Page 316 - Global Project Management Handbook

SUCCESS FACTORS IN VIRTUAL GLOBAL SOFTWARE PROJECTS 16-5

As discussed earlier, while SWD projects have similarities with other types of pro-
jects, they also have unique differences. These differences have prompted some experts
to describe SWD projects as unique challenges. In particular, because SWD projects typi-
cally are implemented under severe speed and financial pressures, they tend to expose the
strengths and weaknesses of a company, including its culture, management systems, orga-
nizational structure, and people. Therefore, SWD projects are a comprehensive real-time
test of the whole corporation.

THE NATURE OF VIRTUAL GLOBAL
SOFTWARE DEVELOPMENT

Virtual global software (VGS) development involves development teams across multi-
ple countries collaborating and performing a variety of tasks, such as planning, control-
ling, coding, testing, implementing, and maintaining, in order to develop new software
and achieve common project goals. Recently, many software companies have used
VGS development instead of the usual centralized colocated form of development. U.S.
spending for VGS projects, for example, is projected to grow at a compound annual
rate of almost 26 percent, from approximately $10 billion in 2003 to $31 billion in
2008 (Behravesh, 2004). More than 50 other nations are also presently involved in
VGS development.
Major benefits drive companies to make a transition to VGS development: VGS
helps to reduce project completion time, reduce cost, make better use of scarce
resources, and gain competitive advantage (Gorton and Motwani, 1996; Norbjerg et al.,
1997; Carmel, 1999; Herbsleb & Moitra, 2001). In particular, Carmel (1999) claimed
that the cycle time could be reduced by 20 to 35 percent using the around-the-clock or
follow-the-sun development technique. In addition, King (2003) reported that low-cost
programming development is the most important reason why U.S. organizations out-
source to non-U.S. locations.
Despite a number of challenges (described below), VGS development will remain a
vehicle for many companies to achieving success and will contribute to long-term busi-
ness strategy as being of strategic importance.

WHAT MAKES VIRTUAL GLOBAL SOFTWARE
PROJECTS DIFFERENT

VGS projects are conducted by internationally distributed groups of people—groups that are
culturally diverse, geographically dispersed, and communicating electronically (Kristof et al.,
1995). They have an organizational mandate to make or implement decisions with interna-
tional components and implications (Maznevski and Chudoba, 2000). To execute the man-
date, the teams in charge face projects that, in addition to the characteristics that differentiate
software projects from other types of projects, as discussed earlier, display a new layer of
characteristics that distinguish VGS projects from ones that are colocated. Here we describe
this new layer of characteristics (summarized in Table 16.1), indicating their intermediate
impact on projects. Then we will refer to the critical success factors described later in the text
that reduce the impact of these characteristics. Finally, we will show the impact that the
factors produce (ultimate impact).