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Software Development Projects in Multi-site and Multi-cultural Environments: A Discourse of Challenges

Princely Ifinedo, Cape Breton University, Sydney, NS, Canada, princely_ifinedo@cbu.ca

Abstract

Software products and information technology (IT) systems that are being developed in or sourced

from foreign countries are becoming popular among business organisations for various reasons

including cost advantage and reliability. The trend of sourcing or developing software products using foreign parties does present its challenges. In this paper, we shall identity and discuss the challenges

facing organisations with a desire to exploit the option of sourcing or developing software products

in multi-site and multi-cultural environments. To that end, a conceptual framework is proposed to guide the discourse. The research community benefits from comprehensive literature on the issue,

and practitioners may apply some of the suggestions mooted herein.

1. Introduction Over the last decades, the world has witnessed an irreversible trend towards globalisation of almost everything from soft drinks and fast-food to software and information systems [8], [23], [34], [37]. Herbsleb and Moitra [23] comment that “economic forces are relentlessly turning national markets into global markets and spawning new forms of competition and cooperation that reach across national boundaries”. It goes without saying that the software business and Information Technology (IT) are two large industries with an increasing level of operations that are closely linked in a global liberalised economy (see [8], [49], [56]). Previously, collaborations in software and IT systems development used to localize with firms using whatever is available at home. Nowadays, the development of software and IT systems has gone global ([12], [37], [60]). ZDNet Research [65] reports that the global software market experienced its 14th consecutive quarter of year-to-year growth with revenues of $2.7 billion in the first quarter of 2007, which represents an increase of 11.4% over the corresponding quarter in 2006. Underpinning the growth of global software development enterprise is the ability or willingness of businesses to engage in cross-national cooperation [37]. This paper will focus on challenges that could arise when entities from diverse national and cultural backgrounds come together to develop or source software products or IT systems. The term multi-site and multi-cultural software development (SD) as used in this paper would encompass the various appellations employed to describe the development of both software products and other IT systems by entities operating in more than one location and across

national and cultural settings. To that end, we shall use the acronym MULSMULC_SD (multi-site, multi-cultural software development) [26] to describe such set-ups. Importantly, the acronym extends to such concepts as virtual teams [28], [39], [43], international strategic alliances or ad hoc arrangements in SD as well as IT outsourcing [14], [17], [59], and [63]. Please see Figures 1 and 2 for illustrations. The objective of this paper is not to dwell on each of the constituting sub-categories but to refer to the various alternatives under the umbrella term MULSMULC_SD. The transaction cost theory of Williamson [62] could be utilized to differentiate the various arrangements or categories (please see [5]). It is worth noting that such a discussion is beyond the scope of this current paper. Fig 1. The Constituents of Multi-site, Multi-cultural

Software Development

The concept of virtual teams in SD refers to the arrangement whereby teams from different countries interact electronically in the course of developing software or IT systems [28]. Similarly, international strategic alliances in SD are formed, when entities from more than one country engage in systems development efforts. The outsourcing or offshoring of systems development refers to the business practice whereby a business entity in one country looks for a foreign vendor or partner in another country that has expertise in developing software or IT systems that were previously performed in-house domestically. For understanding purposes, Figure 2 is used to illustrate the various concepts. In four hypothetical countries (A-D), there are entities or teams developing software locally. At the same time, they engage in cross-national and cultural cooperation, that is, country B insources from country A, and outsources some projects to country C. Teams or entities in countries A, B and C engage in strategic software development activities. In addition, the teams from countries B, C, and D are engaged in virtual SD.

