Collaborative Project Management: Challenges and Opportunities for Distributed and Outsourced Projects

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1 i Guest Editorial Essay Collaborative Project Management: Challenges and Opportunities for Distributed and Outsourced Projects Jerry Fjermestad, New Jersey Institute of Technology, USA Nicholas C. Romano, Jr., Oklahoma State University, USA Abstract The Collaborative Project Management concept has been evolving over the past few decades as researchers and practitioners alike strive to reap the benefits from opportunities and overcome the challenges. In this short paper we highlight some of the forces that are leading, confronting and challenging distributed project management and outsourcing. Next we present a review of distributed project management and outsourcing challenges and opportunities that have been identified by researchers. Finally we present a brief introduction to the three papers in this special issue. Keywords: challenges and opportunities; collaborative project management; distributed project management; outsourcing Introduction Increasingly, organizations are distributing or outsourcing the development, engineering, and software coding of projects to an internal or external organization in different locations around the world. There has been a constant rise in the number and type of distributed and outsourcing projects over the last few years. This trend seems likely to continue as can be witnessed in the increasing research, development, and publications in this area. The new business environment of global competition is the primary reason for this phenomenon. In this regard for companies to be competitive, they must reduce their cost, speed up product development and focus on satisfying their customers. The key to this success is through the use of information technology which facilitates communication among the project team members (Desouza & Evaristo, 2004). Projects are defined as a set of activities which required manpower, materials, money, machines, and information resources (Tatikonda & Rosenthal, 2000); but that is only the beginning. These projects must be managed. Over the years, project management processes have move from first generation- R&D in an ivory tower to fifth generation R&D as a network (Nobelius, 2004).

2 ii The network model focuses on collaboration within a wide system consisting of customers, competitors, suppliers, distributors, outsourcing (Engardio, 2006; Ghosh & Varghese, 2004), and much more. What is important is the ability of an organization to control the development speed; that is what leads to competitive advantage (Engardio, 2006). The new network model corrects common problems (Frame, 1994): 1. Customer satisfaction treated as an afterthought. 2. A fixed set of tools for scheduling, budgeting, and resource allocation. 3. The traditional project management cycle often limits the project to four phases: concept, planning, execution, and closeout, and does not include operations and maintenance. The new model is collaborative, focused on the customer; it is using new tools- collaboration project management, concurrent engineering, and human skills managing change and negotiating; the project manager s role has been redefined to keep them more involved throughout the project lifecycle. Distributed Projects The objective behind distributed project management for an organization is to take advantage of an endeavor being processed from multiple locations (Desouza & Evaristo, 2004). These locations can be internal (insourced) or external (outsourced) to the organization. The benefits from distributed projects can be faster turn-around time and reduced costs leading to competitive advantage. Furthermore, as Evaristo, Scudder, Desouza, and Sato (2004) suggest, distributedness is not a single variable concept, it maybe in fact a multidimensional concept consisting of perceived distance and level of dispersion. Outsourced Projects Outsourcing is changing the way organizations work. Outsourcing became a major business strategy after Kodak s decision to focus on its core business and outsource much of its information technology services. In this regard, Kodak created partnerships with several vendors who became entrusted with different IT services so as to reduce costs. Outsourcing is defined as the decision by an organization to contract an external provider in the delivery and/or support of a product and/or services and functions (Fjermestad & Siatta, 2005). This definition holds for whether it is offshore or onshore of it the project is concerned with development, services, processes, engineering, or research. Summary and Introduction to Papers In essence, there little difference between a distributed project and one that is outsourced. Both serve the same purpose, namely to provide competitive advantage. Table 1 highlights the challenges and opportunities for distributed and outsourced projects. The major opportunities are: competitive advantage, faster turn-around of projects, becoming an integrated network, managing risk, managing the value chain, and creating an agile business environment. The challenges are many: efficient and effective coordination, knowledge sharing, project management competencies, collaboration with customers, and a more elastic value chain. In the first paper, Risk Management in Distributed IT Projects: Integrating Strategic, Tactical, and Operational Levels, Prikladnicki, Evaristo, Audy, and Yamaguti (2006) discuss differences between co-located and distributed IT projects. They present the different issues across the strategic, tactical, and operational levels of the project. The second paper by Vaidyanathan Networked Knowledge Management Dimensions in Distributed Projects (2006) develops

