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Outsourcing operations have become an essential factor in enhancing the competitive advantage of software development enterprises. In this work, we examine the application of combinatorial auction in technician assignment and outsourcing service procurement, which is conducted by software enterprises to minimize the total cost of developing all the software. It gives rise to an unrelated parallel machine scheduling problem incorporating combinatorial auction (UPMSCA). Here, the jobs represent the software to be developed, and they consume the perishable time resources of the development technicians, which can be translated into monetary costs. The objective is to schedule the jobs on parallel machines or select the bid with the lowest cost. To solve the problem, we propose an arc-flow model and a set-partitioning formulation with column-based constraints. A branch-and-price algorithm with four branching rules is proposed and utilizes an effective dynamic programming algorithm to solve the pricing subproblem in the pattern-based formulation. To speed up computation, a bidirectional search method and a dominance rule are applied. Results from extensive computational tests on 100 sets of randomly generated instances demonstrate the performance of our algorithm. [ABSTRACT FROM AUTHOR]

Global software development (GSD) refers to developing software with a distributed team spanning multiple locations and time zones. Based on relationships, there are four types of outsourcing: dyadic (one client–one vendor), multi‐vendor (one client–many vendors), co‐sourcing (many clients–one vendor), and complex outsourcing (many clients–many vendors). Compared to the other types of outsourcing contracts, complex outsourcing contracts are the hardest to work on and have the highest risk of project failure. This paper presents a model, the complex outsourcing relationships management model (CORMM), to assist the complex outsourcing stakeholders (both the clients and vendors) in managing their relationships in the context of GSD. This paper aims to develop a CORMM to assist the complex outsourcing relationships management stakeholders in GSD. Also, we are interested in identifying the applicability and effectiveness of the CORMM in the real‐world industry. The research approach follows a structured methodology comprising multiple phases. Initially, it leverages a systematic literature review (SLR) as its primary research method. The second phase involves the validation of the SLR findings via an empirical study. Subsequently, in the third phase, a model is developed. Finally, the proposed research approach is validated by incorporating two industrial case studies to assess the organization's relationship management utilizing the Motorola tool. The case study results show that CORMM can successfully point out relationship management issues in a complex outsourcing context. The feedback received from the participants of both companies indicates several positive and valuable insights about the CORMM and its application in the context of complex outsourcing relationships. The results highlight that CORMM serves as an assessment tool for evaluating an organization's relationship management capability and a means for organizations to enhance their position. Through CORMM, complex outsourcing organizations (many clients–many vendors) can identify strengths and weaknesses in their relationship management practices, enabling targeted improvement efforts. [ABSTRACT FROM AUTHOR]

Software maintenance is the process of fixing, modifying, and improving software deliverables after they are delivered to the client. Clients can benefit from offshore software maintenance outsourcing (OSMO) in different ways, including time savings, cost savings, and improving the software quality and value. One of the hardest challenges for the OSMO vendor is to choose a suitable project among several clients' projects. The goal of the current study is to recommend a machine learning-based decision support system that OSMO vendors can utilize to forecast or assess the project of OSMO clients. The projects belong to OSMO vendors, having offices in developing countries while providing services to developed countries. In the current study, Extreme Learning Machine's (ELM's) variant called Deep Extreme Learning Machines (DELMs) is used. A novel dataset consisting of 195 projects data is proposed to train the model and to evaluate the overall efficiency of the proposed model. The proposed DELM's based model evaluations achieved 90.017% training accuracy having a value with 1.412 × 10-3 Root Mean Square Error (RMSE) and 85.772% testing accuracy with 1.569 × 10-3 RMSE with five DELMs hidden layers. The results express that the suggested model has gained a notable recognition rate in comparison to any previous studies. The current study also concludes DELMs as the most applicable and useful technique for OSMO client's project assessment. [ABSTRACT FROM AUTHOR]