MULSMULC_SD

Virtual Teams

in SD

Other

Strategic

Alliances in

SD

IT Outsourcing and

Other Sourcing SD

Governed by the Transaction Cost Theory

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Legend: - Teams / entities - Teams’ efforts in localised SD activity - Internationalised strategic alliance of SD - Software development (SD) (localised) - IT outsourcing, offshoring - SD (Internationalised strategic alliance) - SD (Virtual teams) linked by telecoms

Fig 2. The Scope of Operations in MULSMULC_SD (multi-site, multi-cultural software development) Having said that, a conceptual framework (Figure 3) consisting of relevant issues from related literature is proposed to guide the discourse. Each is discussed as follows: Legend: A = MULSMULC_SD

Fig. 3. The Conceptual Framework for the

Challenges in MULSMULC_SD Arrangement I. Project management and communication

issues

In a broad sense, software project management involves the coordination, controlling, monitoring, staffing, and scheduling of resources in a project. Realistically, when projects are locally constituted, there are enough difficulties, let alone when national boundaries are transcended. The problems associated with MULSMULC_SD projects specifically may include the inability of the project manager to control ongoing activities due to distance and time-zone differences, etc. However, as SD efforts become more globalised, organisations involved in such ventures may moult to overcome emerging difficulties by restructuring their organisational structures [6], [18], [33]. Studies have shown that successful organisations in the software/IT and other industries are those that

Country A, Site A, Culture A Country B, Site B, Culture B

Country D, Site D, Culture D

Country C, Site C, Culture C

-Project management and communications

-Process management and standards

-Strategic and managerial considerations

-Culture

-Trust & relationship

management

-Infrastructure

-Nature of systems

-Technical issues

-Time-zones and Distance issues

-Legal, Political, Economic issues

A

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are moving toward a dynamic network structure, i.e. changing with the changing times (see, [29], [30]. In particular, the complexity of managing software projects in a multi-site and multi-cultural scenario may manifest in various ways, including the inability to control budget, improper reporting patterns, problems with project inspections, improper review of jobs and milestones, inconsistencies in quality of project deliverables and outcomes. Furthermore, when the teams in a global SD projects are distributed across many nations, the problems of communication tend to arise [58]. Differences may surface in the way communications – its mode, choice of tools, correctness and contents - are carried out across the various sites, for example, some cultures may be laden with unspoken expressions and gestures, or the use of face-to-face communication is valued above other means such as the use of email or video-conferencing facilities, and on. Moreover, some have suggested that information passing through different cultures tend to be filtered poorly [40]. The ability of the project manager to understand these sorts of problems may ensure the success of any MULSMULC_SD project. In the same regard, studies have indicated that SD projects often fail because of the inability of the project manager to overcome some of the discussed problems [16]. The following measures in relation to project management and communication problems could enhance success for any MULSMULC_SD project:

- An international planning system should be employed. The system should be able to consider cultural diversities. Institutionalised localised systems that may not function properly as national boundaries are crossed may be discarded.

- A suitable control mechanism that suits the organisation or the participants in the network of global SD projects be employed to facilitate the free flow of information.

- Regular consultations and visits from the coordinating hub, i.e., HQ executives should be encouraged [6].

- The company-wide promotion of project management tools for scheduling and planning e.g. Gantt chart and Ms Project may be useful and could be supported.

- Effective communication training, across the sites should be instituted.

- People skills management should be emphasised [32].

- All sites must follow key communication protocols [4].

II. Technical issues

Inadequate technical expertise may be a source of problems in global SD projects (see [23], [34]). Similarly, Nahar and Karmakar [44] emphasize the negative impacts of inadequate technical skills in the context GIS implementation in developing countries. These authors identified the relative high cost of hardware, and low technical abilities among workers from such regions as inhibitors. The low quality of work amongst software developers in less developed countries of the world may be daunting when MULSMULC_SD projects directly involve entities from such regions [6] and [22]. The unavailability of reliable partners could inhibit operations of MULSMULC_SD in such parts of the world. In some instances, the unavailability of certain types of skills could be limiting factor. For example, one commentator in the global IT sourcing business notes, “It can be hard to find skills related to second-tier software packages and technologies …. (in India)” [9]. Additionally, there is a danger of engaging in partnerships with entities that cannot altogether do a job because of limited technical skills or expertise [22]. To militate against the problems arising from low technical skills, organisations involved in MULSMULC_SD projects may consider the following measures:

- Train of local software developers regularly.