3 iii Table 1. Challenges and opportunities for distributed and outsourced projects Source Challenges Opportunities Distributed Projects. Efficient and effective coordination. The role of IT to facilitate communication among project team members. Knowledge sharing, control & structuring Desouza & Evaristo, 2004 Evaristo, Scudder, Desouza, & Sato, 2004 Ghosh & Varghese, 2004 Kendra & Talpin, 2004 Nobelius, 2004 Shore, 2005 Tatikonda & Rosenthal, Knowledge collect during a project is a key determinant of future project success. Developing hybrid models for a knowledge repository. Defining distributed. Collaborating with the clients. The best practices for managing distributed teams. Integrating collaborating systems. Decreasing perceived distance. Developing monitoring methods. Organizations streamlining their development strategies around time and lower costs. These strategies can lead to faster turn. Capitalizing on geographically distributed skills. distributed project. Developing better analytical tools for management. Aligning organizational values Project manager competencies Project management subcultures Supporting business processes Corporate culture Organizational structure Performance measurement systems. Leads to project success. Collaboration- customers, competitors,. Creating a network for research and development suppliers, distributors. Coordinate and integrate systems. Sharing expensive technology investments. Control product development speed. Enhancing capabilities by connecting to loosely coupled multi-technology networks. Leadership- manage the change process. Align engineering and executive cultures. Reducing task uncertainty. Developing internal measures of project success. Realizing the project development success is multidimensional. Positive changes in organizational culture resulting in integration, and commitment. Developing and utilizing effective information processing technology Prikladnicki, Evaristo, Audy, & Yamaguti, This issue Vaidyanathan, This issue. To over come: the lack of top management. Implement an integrated risk management commitment, lack of client responsibility, system unstable corporate environment, failure. To learn from past experiences to manage end user expectations, failure to identify all stakeholders. Sharing knowledge is critical for project success. A model for KM success takes into account key managerial influences, resource influences, & environmental influences. Effective use of tools like knowledge management systems (KMS) result in successful management of knowledge and are manifested in a variety of implementations (continued on the following page)

4 iv Table 1. Challenges and opportunities for distributed and outsourced projects (cont.) Source Challenges Opportunities Outsourced Projects Al-Qirim, Access to experts. Need to improve customer service. The market for outsourcing for small-medium (SME) is growing. Opportunity for experts in several business and IT processes. Web hosting of information services Engardio, Making better use of skilled U.S. staff. Prepare for new challenges. Labor arbitrage. Fully leveraging offshore talent. Cost associated with reengineering a. Overhaul outdated office operations company. How to become virtual and flexible. Improved customer satisfaction. Improved collaboration Gottfredson, Puryear, & Phillips, 2005 Farrell, 2004 Matsumoto, 2005 Oza & Hall, 2005 Roussev & Akella, This issue Schwaig, Gillam, & Leeds, This issue. More elastic value chains. How to source every activity in the value. Movement to networked suppliers chain. Outsource all but mission critical activities the customer. Develop analytical technique to understand data. To understand the competitive forces affecting an organization (production, regulatory, and organizational). Abandon incremental thinking. Use global assets efficiently and effectively. Taylor best practices to local conditions. Cultural differences. Expectation mismatch. language differences. Loss of control/job loss/transition. High coordination costs. Information security issues. Utilize agile methods: simplicity, communication, feedback, and courage. Team be a good mix of requirements analysts and architects. Managing project scope. Supply chain management. Collaboration. Speed of development. Human resource management. Quality management (efficiency and effectiveness). Cost and risk. Integration. Competitive advantage through global supply chains and production processes. Become an attractive to outsourcing by stable an open economy, efficient government, tax incentives, docile labor supply. Understand the potential difficulties that an organization can face in an outsourcing situation. Creating an agile environment in an outsourcing project relies on: maintaining a balance between the functions and sizes of the teams; on redefining the developers roles; on reorganizing the information flow. Link outsourcing to the strategic objectives of the organization. Develop the network links for collaboration and coordination. Implement risk management processes

5 v a framework of the structural, cognitive, relational, and technological dimensions for understanding and improving the knowledge transfer process in project management. The third paper by Roussev and Akella Agile Outsourcing Projects: Structure and Management (2006) discusses how to harness agile software development for large-scale outsourced projects. The authors proposed approach makes agile outsourcing applicable to the stressed condition of both offshore and onshore outsourcing environments without compromising the quality of the software development effort. The fourth paper by Schwaig, Gillam, and Leeds, entitled Project Management Issues in IT Offshore Outsourcing, discusses project management in IT outsourcing. The authors suggest that not all offshore outsourcing projects are successful. The authors develop several recommendations to improve the effectiveness of such projects. The four papers in this second of two special issues on Collaborative Project Management focus on distributed and outsourced projects. All four of the papers emphasize the challenges and opportunities that arise when an organization decides to move into the realm of distributed and outsourced projects. The papers together cover the gamut of project management from distributed and outsourced projects from multi-level managerial issues to knowledge transfer and from new methodologies such as agile approaches to enhanced project effectiveness. All four papers provide an interesting perspective on this timely and important topic that deals with not only the technological issues but also the human and managerial issues involved in complex distributed and outsourced project management. Together they provide useful insights and valuable guidance for project management researchers and practitioners alike. Acknowledgments We are pleased to have had the opportunity to work with the authors and the Editor in Chief of the International Journal of Electronic Collaboration (IJeC), Ned Kock, and truly believe that this issue is a valuable contribution to the growing body of knowledge in the area of Collaborative Project Management. References Al-Qirim, N. A. Y. (2003). The strategic outsourcing decision of IT and ecommerce: The case of small businesses in New Zealand. Journal of Information Technology Cases and Application Research, 5(3), Cai, J., Lu, S. C. Y., Grobler, F., Case, M., & Jing, N. (2005). Modeling and managing collaborative processes over the internet. Business Process Management Journal, 11(3), Desouza, K. C., & Evaristo, J. R. (2004). Managing knowledge in distributed projects. Communications of the ACM, 47(4), Engardio, P. (2006, January). The future of outsourcing. BusinessWeek, 30, Evaristo, J. R., Scudder, R., Desouza, K. C., & Sato, O. (2004). A dimensional analysis of geographically distributed project teams: a case study. Journal of Engineering and Technology Management, 21(3), Farrell, D. (2004, December 12). Beyond offshoring assess your company s global potential. Harvard Business Review, 82, Fjermestad, J., & Saitta, J. (2005). A strategic management framework for IT outsourcing: A review of the literature and the development of a success factors model. Journal of Information Technology Cases and Applications Research, 7(3),