Management of COSD projects is a challenging task due to number of distant development locations in different time zones, client and vendor organizations, different cloud deployment models and range of different service level agreements. The objective of this study is to identify the barriers associated with managing COSD projects. We implemented a Multivocal Literature Review to identify barriers that influence management of COSD projects. We identified 21 COSD management barriers from 165 primary studies. The comparison between the barriers identified from formal and grey literature indicate that there are similarities between the barriers investigated from both types of literature. Moreover, client-vendor analysis shows that there is no significant difference between COSD management barriers associated with both types of organizations. We believe that the study findings will assist both research and industry community to better understand and manage COSD projects. [ABSTRACT FROM AUTHOR]

A misincentive is characterized as an incentive producing the opposite effect of motivating or preventing some specific action. In some circumstances, contract penalties such as sanctions and fines on late delivery or low-quality software encourage the irregularities instead of preventing them from occurring. The present study models misincentive behaviors in Information Technology Outsourcing (ITO) transactions as a Principal-Agent problem. Considering the non-linear relationship in software vendors' cost structure and the client's sensitivity to the product/service quality and delivery time, we offer theoretical modeling elucidating the best responses on agreements under incomplete and asymmetric information. Some empirical evidence of contractual misincentives is reported in outsourcing arrangements between private institutions and public administrations in Portugal. The contracts were divided into three categories: pure contracts with no incentive clauses, contracts with no explicit monetary penalties, and contracts under explicit sanctions. The results suggest that the knowledge of the penalty reduces the Agent's uncertainty about the Principal's cost structure and might lead them to intentionally delay the delivery of the technology. [ABSTRACT FROM AUTHOR]

There is a need to identify requirements engineering (RE) practices that are important to global software development (GSD) project success. The objective of this paper is to report our recent empirical study results which aimed to identify the RE practices that are important to GSD projects. This study used an online survey questionnaire to elicit data from 56 RE experts of GSD projects. The survey included 66 RE practices identified by Sommerville et al. for non-GSD projects. The participants were asked to rank each RE practice on a four-point scale to determine the degree of importance of each practice in the context of GSD projects. This research identified a set of six key RE practices that mainly focuses on GSD project stakeholders, scope, standards and requirements traceability management. One common theme that is evident from the RE experts’ feedback analysis is the standardization of requirements documents to reduce requirements inconsistencies and improve communication in diverse and distributed GSD project environments Our results show that not all 66 RE best practices are important for GSD projects. We believe that a good understanding of the identified RE practices is vital in developing and implementing the situation-specific RE processes for GSD projects.

Monitoring and contract renegotiation are two common solutions for addressing information asymmetry and uncertainty between a client and a vendor of software outsourcing services. Monitoring is mostly applied in time-and-materials contracts, as a basis for inspecting and reimbursing the vendor's efforts in system development. Renegotiation, by contrast, is deployed in fixed-price and time-and-materials contracts to mitigate the loss of surplus from uncertainty after system development. We investigate the interaction between monitoring and renegotiation and examine the corresponding contract choice problem. We find that the client benefits from renegotiation based on two effects: an uncertainty-resolution effect and a post-development incentive effect, which incentivizes the vendor to exert additional effort in system development. Monitoring does not resolve uncertainty, although it does encourage the vendor to exert additional effort, a pre-development incentive effect. Our analysis shows that the choice of renegotiation or monitoring depends on the interactions of the above effects, which are moderated by the renegotiation cost, monitoring cost, and bargaining power in renegotiation. When renegotiation cost is low: if the client has high bargaining power and low monitoring cost, monitoring and renegotiation are complements and both are selected; otherwise, the two instruments are substitutes and contract renegotiation is preferred. When renegotiation cost is high: monitoring substitutes for renegotiation and the client only chooses monitoring if the cost to do it is low; or else neither is used. Overall, this research shows that four appropriate contract strategies should be used under somewhat different circumstances. We further analyze the impacts of some other key aspects of software outsourcing and extend the base model to address two alternative situations to show the robustness of our findings. The results apply to a range of software reliability growth models, including when machine learning or cloud computing are used. [ABSTRACT FROM AUTHOR]