- Expose local software developers to new trends in the software and information development fields.

- Encourage and promote skill-upgrading programmes

III. The nature of systems being developed Krishna et al. [37] suggest that the choice of projects (the nature of systems being developed) could be a significant factor in a MULSMULC_SD projects. They commented: “software that is to be embedded in operating systems or consumer products can often be specified in a relatively culturally neutral way, so

less cross-cultural understanding is needed. Similarly, middleware is a layer of software

between the network and the applications that performs the function of enabling different end-user systems to communicate more effectively with one another in advanced network applications.

This can often be specified in a way that does not depend on continuous cross-cultural contact

between outsourcer and supplier” [37, p64]. Thus, in order to maximize cooperation with partners in MULSMULC_SD projects, and at the same time minimise conflicts between entities coming from diverse backgrounds, attention needs to be paid to the nature of the systems being developed. As suggested by Krishna et al. [37]

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above, certain applications or systems may be affected influences emanating from differing cultural orientations, whilst other may not. A deeper understanding of such issues could engender successful outcomes for MULSMULC_SD projects. IV. Process management and standards The development methodology is the guide by which teams - local or dispersed partners - conceptualise the software development cycle [6]. The development methodology is the connector or the common language bridging developers, at the different sites. Also, the process model refers to the representation of the stages or sequences including the designing, coding, and testing stages. It is through the process model that any software or IT product evolve. The two main standards used in software developments are (International Standards Organisation) ISO 9000 series (for software), and the CMM (Capability Maturity Model) (see [50]). Regardless, we believe that since operations are dispersed or scattered across sites in a MULSMULC_SD set-up, it could be beneficial to all participants when each constituting entity to adhere to the same procedures, i.e., subscribe to the same development methodology or process model. At the same time, seamless interactions should be encouraged across the sites. Zachary [64] suggests that the interactions among team members may, in fact shape the development processes more than production methods or standards do. Curtis [10] also asserts that any software development effort that does not explicitly account for how people work together is likely to be unsuccessful. Notwithstanding, some authors have cautioned against the use of standardised methodologies [in different contexts to MULSMULC_SD projects]. Pavlia and Hunter [48] argue that promoting a standardised choice of methodology and approach may not be a practical idea. Unequivocally, consistency in the use and choice of software methodologies and procedures may be useful at the initial stages of a MULSMULC_SD project.

V. Cultural differences

Diverging views exist as to the impact of culture on

global software and IT systems development

projects. Some scholars subscribe to the view that

culture is not a major factor, whereas others believe

that cultural differences are critical issues for

global SD projects. Among those that accept that

culture is a factor are Herbsleb and Moitra [23]

who suggest that cultural differences may worsen

communication in multi-site software development.

Similarly, Matheson and Tarjan [40] note that

information passing through different cultures

tends to be filtered poorly. In general, studies

related to cross-cultural differences in the IS

domain tend to overwhelming suggest that the

existence of differences arising from cross-national

cultural differences. For example, Kumar and

Bjorn-Andersen [36] found differences between

systems designers or developed across nations on

certain systems or software development issues.

Likewise, Shore and Venkatachalam [53] posit that

some dimensions of national cultures could affect

the stages/phases of information systems

development (ISD) projects. Decision-making in

systems development process may be sensitive to

some dimensions of national culture [35], and the

dimensions of national culture could influence the

adoption of IT infrastructure [3] and [51].

Damian and Zowghi [11] have shown through

empirical evidence that diversity in culture may

negatively affect requirements specifications. Also,

a study of some multinationals in the US and

Japan, found that differences exist between the

ways firms manage IT [45]. On the other hand,

others have suggested that the causes of diversity

may be related to other factors, including political

and socio-economic differences [47] and [61].

