Controlling Technical Debt Remediation In Outsourced Enterprise Systems Maintenance: An Empirical Analysis

Technical debt refers to maintenance obligations that stem from violations of established standards during the development and subsequent maintenance of enterprise systems. Technical debt remediation is particularly challenging in the outsourcing context due to information asymmetry between client and vendor teams. Control balancing-the periodic adjustments to the control configurations of outsourced projects-has been proposed as a process to help mitigate these information asymmetry challenges. Using data collected from 1,824 real-world projects, we tested to what extent control balancing improves the remediation of technical debt. After controlling for a number of technical and environmental factors, including system size, system lifespan, and contract parameters, we find that control balancing can benefit technical debt remediation, but primarily when processes for migrating technical debt-laden systems to new technological platforms have been identified. We highlight the role of technical debt in influencing the effects of relational flexibility in inter-firm engagements.