Using Property Rights Theory to Overcome Success Barriers to Software Development Project: Protection of Contractors’ Knowledge

Cornelia Gaebert

2015

Abstract

A fundamental tenet of the information systems discipline holds that: (a) changing requirements in software development projects (SDP) are the main reason for failure; (b) therefore, in case of such uncertainties, fixedprice contracts (FPC) are not suitable for success. Our research, informed by economic theories, compellingly illustrates that among other things changing requirements stems from missing protection on knowledge. In this paper, we present an analysis of knowledge difficult to protect. Both parties must share knowledge during the specification of requirements. However, this business knowledge is an essential intellectual property, and thus needs protection for misuse. We enact a strategy to achieve SDPs success despite these barriers. Our theoretical and empirical analysis also found that SDP success is largely an uncertainty problem between the contractors on the management level, and thus technical-organizational approaches alone are inadequate for achieving success. Based on property rights theory, we introduce two models for protecting knowledge depending on uncertainties. Our findings offer managers important insights into how they can design and enact FPC for effectively manage SDPs. Further, we show how the economic theories can enhance understanding of SDP dynamics and advance the development of a theory of effective control of SDP success.

References

  1. Ackoff, R.L. 1989. From data to wisdom. Journal of Applied Systems Analysis 16, pp. 3-9.
  2. Al-Ahmad, W., Al-Fagih, K., Khanfar, K., Alsamara, K., Abuleil, S., Abu-Salem, H. 2009. A Taxonomy of an IT Project Failure: Root Causes. International Management Review 5(1), 93-104.
  3. Aubert, B.A., Patry, M. and Rivard, S. 2003. A tale of two outsourcing contracts. An agency-theoretical perspective. Wirtschaftsinformatik 45, 181-190.
  4. Badenfelt, U. 2011. Fixing the contract after the contract is fixed: A study of incomplete contracts in IT and construction projects. International Journal of Project Management, 29, 568-576.
  5. Barzel, Y. 1997. Economic Analysis of Property Rights. Cambridge University Press.
  6. Benaroch, M., Lichtenstein, Y., Wyss, S. 2012. Contract Design Choices in IT Outsourcing: New Lessons from Software Development Outsourcing Contracts (April 20, 2012). Available at SSRN: http://ssrn.com/abstract=2137174 or http://dx.doi.org/10.2139/ssrn.2137174.
  7. Beulen, E. and Ribbers, P. 2003. IT Outsourcing Contracts: Practical Implications of the Incomplete Contract Theory. Proceedings of the 36th HICSS.
  8. Bogers, M. 2011. The Open Innovation Paradox. Knowledge Sharing and Protection in R&D Collaborations. European Journal of Innovation Management 14(1), pp. 93-117.
  9. Choo, C.W. 1996. The Knowing Organization: How Organizations Use Information to Construct Meaning, Create Knowledge and Make Decisions. International Journal of Information Management 16(5), pp. 329- 340.
  10. Chen, Y., Bharadwaj, A. 2009. An Empirical Analysis of Contract Structures in IT Outsourcing. Information System Research 20(4), 484-506.
  11. Chua, C. E. H., Lim, W. K., Soh, C., Sia, S. K. 2012. Client strategies in vendor transition: A threat balancing perspective. The Journal of Strategic Information Systems, 21(1), 72-83.
  12. Clark, A., Chalmers, D. 1998. The extended mind. analysis, pp. 7-19.
  13. Cole, D. H.; Grossman, P. Z. 2002. The Meaning of Property Rights: Law versus Economics? Land Economics 78(3), pp. 317-330.
  14. Craswell, R. 2006. Taking Information Seriously: Misrepresentation and Nondisclosure in Contract Law and Elsewhere. Virginia Law Review, pp. 565-632.
  15. Dey. D., Fan M., Zhang, c. 2010. Design and Analysis of Contracts for Software Outsourcing. Information Systems Research 21(1), 93-114.
  16. Dijkstra, E.,W. 1972. The Humble Programmer. Association for Computing Machinery 15(10), pp. 859- 866.
  17. Dwivedi, Y.K., Ravichandran, K., Williams, M.D., Miller, S., Lal,B., Antony, V., Muktha, K. 2013. IS/IT Project Failures: A Review of the Extant Literature for Deriving a Taxonomy of Failure Factors. IFIP Advances in Information and Communication Technology (402), pp. 73-88.
  18. Ebers, M., Semrau, T. 2015. What drives the allocation of specific investments between buyer and supplier?. Journal of Business Research, 68(2), 415-424.
  19. El Emam, K., Koru, A. G. 2008. A Replicated Survey of IT Software Project Failures. IEEE Software 25(5), pp. 84-90.
  20. Friesike, S. 2011. Profiting from Innovation by Managing Intellectual Property. Doctoral Dissertation, University of St. Gallen.
  21. Fink, L., Lichtenstein, Y. 2014. Why Project Size Matters for Contract Choice in Software Development Outsourcing. The DATA BASE for Advances in Information Systems, 45(3).
  22. Gassmann, O., Kausch, C., & Ellen, E. 2010. Negative side effects of customer integration. International Journal of Technology Management, 50(1), pp. 43-63.
  23. Gläser, J. and Laudel, G. 2010. Experteninterviews und qualitative Inhaltsanalyse. VS Verlag, Wiesbaden, , 4nd edition.
  24. Glinz, M. 2007. On non-functional requirements. In Requirements Engineering Conference 2007. pp. 21- 26.
  25. Hart, O., Moore, J. 1990. Property Rights and the nature of the Firm. Journal of Political Economy 98(6), pp. 1119- 1158.
  26. IEEE 1998. IEEE Recommended Practice for Software Requirements Specifications. Institute of Electrical and Electronics Engineers.
  27. Klammer, B. 2005. Empirische Sozialforschung. Eine Einführung für Kommunikationswissenschaftler und Journalisten. Utb, Konstanz.
  28. Krogh, G.v. 2012. How does social software change knowledge management? Toward a strategic agenda. Journal of Strategic Information Systems 21, pp. 154- 164.
  29. Lichtenstein, Y. 2004. Puzzles in software development contracting. Communications of the ACM, 47(2), 61-65.
  30. Liebeskind, J. P. 1996. Knowledge, strategy, and the theory of the firm. Strategic management Journal 17 (S2), pp. 93-107.
  31. Mayer, H., 2012. Interview und schriftliche Befragung.Entwicklung, Durchführung und Auswertung.Oldenbourg Wissenschaftsverlag, München.
  32. Myers, M. D. and Newman, M. 2007. The qualitative interview in IS research: Examining the craft. Information and Organization 17(1), 2-26.
  33. Norman, P. M. 2001. Are your secrets safe? Knowledge protection in strategic alliances. Business Horizons, 44(6), pp. 51-60.
  34. North, D. C. 1993. Institutions and credible commitment. Journal of Institutional and Theoretical Economics (JITE)/Zeitschrift für die gesamte Staatswissenschaft, 11-23.
  35. Osei Bryson, K. M., Ngwenyama, O. 2011. Using decision tree modelling to support Peircian abduction in IS research: a systematic approach for generating and evaluating hypotheses for systematic theory development. Information Systems Journal, 21(5), pp. 407-440.
  36. Paasi, J., Luoma, T., Valkokari, K., & Lee, N. 2010. Knowledge and intellectual property management in customer-supplier relationships. International Journal of Innovation Management, 14(04), pp. 629-654.
  37. Pohl, K. 2013. The three dimensions of requirements engineering. In Seminal Contributions to Information Systems Engineering pp. 63-80.
  38. Rowley, J. 2007. The wisdom hierarchy: representations of the DIKW hierarchy. Journal of Information Science 33(2), pp. 163-180.
  39. Schnell, R., Hill, P. and Esser, E. 2011. Methoden der Sozialforschung. Oldenbourg Wissenschaftsverlag, München, 9nd edition.
  40. Schurz, G. (2008). Patterns of abduction. Synthese, 164(2), pp. 201-234.
  41. Standish Group 2010. CHAOS MANIFESTO, The Laws of Chaos and the CHAOS 100 Best PM Practices The Standish Group International.
  42. Swigon, M. 2013. Personal knowledge and information management - conception and exemplification. Journal of Information Science 39(6), pp. 832-845.
  43. Teece, D. J. 2000. Strategies for managing knowledge assets: the role of firm structure and industrial context. Long range planning, 33(1), pp. 35-54.
  44. Tiwana, A. 2004. Beyond the black box: knowledge overlaps in software outsourcing. Software, IEEE, 21(5), pp. 51-58.
  45. Walton, D. 2014. Abductive reasoning. University of Alabama Press.
  46. Wiegers, K., Beatty, J. 2013. Software Requirements. Pearson Education.
  47. Williamson, O. E. 1983. Credible commitments: Using hostages to support exchange. The American Economic Review, 519-540.
  48. Williamson, O.E. 1985. The Economic Institutions of Capitalism. Firms, Markets, Relational Contracting. New York, (1985).
  49. Zeleny, M. 1987. Management support systems: towards integrated knowledge management. Human Systems management 7(1), pp.59-70.
Download


