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Communications of the Association for Information Systems

Abstract

Despite the theoretical benefits of software component reuse (and the abundance of component-based software development on the vendor side), the adoption of component reuse strategies at the organizational level (on the client side) remains low in practice. According to research, the main barrier to advancing component-based reuse strategies into a robust industrial process is coordination failures between software producers and their customers, which result in high acquisition costs for customers. We introduce a component reuse licensing model and combine it with a dynamic price discovery mechanism to better coordinate producers’ capabilities and customer needs. Using an economic experiment with 28 IT professionals, we investigate the extent to which organizations may be able to leverage component reuse for performance improvements. Our findings suggest that implementing component reuse can assist organizations in addressing the issue of coordination failure with software producers while also lowering acquisition costs. We argue that similar designs can be deployed in practice and deliver benefits to software development in organizations and the software industry.

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