Offshore software development outsourcing (OSDO) is a modern business strategy for producing high-quality software at a low cost. The OSDO refers to the practice of contracting to an offshore (extrinsic) organization to perform some or all software development work of a product. For the benefit of the OSDO vendors, this paper aims to develop a “communication and coordination challenges mitigation model” (CCCMM) that provides solutions for unambiguously defined communication and coordination processes in global software development (GSD) environment. Our proposed model is based on the fuzzy multi-attribute decision-making (FMADM) approach incorporating the capability of group decision-making. The FMADM approach is used both in the ranking of survey and assessment of case studies. First, the authors undertook a systematic literature review (SLR) that identified all cited challenges from a set of 101 articles. We identified 18 problem areas faced by the GSD vendors in OSDO relationships. Of these, six were ranked as critical. For the purpose of identifying corrective interventions, a second SLR was conducted that revealed 75 remedial measures extracted from 63 chosen articles. To validate our SLR findings, we surveyed 42 outsourcing experts from six countries. We also categorized six critical challenges and 75 corrective practices into four mitigation levels based on CMMI, SOVRM, and SOPM. In addition, two case studies were conducted to evaluate CCCMM outcomes in OSDO companies. The assessment results of the first case study do not recommend Company-A for the successful implementation of level-2 of the CCCMM, so Company-A stands at level-1. We have observed from the second case study that Company-B has implemented all the critical challenges of the level-2 only; therefore, Company-B is at level-2 “success” of the proposed assessment model.

Today software outsourcing becomes a common tradition for business industry to enhance their business by hiring high qualified staff and lowering their expenses. In spite of fact several edges of software outsourcing there are various factors that affect the quality of software outsourcing. The main purpose of this protocol is to find out those barriers that affect the quality of software development outsourcing from vendor’s perspective. Systematic Literature Review (SLR) will be used to discover all those barriers that impact the quality of software outsourcing from vendor perspective. The expected outcome of this review will be find out those barriers that affect the quality of software development outsourcing and also assist vendor organizations to handle software outsourcing quality (SOQ) issues. The ultimate goal of this protocol is to develop Software Outsourcing Quality Challenges Model (SOQCM).

Software development is a set of activities which time, budget, and effort of the human resource. Over the years, the software development process has matured to enable the adaptation and integration of commercially available components. The availability of commercially-off-the-shelf and modifiable-off-the-shelf components has transferred the complexity from development and design phases to the integration phase and we can observe large- application development by integrating the available components. Often, due to the limitation of technological and other resources, developing a software application in-house may be less beneficial. In such circumstances, development firms opt to either buy software or outsource the development. In this paper, we identify the factors that govern the decision of making software applications in-house, outsourcing them, or buying them from the market. Since the concept of component integration is more common in large scale applications, in this paper we consider this case.

With the development of software outsourcing industry, there is a growing trend to establish the software outsourcing alliances. Whether alliances’ profit distribution is reasonable affects directly and significantly alliances’ stability. This paper introduces the Shapley value method which is a common profit distribution method applicable to multiple people cooperation. Due to the weakness of the Shapley value method, AHP is used to analyze the influence factors and adjust the model. The anticipated outcome of the result is to provide a theoretical support for the profit distribution of the software outsourcing alliances in the future.

Para las organizaciones la estrategia de outsourcing de software (OS) se ha constituido en una alternativa estratégica de reducción de costos y mejora de la calidad de software. Sin embargo, la complejidad de la gestión de este tipo de proyectos aumenta, debido a la relación de actores diferentes (cliente y proveedor), de la cual depende en gran medida el éxito de estos proyectos. Identificar, analizar y gestionar los riesgos que afectan este tipo de proyectos, son buenas prácticas que se pueden llevar a cabo para establecer indicadores de gestión claves para el éxito de los proyectos. Es por esta razón que el objetivo de este trabajo es diseñar una taxonomía de riesgos de OS, es decir, una estructura de clasificación jerárquica de riesgos basada en los proyectos de OS que facilite la identificación de riesgos, que contribuya a la realización de un análisis de riesgos ágil y preciso, para su posterior gestión a lo largo de todo el proceso de OS. La taxonomía que se propone ha sido validada en un caso de estudio correspondiente a un proyecto de compra de software preelaborado. Los resultados se muestran en la última parte de este trabajo y se analiza la forma como dichos resultados impacta el proyecto en el cual fue implementada la taxonomía y su utilidad en el refinamiento de los procesos organizacionales de la empresa, a partir de las lecciones aprendidas.In recent years, the software outsourcing (SO) strategy for organizations has become a useful and important alternative, as well as SO projects. SO projects have many complexities due to several factors affecting management. These complexities and importance of SO require that successfull projects meet a parameter set: budget, cost, schedule, among others. This requirement can be met through the implementation of methods and techniques of risk management (RM). RM is a process to prevent problems, establish actions to follow, and monitor the project to ensure success. Likewise, it is considered a key process in making decisions about risks. In this paper, we present a proposal for the risks identification related to software outsourcing process. Risk identification is the basic activity on which rests the success of RM process. Our proposal is a risk taxonomy of SO, consisting in a hierarchical classification structure based on the RM of SO projects. The taxonomy was validated in a study case: Project of pre-developed software acquisition. The results have been useful for the organization and for the refinement of the proposal, thanks to lessons learned.

