Reasons for Success and Failure in Offshore Software Development Projects

This paper describes an in depth analysis of successful and unsuccessful offshore custom software development (CSD) projects. Offshore projects tend to be unsuccessful, because physical, time, cultural, organizational, and stakeholder distances negatively influence communication and knowledge exchange between onshore and offshore project team members. The success rate of 19 offshore CSD projects was characterized with regard to scope, quality, time, and costs, by interviewing onshore and offshore project managers. Unsuccessful projects had a complex organization and had team members who did not work together in previous projects. All reasons for success and failure were categorized and compared. A characteristic that successful projects had in common was the availability of informal mutual adjustment, which means facilitating the informal communication between the team members in the right way. A major characteristic that unsuccessful projects had in common was improper planning, which has a large influence on the team results in an offshore CSD project. The implementation of standards was neither mentioned by the successful projects as a major reason for success, nor by the unsuccessful projects as a major reason for failure. The paper advises that in order to be successful, a project manager of a new offshore CSD project should not spend too much attention to standards, but to planning and informal mutual adjustment.