Project Risk Differences between Virtual and Co-located Teams

Although software development projects increasingly incorporate virtual team members, most research performed on project risk to date was conducted on projects using traditional co-located teams incorporating face-to-face communications. This paper identifies a set of risk factors particularly important to virtual teams but rarely discussed. Results, from a survey of over 150 Information Technology (IT) practitioners, are based on actual project experiences. Out of fifty-five risk factors included in the survey, seven factors showed significant differences in effect on the successful completion of projects based on project environment. Notably, the results showed a significantly greater impact for all seven risk factors in virtual software development environments, when compared to development using traditional face-to-face teams. This increased risk is termed the Magnifier Effect. Anticipating the Magnifier Effect can allow practitioners who are managing projects in a virtual environment to anticipate and mitigate the added risks of using virtual software development teams.