Paper Citation


in Harvard Style

Gaebert C. (2015). Using Property Rights Theory to Overcome Success Barriers to Software Development Project: Protection of Contractors’ Knowledge . In Proceedings of the 10th International Conference on Software Engineering and Applications - Volume 1: ICSOFT-EA, (ICSOFT 2015) ISBN 978-989-758-114-4, pages 119-130. DOI: 10.5220/0005516001190130


in Bibtex Style

@conference{icsoft-ea15,
author={Cornelia Gaebert},
title={Using Property Rights Theory to Overcome Success Barriers to Software Development Project: Protection of Contractors’ Knowledge},
booktitle={Proceedings of the 10th International Conference on Software Engineering and Applications - Volume 1: ICSOFT-EA, (ICSOFT 2015)},
year={2015},
pages={119-130},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0005516001190130},
isbn={978-989-758-114-4},
}


in EndNote Style

TY - CONF
JO - Proceedings of the 10th International Conference on Software Engineering and Applications - Volume 1: ICSOFT-EA, (ICSOFT 2015)
TI - Using Property Rights Theory to Overcome Success Barriers to Software Development Project: Protection of Contractors’ Knowledge
SN - 978-989-758-114-4
AU - Gaebert C.
PY - 2015
SP - 119
EP - 130
DO - 10.5220/0005516001190130