As firms increasingly rely on information systems to perform critical functions, the consequences of software defects can be catastrophic. Although the software engineering literature suggests that software process improvement can help to reduce software defects, the actual evidence is equivocal. For example, improved development processes may only remove the “easier” syntactical defects, while the more critical defects remain. Rigorous empirical analyses of these relationships have been very difficult to conduct due to the difficulties in collecting the appropriate data on real systems from industrial organizations. This field study analyzes a detailed data set consisting of 7,545 software defects that were collected on software projects completed at a major software firm. Our analyses reveal that higher levels of software process improvement significantly reduce the likelihood of high severity defects. In addition, we find that higher levels of process improvement are even more beneficial in reducing severe defects when the system developed is large or complex, but are less beneficial in development when requirements are ambiguous, unclear, or incomplete. Our findings reveal the benefits and limitations of software process improvement for the removal of severe defects and suggest where investments in improving development processes may have their greatest effects.

As excessive budget and schedule compression becomes the norm in today's software industry, an understanding of its impact on software development performance is crucial for effective management strategies. Previous software engineering research has implied a nonlinear impact of schedule pressure on software development outcomes. Borrowing insights from organizational studies, we formalize the effects of budget and schedule pressure on software cycle time and effort as U-shaped functions. The research models were empirically tested with data from a 25 billion/year international technology firm, where estimation bias is consciously minimized and potential confounding variables are properly tracked. We found that controlling for software process, size, complexity, and conformance quality, budget pressure, a less researched construct, has significant U-shaped relationships with development cycle time and development effort. On the other hand, contrary to our prediction, schedule pressure did not display significant nonlinear impact on development outcomes. A further exploration of the sampled projects revealed that the involvement of clients in the software development might have “eroded” the potential benefits of schedule pressure. This study indicates the importance of budget pressure in software development. Meanwhile, it implies that achieving the potential positive effect of schedule pressure requires cooperation between clients and software development teams.