Distributed Agile Outsourcing. An Overview of Methods and Success Factors

Term Paper (Advanced seminar), 2017
21 Pages, Grade: 1,0



1. Introduction

2. Theoretical Background
2.1 Related Work
2.2 AGOSD – A symbiosis of ITO and ASD

3. Research Method
3.1 Data Collection
3.2 Data Analysis

4. Results
4.1 AGOSD communication practices for large IT projects in the literature
4.2 Overview of AGOSD communication practices in large projects
4.3 Practical relevance of dedicated AGOSD communication practices in large projects
4.3.1. Category 1: Frequent Visits.
4.3.2 Category 2: Multiple Communication Modes.
4.3.3 Category 3: Mirroring / Balances Sites.
4.3.4 Category 4: Ambassador / Rotating Guru.
4.3.5 Category 5: Synchronization of Work Hours.

5. Discussion
5.1 Summary of Findings and Implications
5.2 Limitation and Future Research

6. Conclusion

7. References


IT outsourcing (ITO) engagements have become one of the prevailing IT strategies. Moreover, agile software development (ASD) approaches tend to replace traditional, sequential methods. Injecting ASD into ITO leads to agile global or distributed outsourced development (AGOSD/ADOSD) projects characterized by using agile methods within distributed environments rising the challenge of facilitating coordination and collaboration between teams. Especially, communication between client and external vendor became one of the major critical success factors. Consequently, my study examines communication practices within global IT projects. (1) I conducted a structured literature review to extend the list of communication practices provided by prior studies. (2) I consolidated and categorized them. (3) By having performed expert interviews, I deployed a ranking pointing out their practical relevance.

1. Introduction

Within the past ten years, the question about “make or buy” has a recognizable trend on the buy-side in the Information Technology (IT) sector, since organizations increasingly spend funds on Information Technology Outsourcing (ITO) projects [11]. According to conservative estimates, in 2010, the amount for expenses in global ITO exceeded 270$ billion underlying the fact that the introductory question is permanently on the agenda of management decisions [27]. In global outsourced software development projects, stakeholders from various time zones, organizational and national cultures are involved in the process [4]. Tasks at different stages of the software lifecycle can be segregated and implemented at multiple geographies coordinated by applying communication and information technologies [18]. ITO comprises business benefits such as the proximity to market, the utilization of market opportunities quickly building cross-national, virtual teams and the possibility to work in different time zones. Hence, it enables the development of software “round-the-clock” [28, 25, 18].

In parallel to the rise of ITO, agile software development (ASD) methods revealed a success-promising approach for organizations [10] since it addresses the key problems in traditional software development, such as too long development cycles, high costs and the product’s defectiveness [1, 13, 4]. Instead, it enables simplicity and speed, puts focus on individuals, customer collaboration, interactions and quick response to changes [8, 6]. Furthermore, according to the Standish Group 2015 Chaos Report [7], 39% of 50.000 software development projects measured between 2011 and 2015, applying agile methods, were successful. In contrast, 11% projects with a waterfall development environment succeeded. Looking at the size of the projects, from tiny enhancements until big re-engineering implementations, only 3% of the large projects using a waterfall model achieved their goal, whereas 19% following an agile approach were favorable [7].

Combining ITO and ASD leads to the term “agile global outsourced software development” (AGOSD) and “agile distributed outsourced software development” (ADOSD), which are considered as synonyms. The core of AGOSD projects is, that client organizations outsource software development projects to external vendors, near- and offshore [22]. The vendors apply agile development methods such as Scrum or Exreme Programming (XP) within virtual teams. Teams usually consist of members from all around the world working together on that project [24, 25]. Dreesen et. al [5] and Schmidt and Meures [20] have already coped with AGOSD by identifying communication practices and empirically examined them. Schmidt and Meures [20] ranked them concerning their practical relevance by conducting a survey and questionnaire. Yet, there are no reasons available why a communication practice got this rank. So deeper knowledge about its practical meaning is missing. Hence, I define the following research question, guiding my research endeavor: “How important are the current known communication practices in AGOSD with regards to large IT projects, why are these important and which ones are missing?”

The remainder of the paper is structured as follows. The next section provides information on the theoretical background, mainly on the related work this paper is built upon and specifically on the terminology ASD and AGOSD respectively ADOSD. In the third section, I will outline my research design including the research process, data collection and analysis. In the fourth section, I will describe my findings. In the fifth section, I will discuss the research results by giving not only theoretical but also practical implications. Additionally, I will show up the limitations of my research project as well as suggest future research directions to extend our knowledge about AGOSD. Lastly, I will wrap up the paper with a conclusion.

2. Theoretical Background

2.1 Related Work

My research project mainly builds upon the research papers by [5] and [20]. Dreesen et al. [5] performed a structured literature review on both communication practices in ASD and AGOSD. As a result, they identified 42 communication practices within agile projects, 23 of them are dedicated for AGOSD not being applicable for ASD without a further specification.

Schmidt and Meures [20] research consisted of a structured literature review and of the empirical examination of agile communication practices. They made use of interviews to derive new ones and questionnaires to rank them in order to determine their practical relevance. To sum up, they identified 42 communication practices which are congruent with the results from Dreesen et al. [5]. Furthermore, within the scope of the empirical part, they identified 5 additional practices.