En este artículo, se realiza un estudio de estándares y modelos de ingeniería de software con el fin de determinar similitudes entre los mismos, desde el punto de vista del proceso de gestión de riesgos en el ámbito de outsourcing de software. Para seleccionar y analizar dichos estándares y modelos de manera formal, se utiliza el método MSSS desarrollado a partir de un profundo análisis de diferentes mapeos de estándares y modelos, que dan lugar una serie de pasos o pautas que permiten formalizar y organizar el estudio. Esta investigación permite, además de determinar las similitudes, hacer una comparación de cada estándar y modelo, previa selección y clasificación de los mismos según el ámbito en el que se enfoca.In this paper, a study of software engineering standards and models to determine similarities between them has been carried out, from the viewpoint of risk management process in the field of software outsourcing. To select and review these standards and models, MSSS model was used, which was developed from a thorough analysis of different mapping standards and models, leading a series of steps or guidelines to help formalize and organize the study. Besides determining similarities, this research makes a comparison of each standard and model, prior selection and classification of them, according to the area it focuses.

This paper proposes a risk taxonomy that focuses on software acquisition environment. According to this, the goal of this approach is to define an ordered risk classification structure related with to software acquisition. The proposal of a risk taxonomy of software acquisition is motivated by the importance that risks identification activity has and the contribution that a risk taxonomy gives to this activity, because it is known as a technique for effective risks identification, which it’s possible to develop a better risk management starting from a better identification of them. This paper includes both the method to construct the taxonomy (called MECT) and the proposed risk taxonomy of software acquisition that was developed.

In recent years, the software outsourcing (SO) strategy for organizations has become a useful and important alternative, as well as SO projects. SO projects have many complexities due to several factors affecting management. These complexities and importance of SO require that successfull projects meet a parameter set: budget, cost, schedule, among others. This requirement can be met through the implementation of methods and techniques of risk management (RM). RM is a process to prevent problems, establish actions to follow, and monitor the project to ensure success. Likewise, it is considered a key process in making decisions about risks. In this paper, we present a proposal for the risks identification related to software outsourcing process. Risk identification is the basic activity on which rests the success of RM process. Our proposal is a risk taxonomy of SO, consisting in a hierarchical classification structure based on the RM of SO projects. The taxonomy was validated in a study case: Project of pre-developed software acquisition. The results have been useful for the organization and for the refinement of the proposal, thanks to lessons learned. [ABSTRACT FROM AUTHOR]

