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Abstract

This paper presents a new contract model of risk aversion in large-scale software system manufacture. We consider a situation where ordering party does not order making software directly. Large-scale software consists of some modules. If the scale of a module is biggish, the software can be efficiently developed ordering as divided modules to some software developers. Generally, software developer has some risks as a company, such as, bankruptcy and dishonor. In such situation, it is important for an outsourcer to know how to reduce a rate of risks. In this paper, we propose a new risk diversification method of contracts with software developers in dividable software systems. In our protocol, we employ a payment policy of initial payment of and incentive fee. Then, the payment amount of initial fee is based on the developer's credit. Thus, our protocol prevents an outsourcer from risk on the project. Further we propose a distributed task model to reduce time of development. The results of experiments show the effective strategy for ordering party where risk and number of developers change. Our simulation shows that the outsourcer can get much earnings and performance selling/using the software at an early date when the number of modules and developers increase.