Academic journal article JITTA : Journal of Information Technology Theory and Application

Managing Risk Areas in Software Developm Offshoring: A CMMI Level 5 Case

Academic journal article JITTA : Journal of Information Technology Theory and Application

Managing Risk Areas in Software Developm Offshoring: A CMMI Level 5 Case

Article excerpt


Software companies are increasingly offshoring development to countries with high expertise at lower cost. Offshoring involves particular risk areas that, if ignored, increase the likelihood of failure. However, the offshoring client's maturity level may influence the management of these risk areas. Against this backdrop, we present an interpretive case study on how managers perceive and mitigate the risk areas in software development offshoring with a mature capability maturity model integration (CMMI) level 5 software company as the client. We found that managers perceived and mitigated most of the offshoring risk areas in accordance with the findings of previous research. However, the risk area of task distribution was a notable exception. In this case, managers perceived high task uncertainty, equivocality, and coupling across sites as risk mitigation rather than risk taking. The paper discusses how and why managers perceived and mitigated the risk areas in this way and the implications for theory and practice in software development offshoring.

Keywords: Distributed Software Development, Case Study, CMMI, Scrum, Agile Methods, Offshoring, Risk Management, Global Software Engineering.

1 Introduction

Global competition, the need for flexibility, new types of expertise, and cost reduction drive software companies to engage in offshoring (Lacity, Khan, & Willcocks, 2009; Stephan & Silvia, 2008). Successful offshoring requires an organization to effectively manage temporal, geographical, and sociocultural distances (Holmstrom, Conchúir, Agerfalk, & Fitzgerald, 2006) and the many other challenges associated with software development in general. Managers deal with specific offshoring challenges in terms of risk areas in software development offshoring (Iacovou & Nakatsu, 2008; Lamersdorf et al., 2012; Persson & Mathiassen, 2010; Singh & Nigam, 2012). Risk areas represent organizational contexts that include many related risk factors, which together possess a threat to a software development project's success (Boehm, 1991). Persson, Mathiassen, Boeg, Madsen, and Steinson, (2009) argue that eight risk areas are central to managing distributed software development: task distribution, knowledge management, geographical distribution, collaboration structure, cultural distribution, stakeholder relations, communication infrastructure, and technology setup. These risk areas represent the organizational contexts of particular concern to managers of software development offshoring, but, as with any other risks, they are not objective facts (Hansson, 2010). The organizational conceptions of risks derive primarily from what managers consider to be of value both in and for their organizational practice (Corvellec, 2010). What managers consider to be valuable and, thereby, possibly at risk follows from what they consider to be necessary to the success of their managerial practice (Corvellec, 2010).

CMMI and Scrum are prescriptive approaches for successful software development that are highly influential to managerial practice in software companies. CMMI (CMMI Product Team, 2010) includes governing principles and operational elements in a five-level maturity model for software development that range from initial, managed, defined, and quantitatively managed to optimizing at the highest level. Scrum is an iterative and incremental development model where planning is concurrent with the development activities. Studies suggest addressing offshoring risk areas by 1) elevating the organizational maturity of the client in terms of the CMMI (Rottman & Lacity, 2006) and 2) adopting Agile methods such as Scrum (Bannerman et al., 2012). Offshoring managers' perceptions and mitigations of the proposed offshoring risk areas (Persson et al., 2009) follow from what they consider to be necessary to their managerial practice's success. However, little research focuses on how offshoring risk area perception and mitigation follows from managerial practice when the offshoring client is a software company certified at the highest maturity level and also using Scrum. …

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