In the spirit of Nonaka and Takeuchi's Socialization, Externalization, Combination and Internalization (SECI) model, this paper explores how to integrate the heterogeneity of managers' attitudes, as a behavioral dimension of tacit knowledge, into risk scoring for software offshoring. We propose a linear mixed model approach to make individual heterogeneity explicit within a conjoint analysis experimental framework. The model is then estimated using a data set on Japanese software outsourcing. Based on heterogeneity elicitation, an optimist-pessimist categorizing of managerial attitudes towards risk reveals the drivers of such heterogeneity. We find that experience and the criteria used for selecting vendors are the key drivers. Our behavioral risk scoring, incorporating the attitude heterogeneity, outperforms the ordinary least square (OLS) estimate in risk prediction and yields real benefits in terms of risk reduction, forgone benefits saving and profits improving. Copyright © 2011 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Abstract: In order to realize a change from manual workshop model development to engineering and scaling-up model development, a software outsourcing company needs a platform to complete the whole process for software development such as requirements analysis, general design, detailed design, coding, test and project management etc. as well as to realize the share of information among clients, developers, testers, managers to improve the development efficiency and quality. The automatic generation of software outsourcing design specification based on .NET is a very important part for this platform. And the realization of automatic generation of detailed design specification for software outsourcing project will improve the efficiency to compile the detailed design specification as well to standardize the compilation. [Copyright &y& Elsevier]

Small- and medium-sized enterprises (SMEs) are facing great challenges in their information systems (IS) outsourcing relationship management, especially with customized software outsourcing under conditions of technological uncertainty and transaction-specific investments. The problem may be even critical for Chinese SMEs in emerging economies characterized by institutional instability. This article draws on multiple theories to examine antecedents and consequences of the effectiveness of three important interorganizational governance mechanisms, namely, contractual-based and relational-based governance and vendor-specific investments. The results of a survey on 83 software outsourcing projects indicate some interesting patterns that Chinese SMEs use to manage their outsourcing relationships. We found that contractual governance is found to be the only effective mechanism when the outsourcing firm (client) perceives technological uncertainty. On the other hand, with the transaction-specific investments, relational governance, and reciprocal-specific investments by IS vendor would be preferred as effective mechanisms by the outsourcing firm. Our analyses also show that Chinese SMEs in emerging economies would rely on multiple governance mechanisms to enhance outsourcing success. Overall, the findings are in line with the studies stressing the importance of building partnership-style relationships and seeking reciprocal actions in sourcing exchanges. [ABSTRACT FROM PUBLISHER]

Abstract: Experts’ perception of risk plays a more and more important role in software offshore outsourcing risk management. However, individual heterogeneity among experts in risk perception remains unexplored in the literature. This paper, for the first time, proposes a linear mixed model (LMM) approach to make individual heterogeneity explicit within the conjoint analysis experimental framework. The proposed model is estimated using an established dataset on Japanese software outsourcing risk perceiving, and the estimation results show that individual heterogeneity does exist. It is also revealed that requirement volatility is put to the highest priority in making software outsourcing decisions in Japan. We further apply the proposed model to test whether vendor country and software type preference exist in Japan’s software offshoring. We find that Japan’s seasoned managers hold quite neutral attitude toward both aspects. [ABSTRACT FROM AUTHOR]

Past research has studied how the selection and use of control portfolios in software projects is based on environmental and task characteristics. However, little research has examined the consequences of control mode choices on project performance. This paper reports on a study that addresses this issue in the context of outsourced software projects. In addition, we propose that boundary-spanning activities between the vendor and the client enable knowledge sharing across organizational and knowledge domain boundaries. This is expected to lead to facilitation of control through specific incentives and performance norms that are suited to client needs as well as the vendor context. Therefore, we argue that boundary spanning between the vendor and client moderates the relationship between formal controls instituted by the vendor on the development team and project performance. We also hypothesize the effect of collaboration as a clan control on project performance. We examine project performance in terms of software quality and project efficiency. The research model is empirically tested in the Indian software industry setting on a sample of 96 projects. The results suggest that formal and informal control modes have a significant impact on software project outcomes, but need to be finely tuned and directed toward appropriate objectives. In addition, boundary-spanning activities significantly improve the effectiveness of formal controls. Finally, we find that collaborative culture has provided mixed benefits by enhancing quality but reducing efficiency. [ABSTRACT FROM AUTHOR]

In this paper, a study of software engineering standards and models to determine similarities between them has been carried out, from the viewpoint of risk management process in the field of software outsourcing. To select and review these standards and models, MSSS model was used, which was developed from a thorough analysis of different mapping standards and models, leading a series of steps or guidelines to help formalize and organize the study. Besides determining similarities, this research makes a comparison of each standard and model, prior selection and classification of them, according to the area it focuses. [ABSTRACT FROM AUTHOR]

