Managing Risk Areas in Software Development Offshoring: A CMMI Level 5 Case

Software companies are increasingly offshoring development to countries with high expertise at lower cost. Offshoring involves particular risk areas that if ignored increase the likelihood of failure. However, the offshoring client’s maturity level may influence the management of these risk areas. Against this backdrop, we present an interpretive case study of how managers perceive and mitigate the risk areas in software development offshoring with a mature CMMI level 5 (Capability Maturity Model, Integrated) software company as the client. We find that managers perceive and mitigate most of the offshoring risk areas in accordance with the findings of previous research. However, the risk area of task distribution is a notable exception. In this case, managers perceive high task uncertainty, equivocality, and coupling across sites as risk mitigation rather than risk taking. The paper discusses how and why managers perceive and mitigate the risk areas in this way and the implications for theory and practice in software development offshoring.