Controlling Technical Debt Remediation in Outsourced Enterprise Systems Maintenance: An Empirical Analysis

ABSTRACT

Technical debt refers to maintenance obligations that stem from violations of established standards during the development and subsequent maintenance of enterprise systems. Technical debt remediation is particularly challenging in the outsourcing context due to information asymmetry between client and vendor teams. Control balancing—the periodic adjustments to the control configurations of outsourced projects—has been proposed as a process to help mitigate these information asymmetry challenges. Using data collected from 1,824 real-world projects, we tested to what extent control balancing improves the remediation of technical debt. After controlling for a number of technical and environmental factors, including system size, system lifespan, and contract parameters, we find that control balancing can benefit technical debt remediation, but primarily when processes for migrating technical debt-laden systems to new technological platforms have been identified. We highlight the role of technical debt in influencing the effects of relational flexibility in inter-firm engagements.

KEYWORDS:

• Technical debt
• control balancing
• project controls
• software maintenance
• enterprise systems
• IT outsourcing
• software project management

supplementary-material

Supplemental data for this article can be accessed at www.tandfonline.com/mmis.

Notes

1 In an allied area of IS research, scholars have also investigated how end users’ perceived sense of control and control beliefs may impact a variety of outcomes including system adoption and use (e.g., [18]). However, in this current research we focus on information systems controls deployed during system development and maintenance activities.

2 As per the Fama-French industry classification [22], which has been shown to have a high degree of correspondence with two-digit Standard Industry Classification (SIC) and North American Industry Classification Codes (NAICS) codes [3]. Projects related to clients in the health services industry were not represented in our sample.

3 CMMI^® refers to Capability Maturity Model Integration, a set of normative process standard prescriptions that help client firms to measure, benchmark, and improve their performance [14].

4 We illustrate such a change for an example project in our dataset in the Online Supplement (see Figure S2).

5 According to SchÖn [74], designers faced with a situation of complexity have a “reflective conversation with the situation” and proceed through a sequence of “moves” that are experiments that build upon each other. “Each move has consequences described and evaluated in terms drawn from one or more design domains. Each has implications binding on later moves. And each creates new problems to be described and solved.” Designing happens “by spinning out a web of moves, consequences, implications, appreciations, and further moves” [74, p. 94].

6 The process we followed to derive the control balancing measures is summarized in Figure S1 in the Online Supplement.

7 The Project Management Body of Knowledge (PMBOK^®) developed by the Project Management Institute (PMI) is a widely accepted set of guidelines, rules, and best practices for project management. The PMBOK^® family of guides and standards also includes software and agile practices specific extensions that were jointly developed by PMI and the IEEE Computer Society, and PMI and the Agile Alliance.

Additional information

Notes on contributors

Narayan Ramasubbu

Narayan Ramasubbu ([email protected]) is an Associate Professor of Business Administration at the Katz Graduate School of Business at the University of Pittsburgh. He received his Ph.D. degree from the University of Michigan. Prior to his academic career, he was a senior developer of business intelligence applications and a product management specialist, first at CGI Inc. and then at SAP AG. His research interests include software product development and service delivery; information technology-driven innovation; user behavior within digital platforms; and the design, implementation, and governance of enterprise information systems. He serves as an Associate Editor at Management Science and MIS Quarterly.

Chris F. Kemerer

Chris F. Kemerer ([email protected]; corresponding author) is the David M. Roderick Professor of Information Systems at the Katz Graduate School of Business at the University of Pittsburgh. He received his Ph.D. degree from Carnegie Mellon University. Previously, he was an associate professor at MIT. His current research interests include management and measurement issues in information systems and software engineering, and the adoption and diffusion of information technologies. He has served in a number of editorial positions, including as the Editor-in-Chief of Information Systems Research, and Department Editor of Management Science. He is an INFORMS Information Systems Society Distinguished Fellow and an ISI/Thomson Reuters Highly Cited Researcher in Computer Science.