transaction cost theory - request for participation in research
DESCRIPTION
Software vendors often use components of external vendors or open source communities. One way to see how to govern these relationships is by looking at Transaction Cost Economics. In order to help me operationalize Transaction Cost Economics for software vendors I am looking for product software managers that want to participate in my research.TRANSCRIPT
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Transaction Cost Economics in Software
Ecosystems
Wilco van Duinkerken - Utrecht [email protected] - June 19th 2009
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Did you ever ask yourself one of the following questions?
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Should I write a software component myself or buy/use it
from somebody else?
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I’m using an open source component,
when do I start contributing?
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What are the “hidden” costs of using external
components?
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How can I limit the costs and risks of using external components?
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How to govern the relationships with my component providers?
m-w: gov·ern (\ˈgə-vərn\) : a) to control, direct, or strongly influence the actions and conduct of b) to exert a determining or guiding influence in or over <income must govern expenditure> c) to hold in check : restrain
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Transaction Cost Economics• Initiated by Coase, 1937
• Defined by Williamson, 1971 and going strong
• Researched in the fields of a.o. Human Assets, Procurement, Oil & Gas, Electricity, Music Industry and Outsourcing
• Little empirical research of TCE in IT
• No proof (yet) of TCE in the product software industry
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• You can do/ produce something internally (yourself) or buy it from the market
• One can buy “from the market” using different governance modes
• The governance modes differ in the amount of control, flexibility and costs
The Basics
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Governance modes• Markets
• Hierarchies
• Short term contract
• Long term contract
• Service Level Agreements
• Open Source License
• Open Source Contribution
• Alliance
• Joint Venture
• Master Service Agreement (Raamwerkovereenkomst)
• SaaS (webservice)
• Partial Ownership (buy shares)
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The governance modes differ in the amount of control, flexibility and
costs
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A governance mode is chosen based on transaction costs
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Transaction Costs
• Are determined by three factors
• Asset Specificity: How specific (and important) is the product or service you are buying.
• Recurrence: How often does the transaction occur.
• Uncertainty: Internal, external and behavioral uncertainty.
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Recurrence
Market Coordination
Hierarchy Coordination
Asset Specificity
Low High
Un
ce
r-ta
inty
Low
High
Classical Contract(non-collaborating)
Neo-classical Contract (Collaborating)
Relational contractinternal
governance
occasional recurrent
Governance mode determination by transaction costs
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I want to answer the question:
• Can Transaction Cost Economics be applied to explain the governance structure of relationships between buyers and suppliers of software components in Software Ecosystems?
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I would like to:
1. Have a group discussion about:What are transaction costs of software components?
2. Have individual interviews on:How do you choose which component to use? and How to govern the relationship with the supplier of this component?
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Planning• Group Discussion:
• when: The first week of July (date to be set)
• where: Utrecht University (Beleidslab)
• how long will it take me? ± 90 minutes
• Individual interviews:
• when: Somewhere in July
• where: Anywhere
• how long will it take me? ± 60 minutes
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Can I Participate in Both the group and Individual sessions?
Yes, you can :-)
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What’s in it for me?1. You will receive a print and/or electronic
version of my thesis.
2. You will gain some insight in your company relations and possible ways of improving these relations.
3. I’m willing to give a presentation about the subject at your company when my thesis is finished.
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Want to participate?
• Please contact me:
• E-mail: [email protected]
• Twitter: @sparkboxx
• LinkedIn: http://www.linkedin.com/in/wilcovd
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More sources
• Download my thesis so far
• View a summary of my thesis research at http://prezi.com/90808/