6 vi Frame, J. D. (1994). The new project management: Tools for an age of rapid change, corporate reengineering, and other business realities. San Francisco: Jossey-Bass. Ghosh, P. P., & Varghese, J. C. (2004). Globally distributed product development using a new project management framework. International Journal of Project Management, 22(8), Gottfredson, M., Puryear, R., & Phillips, S. (2005, February 2). Strategic sourcing from periphery to the core. Harvard Business Review, 83, Kendra, K., & Taplin, L. J. (2004). Project success: A cultural framework. Project Management Journal, 35(1), Matsumoto, H. (2005). Global business process/is outsourcing to Singapore in the multinational investment banking industry. Journal of Information Technology Cases and Application Research, 7(3), Nobbelius, D. (2004). Towards the sixth generation of R&D management. International Journal of Project Management, 22(5), Oza, N. V., & Hall, T. (2005). Difficulties in managing offshore software outsourcing relationships: An empirical analysis of 18 high maturity Indian software companies. Journal of Information Technology Cases and Application Research, 7(3), Prikladnicki, R., Evaristo, R., Audy, J. L. N., & Yamaguti, M. H. (2006). Risk management in distributed IT projects: Integrating strategic, tactical, and operational levels. International Journal of e-collaboration, 2(4), Roussev, B., & Akella, R. (2006). Agile outsourcing projects: Structure and management. International Journal of e-collaboration, 2(4), Schwaig, K. S., Gillam, S. H., & Leeds, E. (2006). Project management issues in IT offshore outsourcing. International Journal of e-collaboration, 2(4), Shore, B. (2005). Failure rates in global IS projects and leadership challenges. Journal of Global Information Technology Management, 8(3), 1-5. Tatikonda, M. V., & Rosenthal, S. R. (2000). Technology novelty, project complexity, and product development project execution success: A deeper look at task uncertainty in product innovation. IEEE Transactions on Engineering Management, 47(1), Turner, J. R. (2004). Five necessary conditions for project success. International Journal of Project Management, 22(5), Vaidyanathan, G. (2006). Networked knowledge management dimensions in distributed projects. International Journal of e-collaboration, 2(4),

7 vii Jerry Fjermestad is an associate professor in the School of Management at NJIT. He received a BA in chemistry from Pacific Lutheran University, an MS in operations research from Polytechnic University, an MBA in operations management from Iona College, and an MBA and PhD from Rutgers University in management information systems. He has taught courses on management information systems, decision support systems, systems analysis and design, electronic commerce, data warehousing, and graduate seminars in information systems. His current research interests are in collaborative technology, decision support systems, data warehousing, electronic commerce, global information systems, customer relationship management, and enterprise information systems. Dr. Fjermestad has published in the Journal of Management Information Systems, Group Decision and Negotiation, the Journal of Organizational Computing and Electronic Commerce, Information and Management, Decision Support Systems, Logistics Information Management, International Journal of Electronic Commerce, and several other journals and conference proceedings. Dr. Nicholas C. Romano, Jr. is assistant professor of management science and information systems at Oklahoma State University (OSU). He received a BS in biology (1986), BS in MIS (1988), MS in MIS (1992), and PhD in MIS (1998) from the University of Arizona. Prior to joining OSU in 2001 he was an assistant professor of MIS at the University of Tulsa and Research Scientist at the University of Arizona s Center for the Management of Information. His research interests involve collaborative systems and include technology-supported learning, group support systems design, use and facilitation, knowledge creation and management, collaborative project and process management, electronic customer relationship management, and information systems accessibility. Dr. Romano has published papers in a number of scholarly journals, conference proceedings and practitioner journals, including the Journal of Management Information Systems, International Journal of Electronic Commerce, the Journal of the American Society for Information Science, Information Systems Frontiers, Proceedings of the Hawaii International Conference on Systems Sciences, Proceedings of the Conference of the Association of Management, and Proceedings of the Americas Conference on Information Systems.