Global software teams have become commonplace in the 1990s as leading software development companies search for ways to cut costs, increase production and produce a better product, says Erran Carmel, associate professor of global information technologies at American University. Included in this push are software companies that are globally outsourcing as well.
The idea of global software teams hasn’t received much attention until recently. Though teams have collaborated for nearly 40 years now, for example IBM has had sites in England and the United States since the 60’s, the biggest bridge to cross in developing international teams was the limited communication technology. “New technology is allowing collaboration like never before and the business forces are pushing software organizations to globalize for other reasons as well,” says Carmel.
Outsourcers are increasingly looking abroad for software development people to fill the incredible demands for products. “All software organizations now have global development organizations that have programmers, engineers, designers and other quality people who are collaborating across international lines to develop software,” says Carmel.
The Search for Global Talent
One reason North American software companies are taking such a serious approach to outsourcing globally, is so they can employ the best talent in the world, says Carmel. In order to do this, software companies often have to work with individual engineers, programmers and designers, or entire software companies that may not necessarily want to leave their country for positions in North America. So, the alternative is to outsource human resources from these countries. Not only are companies able to work with the best talent in the world this way, but their wages are usually less than those of similar workers in North America, especially in developing countries like India and the Philippines.
“Software is extremely labor intensive and labor makes up the majority of the expenses. If you reduce that, you save money,” he says. “For example, the individual Indian software programmer or engineer makes 10 to 20 percent of what an American developer might make.”
The collaborating of different cultures can also bring different perspectives, different ideas, and ways of presenting them. “Developers are also able to interact with different types of customers who may have better ideas of how to improve the technology,” says Carmel.
Developing Software Around the Clock
According to Carmel, another advantage to global outsourcing is what is called the “follow the sun” or “around the clock development.” A software company can position their teams so they can, in effect, work around the clock.
“The California team goes home for the evening and they ship their code or their designs to their team in India, Israel or wherever. Those people pick it up and start working on it over a cup of morning coffee,” says Carmel. “The advantage is you can collapse the time line, the time to completion and the time to market. That is very powerful. It is still very difficult to do, but it is considered a very sexy idea in global software development.”
The idea of global outsourcing is definitely not seamless though, Carmel notes. The collaborating of cultures can also lead to immediate difficulties, or issues that may arise down the road. Language is the first barrier to effective global outsourcing. “English is the ‘lingua franca’ of computing all over the world, but not everyone can speak it that well,” says Carmel.
According to Carmel, potential software meccas like China and Russia sometimes have a hard time understanding the English language. This makes it difficult for them to communicate on an everyday basis with team members in North America or Great Britain. China and Russia have the size and talent to compete, but all things being equal, the language is less advantageous to developing good global software teams. In some cases, it would be more efficient to develop a team with a country like India because Indians have a good understanding of the English language. The way in which individuals work and manage in different countries can be different as well.
The Challenge of Communicating Across Time Zones
Other aspects can also make it hard to manage software development over international lines. Most come with the problem of distance. “It takes longer for them to visit you, and you to visit them,” says Carmel. “You can’t walk down the hall and have a quick chitchat about why the project has slowed down; It’s not possible. And because of the time zone difference, you often can’t even pick up the phone and chitchat because while you work they sleep.”
Global outsourcing and the entire concept of global software teams is still in its early stages and has many challenges to overcome, but the concept also has much to look forward to. “Software companies will continue to globalize and at a much more rapid pace then the strides we have seen already,” Carmel believes. “Its potential is limitless”
Carmel is currently researching global software teams and has a book out titled Global Software Teams, published by Prentice Hall, 1999. He teaches international electronic commerce, impacts of national information technology environment on business, systems analysis for managers, and management information systems, at the Kogod College of Business Administration at American University, in Washington D.C. He holds a doctorate in management information systems from the University of Arizona, an MBA from the University of California at Los Angeles and a bachelors in economics from the University of California at Berkeley.
Lesson from the outsourcing primer
- Advanced communication technology has allowed global software teams to become commonplace.
- Some software companies are organizing global software teams to employ the best talent in the world.
- Some software companies are developing global teams because there is the possibility that they can work around the clock.
- Language and cultural differences can lead to communication difficulties for global teams.
- Distance and different time zones can cause problems to arise within global teams.