A Model of Client and Vendor Interaction in Extreme Programming

Literature in software engineering has modeled coordination in software development as a process where individual efforts of team members need to be coordinated. While this is true of traditional software projects, extreme programming (XP) introduces a different context to the coordination problem. Compared to traditional programming practices, XP calls for intense participation by the software users (which we refer to as the client) in requirement gathering and development; at the same time extreme programming involves test driven development that calls for greater amount of initial testing by the developer (which we refer to as the vendor). The central coordination problem in extreme programming projects therefore is that the vendor and client have to coordinate their efforts to maximize efficiency. In this paper we explore the trade-offs in coordination by outlining a model that considers client participation and initial testing by the vendor. We outline predictions for two different scenarios: a) the client and vendor myopically optimize their individual surplus, b) the client and vendor optimize joint surplus. In the former case, testing by the vendor is increasing with client participation while in the latter case, participation by the client and initial testing by the vendor appear to be substitutes. Several analytical and numerical results are provided to study the important managerial implications