Software development methodologies are used by many companies to add structure to the development process and improve the predictability of software quality. Many methodologies have been developed and promoted, with no consensus on what type of methodology is "best." This research looks at the factors influencing an organization's decision to adopt, discontinue, change, or not adopt a system development methodology, and the impact of these decisions on the market value of the company.
The five research questions addressed by this study investigate: (1) the identification of factors influencing the adoption/discontinuation/change/non-adoption of software development methodologies, (2) whether the Technology Acceptance Model explains methodology usage by an organization, (3) identification of factors influencing the process of migration from one methodology to another, (4) the complexity of the process for migrating from one software development methodology to another, and (5) whether there is a significant difference in resulting short-term and long-term profitability when companies announce changes in development methodologies.
To identify and assess trends in methodology adoption from both historical and current perspectives, the research methodology consisted of a three components. First, an extended literature review was done to identify historical trends in methodology usage. One trend that appears is that the use of in-house methodologies seems to be increasing. The second component assessed current methodology usage and attitudes by surveying IT managers in publicly traded software development companies. Results indicate that while most companies reported using a methodology, the type of customer for which the company develops software is an important indicator of whether a company chooses to use a system development methodology. Reasons for methodology selection are complex. The third component analyzed stock prices for the publicly traded companies. While the industry as a whole is performing very well, there are differences based on SIC code classifications. Findings from this study allow us to extend what is known about methodology adoption, how organizations decide to change methodologies, and how those decisions affect the company's overall performance.