With agile development projects being on the rise [19, 24], Passivaara, Durasiewicz and Lassenius [16] developed a framework of supporting practices for global software development comprising five distinct categories. These categories enable to classify the identified communication practices. Taking into account the upcoming challenges from distributed agile development, the first category is frequent visits for generating and fostering trust as well as improving collaboration. The second one is multiple communication modes, describing the parallel application of different communication methods. Third category is mirroring / balanced sites, containing dependency reducing practices. The next category is ambassador / rotating guru, including methods for the implementation of expert roles and the last one is synchronization of work hours, incorporating practices to maximize overlapping work hours.

2.2 AGOSD – A symbiosis of ITO and ASD

The outsourcing of software development is the shift of special services to an external vendor [12, 21]. With Internet-based collaboration services and the increasing engagement with providers located in Latin America, China and India for software development services [12, 3], a huge ration of the outsourced software development projects is furnished by virtual teams [2], where team members are located in different geographies and work together in common manner. On the one hand, this leads to cost reduction potential and smoothens the way for further business opportunities [3, 28]. On the other hand, it generates additional challenges such as adapted control and coordination mechanisms, technology and the integration of people coming from different geographies, cultural backgrounds and working [28, 25].

Agile software development aims to enable faster response times to changing customer requirements as well as an acceleration of development cycles [23] and hence, it follows an iterative approach which is quite the contrary to waterfall or sequential approaches [15]. This leads to continuous communication and interactions between the vendor respectively developer team and the client, so that the client is directly involved in the software development process [23]. In addition, agile processes improve team moral, i. e. it is told what to deliver but not how, overall quality and efficiency, since each iteration (sprint) ends with a testing phase [15]. To a large extent, present-day organizations implement agile development methods in general and especially for global distributed development projects much more frequently [9].

The combination of ITO and ASD results in AGOSD. It has been pointed out, that communication between client and external provider is one of the most critical success factor an AGOSD engagement has to cope with [14, 9, 15].

3. Research Method

3.1 Data Collection

My data collection consisted of three consecutive steps which are depicted in Figure 1:

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Figure 1: Analysis Approach

(1) I conducted a structured literature review on the basis of the recommendation by Webster and Watson [26]. The review started with a keyword search on communication practices within AGOSD projects in particular, followed by a backward and forward search. I defined a search string (table 1) for the keyword search to identify relevant articles in databases (ProQuest, EBSCOhost, INFORMS).

Table 1: Search String

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There was no restriction for the publishing year of the articles. To ensure high quality, I only filtered peer reviewed articles. All search results were examined regarding title, abstract, and keywords. In total, my final set of articles consisted of 23 articles.

(2) I consolidated the results from Dreesen et al. [5] and Schmidt and Meures [20] by matching the found dedicated AGOSD communication practices with the corresponding categories suggested by the framework of Paasivaara, Durasiewicz and Lassenius [17].

(3) Based on step (2), I created an interview guideline. After that, I conducted two expert interviews to gain insights of the importance of communication practices in ADOSD in large IT projects. Table 2 shows an overview of the participants. Both of them have been working or are currently engaged within a distributed agile environment.

Table 2: Overview of participants

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The interviewees allowed to record the interview. I used Skype to process the interview and thus, I could use Callnote, a recording software for online phone calls ensuring high audio quality. Correlating the interview insights to the research question, I made clear in the beginning that they should position themselves in a member within a distributed agile outsourced team developing a large software package such as an enterprise system. For each practice I asked the interviewees how they would rate it on a Likert Scale, i.e. 5 very important and 1 less important. I wrapped up the interview with questions regarding the interviewee’s opinion about distributed agile outsourced software development, if a communication practice is missing and an overall statement, if a pure AGOSD is suitable for large projects.

3.2 Data Analysis

After the data collection phase, I performed a thorough analysis of the gathered data from the literature review, the results of Dreesen et al. [5] and Schmidt and Meures [20] as well as from the interviews.

Since both interview partners agreed about recording them, I transcribed the interviews with Express Scribe. Hence, I was able to provide representative quotes to justify why the interviewee has rated the communication practice with the appropriate number of the Likert Scale. After having transcribed all interviews, I gathered all rates in a table. The implementation of the 5-point Likert Scale enabled me to do a ranking and to identify which communication practice suits best to distributed agile outsourced large projects. If an interviewee mentioned a method or practice which has not been listed in the pool of agile communication practices yet, I added it to the corresponding category and formatted it with an italic style. In this case no ranking was feasible because it is a newly-found practice and I conducted the interviews within a narrow timeframe.

4. Results

4.1 AGOSD communication practices for large IT projects in the literature

After having conduced the structured literature review, to the best of my knowledge and understanding, I could not find any new dedicated communication practice in AGOSD for large IT projects that has not been listed by Dreesen et al. [5] and Schmidt and Meures [20] yet.

4.2 Overview of AGOSD communication practices in large projects

After the data consolidation, I was able to create table 3 showing an overall summary of current, dedicated AGOSD communication practices. For completeness, I also added the newly-found practice derived from the interview analysis for simplified readability and hence, it can fulfill the purpose of a reference manual. I performed a profound analysis of the rank and its justification in the upcoming section by providing representative quotes of the interviewees.

Table 3: Overview of AGOSD communication practices in large IT projects

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Distributed Agile Outsourcing. An Overview of Methods and Success Factors
University of Cologne  (Seminar für Wirtschaftsinformatik und integrierte Informationssysteme)
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distributed, agile, outsourcing, overview, methods, success, factors
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Oliver Götz (Author), 2017, Distributed Agile Outsourcing. An Overview of Methods and Success Factors, Munich, GRIN Verlag, https://www.grin.com/document/355110


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