Resumen
Organizations often choose to outsource software development in order to gain expertise and scale unavailable internally. This article presents an analysis of the economic aspects of external software development. Agency theory assumes an uncertain venture owned by a principal and performed by an agent whose actions are not fully observable. Transaction cost economics can be used to analyze the maintenance decision. A customer decision to maintain an in-house system is a "make" decision, while buying maintenance services externally is a "buy" decision. A contract addresses both short and long-term risks. Vendors undertake short-term risk through fixed price and milestones-tied payments. But customers undertake the frill long-term risk, since most maintenance is undertaken on a time and material basis and payments are not tied to long-term effectiveness. Long-term incentives may still exist, since vendors wish to keep their reputation and gain future contracts. However, incentives within each project may be a more efficient way of providing a comprehensive set of incentives.