Regardless, an overwhelming number of IS

research tend to suggest that cultural dimensions

and differences may matter in MULSMULC_SD

arrangements. Siakas et al. [55] commented:

“Culture is a critical factor. In today’s global

business…Emphasis is put on cultural differences

not only between employees in the global

organisation but also on cultural differences

between clients in the global market”.

The classification of national cultures by Hofstede

[24] is often used in highlighting national cultural

differences, although other topologies on cross-

cultural differences exist (see also [19]). Hofstede’s

[24] classification included items indicating

differences with regard to the perception of power,

uncertainty and risks, relationships, etc by different

nationalities. Hofstede [24] contends that nations

hold differing views regarding such matters.

Against this background, Krishna et al. [37] noted

that some British participants and their Indian

counterparts in one MULSMULC_SD arrangement

exhibited differing values towards power, etc. Also,

Shore and Cross [54] write that “team members

from more task-oriented cultures, such as the US

and Germany, may spend little time in getting to

know each other, ... this is not true for relationship-

oriented culture, such as Middle East, where more

emphasis is placed on getting to know colleagues.”

Relatedly, some cultures are high in trust than

others. For example, in Thailand trust can be

achieved only by face-to-face and rich

communication [20].

In order to reduce the negative impacts resulting

from culture differences in MULSMULC_SD

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arrangements, it is advocated that training in cross-

cultural studies and management be made available

to all participating parties. Carmel and Agarwal [7]

propose the role of a cultural liaison, who might be

a project manager or any key executive in global

organisations who travels back and forth between

key stakeholder sites. Carmel [6] found that up to

47% of global software teams have cultural-

liaisons in their organisations. Other measures to be

considered may include the following below:

- Translate polices and practices into local languages [44]

- Institute training programmes geared towards promoting the benefits of diversity

- Project leader(s) should be cognisant of sites members’ differences

- Encourage inter-organisational visits and encounters.

- Facilitate training in company’s values and vision.

- Employ workers and management staff that have roots in host countries, if suitable locals can’t be found

- Endeavour to use of ONE common lingua franca, for example, English or French

- Rotate management and staff across locations and cultures [34], [37]

- Set up mixed teams with memberships from different cultural backgrounds [15]

VI. Trust and relationship management

Trust-related issues may arise because of the apparent diversity or the lack of physical contacts between participants. The absence of trust may be inimical to any social engagement [25]. In the context of virtual team, Carmel [6] asserts that trust is a major element for success. This may be understandable considering the absence of physical contacts. Trust is equally vital for the other constituents of MULSMULC_SD (see [17], [30], [31], [39], [52]). Putting people who have skills in developing trust in key positions could help alleviate any problems that could arise [17], [34], [52]. Further, Karolak [34] also noted that assigning a person that is not afraid to travel might be useful in consolidating trust in MULSMULC_SD ventures. Sustained contacts could help to bridge any gaps. This may be more important where face-to-face consultations are valued the more (see [20]). Furthermore, in order to promote good contacts and communications within a network of MULSMULC_SD project, some researchers have suggested that trust needs to be nurtured systematically [29], [30], [31]. In the same regard, Handy [21] has suggested that an aspect of MULSMULC_SD arrangement, i.e., virtual teams might not be able to function effectively in the

absence of frequent face-to-face interactions [28]. Overall, the management of MULSMULC_SD projects must be constantly devises means to build and sustain trust for their set-ups.

