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Reliable Customers and Credible Fixed-Price Contracts for Software Development Projects: A Study of One Supplier’s Contracts

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Perspectives in Business Informatics Research (BIR 2015)

Part of the book series: Lecture Notes in Business Information Processing ((LNBIP,volume 229))

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Abstract

A fundamental tenet of the information systems discipline holds that changing requirements in software development projects (SDP) are the main reason for failure; therefore, in case of such uncertainties, fixed-price contracts (FPC) are not suitable for success. Our empirical research, informed by economic theories, compellingly illustrates that the FPC is an appropriate contractual form. However, we claim that there is a need to optimize its use. With this paper, we show that reliable customers allow credible FPCs enhancing project success, whereas sophisticated contract provisions do not have this effect. Customer reliability reflects whether the customer uses stable methods and regulations for information processing regarding goal definition, belief generation, and decision-making. Our findings offer managers important insights into how they can design and enact FPCs to manage SDPs successfully. Further, we show how economic theories can enhance understanding of SDP success.

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Authors and Affiliations

  1. Research Group on Strategic Information Management, European Research Center for Information Systems, C/O University of Muenster, Leonardo Campus 11, 48149, Muenster, Germany

    Cornelia Gaebert

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  1. Cornelia Gaebert
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Correspondence to Cornelia Gaebert .

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Editors and Affiliations

  1. University of Tartu, Tartu, Estonia

    Raimundas Matulevičius

  2. University of Tartu, Tartu, Estonia

    Marlon Dumas

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Gaebert, C. (2015). Reliable Customers and Credible Fixed-Price Contracts for Software Development Projects: A Study of One Supplier’s Contracts. In: Matulevičius, R., Dumas, M. (eds) Perspectives in Business Informatics Research. BIR 2015. Lecture Notes in Business Information Processing, vol 229. Springer, Cham. https://doi.org/10.1007/978-3-319-21915-8_2

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  • DOI: https://doi.org/10.1007/978-3-319-21915-8_2

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-319-21914-1

  • Online ISBN: 978-3-319-21915-8

  • eBook Packages: Computer ScienceComputer Science (R0)

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