Countering Behavioural Risks in Offshore Software Development through Relationship

Mathew, Saji K and Bharadwaj, Anandhi (2008) Countering Behavioural Risks in Offshore Software Development through Relationship. TAPMI, Manipal.

TWP87_08_counter businessRisk_Saji mathew.pdf

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Firm level risks in offshore software development could be broadly classified into ex ante and ex post risks though the former would influence the latter as delayed negative outcomes. Our research focuses on the ex post risks of firms in offshoring of software development. The risks and their drivers have been identified based on established economic and social theories. We identify shirking, service provider lock-in, and loss of control over information assets as the categories of risks ex post. The drivers of shirking risk comprise of perceived effort incentive gap, limited observability and contract inadequacy. Service provider lock-in risk has two major causes: client’s relationship specific investments and scarcity of service providers. In addition to limited observability and contract inadequacy, we identify IP vulnerability and competitors in service provider’s clientele as the sources of risk for loss of control over information assets. Further, we posit that relationship serves as a mitigating dimension for ex post risks. The relationship constructs risks and benefit sharing and client’s experience mitigates the shirking risk, service provider’s dependence mitigates the risk of service provider lock-in, and service provider’s credibility and service provider’s benevolence mitigates loss of control over information assets.

Item Type: TAPMI Working Papers
Uncontrolled Keywords: Offshore software development, risk, mitigation, relationship, outsourcing
Subjects: Management Information Systems
Management Information Systems > System Analysis and Design
Divisions: Operations and Information Science
Depositing User: Ms. Vanitha K
Date Deposited: 15 Nov 2018 06:05
Last Modified: 20 Nov 2018 06:18

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