Portfolios of Control in Outsourced Software Development Projects

Abstract

This paper examines the evolution of portfolio of controls over the duration of outsourced information systems development (ISD) projects. Drawing on five cases, it concludes that many findings from research on control of internal ISD projects apply to the outsourced context as well, but with some interesting differences. The portfolios of control in outsourced projects are dominated by outcome controls, especially at the start of the project; although the precision and frequency of these controls varies across projects. Behavior controls are often added later in the project, as are controls aimed to encourage and enable vendor self–control. Clan controls were used in only two of the cases—when the client and vendor had shared goals, and when frequent interactions led to shared values. In general, the outsourced projects we studied began with relatively simple controls but often required significant additional controls after experiencing performance problems. Factors influencing the choice and evolution of controls are also examined.