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. [ABSTRACT FROM AUTHOR]

Prior research has indicated that, on average, offshore vendors have higher profits associated with time and materials (T&M) contracts than fixed price (FP) contracts. This research raises two questions. First, Is the relative importance of various profit drivers different across two contractual regimes? Second, Does it follow that vendors unconditionally prefer T&M contracts for all projects? We address these questions by using data on 93 offshore projects completed by a leading Indian vendor. We use an endogenous switching regression framework and the program evaluation methodology to show that profit equations are distinctly different for the two contractual regimes. Using these two profit equations, we also identify contingencies under which the vendor prefers an FP contract to a T&M contract. We hypothesize that the vendor's ability leverage information asymmetry about capabilities and experiences translates into the vendor preferring FP contract to secure larger information rents. Our results support this hypothesis and suggest that the vendor would prefer the FP contract for larger and longer projects with larger teams. However, vendors would prefer a T&M contract when the risk of employee attrition from the project team is high. In addition, we discuss managerial implications of these results in the paper. [ABSTRACT FROM AUTHOR]

Most studies of software outsourcing focus on how to manage outsourcing from the perspective of the outsourcer. There are few studies of outsourcing presented from the viewpoint of the supplier. Given that more and more Chinese software companies are getting software outsourcing subcontracts from all over the world, it is important to understand how software outsourcing projects are actually performed in China, and to identify ways in which performance might be improved. Our study first collected data through a questionnaire-based survey from 53 finished projects in 41 Chinese software suppliers. A follow-up study was performed by telephone interviews with 11 participants, to find explanations for phenomena revealed by the preceding survey. The results show that: (a) differences in natural languages are not a real obstacle for Chinese software suppliers; (b) e-mail is most used to discuss issues related to development, while face-to-face meetings are mainly used to discuss issues related to management and requirements; and (c) the two main reasons for overtime work at the Chinese suppliers are changes to the design or requirements that are proposed by the outsourcers and the suppliers' initial underestimation of the effort required. Copyright © 2008 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Abstract: Software maintenance outsourcing is becoming a popular alternative in software industry. Software companies are looking at outsourcing their maintenance and support activities as an area for competitive advantage. There are risks and benefits of introducing subcontractors in the framework of software outsourcing. Reliable maintenance is only possible if adequate measures are taken in advance during project’s development and maintenance planning phase and are documented in the maintenance contract. In this paper, we present and make a justification for a set of recommendations to make such maintenance reliable and cost-effective. We analyze the associated risks and propose some product quality metrics to be monitored during the maintenance phase. [Copyright &y& Elsevier]

Outsourcing software development has many advantages as well as inevitable risks. Of these risks, outsourcee selection is one of the most important. A wrong outsourcee selection may have severe adverse influence on the expected outcome of the project. We analyzed the risks involved in outsourcee selection and also provided methods to identify these risks. Using the principles of Analytical Hierarchy Process (AHP) and Cluster Analysis based on Group Decision Making, we established an index evaluation system to evaluate and select outsourcees. Real world applications of this system demonstrated its effectiveness in evaluating and selecting qualified outsourcees. [ABSTRACT FROM AUTHOR]

In this paper, we present an empirical investigation of difficulties in offshore software outsourcing relationships. We undertake an investigation of eighteen high maturity software vendor companies based in India. An analysis of the literature suggests that the difficulties in offshore outsourcing relationships have been relatively unexplored. Therefore a detailed investigation of the difficulties in commercial offshore software outsourcing relationships is presented. We use the multiple case study research methodology in this study. We collect qualitative data through the standardized open-ended interviews and analyze it through a grounded theory approach. Results of this study indicate that outsourcing vendors are aware of potential difficulties that could be faced by both vendors and clients in offshore software outsourcing. The main offshore software outsourcing difficulties uncovered by this investigation include cultural differences, expectation mismatch, language differences, loss of control, job loss and transition. We also propose provisional solutions to the emergent difficulties identified in this study. [ABSTRACT FROM AUTHOR]