VII. Strategic and management issues Organisational and strategic issues in MULSMULC_SD arrangements are as important as all the other issues discussed so far. Realistically, this item is considered the most important element required for successful outcomes in systems development projects (see [13], [16]). This could be explained as follows: Entities in MULSMULC_SD set-ups are faced with a myriad of business and organisations problems that could cause such arrangements to be discontinued, if not properly considered. Lipnack and Stamps [39] posit that the management of a successful virtual company requires 90% people-related factors and 10% technology. This underscores the import management over technology. To this end, management and leadership in any MULSMULC_SD arrangement should be adequately equipped with clear vision, goals and strategy vis-à-vis its objectives for engaging in MULSMULC_SD cooperation. The absence of clarity in vision and goals is not in the interest of such set-ups [1]. Karolak [34] assert that the leadership should understand emerging problems and have a vision for their solutions. Mainly, the supporting organisational structures must be constituted in such a way that the overall objectives of the collaborative engagement are effectively met. Deeper understanding by the management of MULSMULC_SD projects could benefit from management models and coordination mechanisms that bring out the best from participating parties (see [18]). Herbsleb and Moitra [23] writing about strategic and organisational issues in global SD write: “An ideal arrangement would let the sites operate as independently as possible while providing for easy, flexible, and effective communication across sites”. The leadership of any MULSMULC_SD project must have a clear picture of its value chain activities in order to act in a timely fashion when opportunities present themselves. In general, the coordination of MULSMULC_SD projects needs to be effective and efficient for success to be ensured [7], [15], [34].

VII. Distance and time-zone management

Distance matters in MULSMULC_SD projects [2], [38]. The Follow-the Sun project of IBM in the 1990s provides an example regarding the importance of distance and time-zone differences issue in MULSMULC_SD projects [6]. Cost and coordination are the two twin issues that are often

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associated with the issue of distance and time zone differences. Cablevision's John Blanco comments underscore the relevance of the two issues with regard to distance and time-zone difference challenges in MULSMULC_SD projects. He comments that “The geographic distance between the U.S. and India increases communication and travel costs, which can erode some of the initial cost benefit. For instance, it costs $200,000 a year to maintain a 2Mbit/sec. dedicated link between an office in New York and a development centre in India” [9]. Paradoxically, distance can be a barrier and an advantage, simultaneously, in MULSMULC_SD projects. Clearly, the good point about distance and time zone differences in MULSMULC_SD projects is that they enable tasks being done non-stop [6], [34]. The downside is the increased costs for participants. Moreover, distance in MULSMULC_SD projects could be a problematic issue because of diminished coordination and communication that may arise. In connection with this, Carmel and Agarwal [7] discussed the paradox of how proper coordination and communication could alleviate the problems arising from distance. They noted that coordination could involve integrating each task within each unit or team to meet the overall objective of the global entity, i.e., MULSMULC_SD, and efficient communication could be achieved through the transmission and exchange of information – in ambiguous and unambiguous forms (see also [41]). In brief, the impact of time zone differences and distance can be ameliorated through the following approaches:

- Asynchronous and synchronous telecommunication forms should be promoted. For example, the use of email, video-conferencing and other groupware technology [28], [34].

- The stationing of in-house experts in host and home countries, to facilitate the flow of information both ways may be necessary.

IX. Infrastructural problems

A major challenge that could face any MULSMULC_SD project is the lack of infrastructural facilities wherever it may set up. However, it worthwhile to point out that these sorts of problems is often confined to the developing parts of the world [22], [27]. This should be a major source of concern because recently MULSMULC_SD projects are beginning to expand to these regions as well [6], [22], [27]. That said, infrastructural problems may include low data bandwidth, ineffective and inefficient telephone services, the unavailability of the Internet or its poor access, and very high costs in procuring communication facilities for entities in MULSMULC_SD set-ups coming developing countries [22], [44]. Such inadequacies in

infrastructure may result in delays during data transmissions or an outright loss of data. Karimi and Konsynski [33] have noted the frustration of having the inappropriate telecommunications network in MULSMULC_SD projects (see also Carmel, 1999). Watson et al. [61] writing about a developing country comments that “… In Estonia; for example, the availability of telephones lines is still very much an issue, and this in turn has a direct impact on telecommunications”. Further, the Russian-American collaboration (Orchestral Technologies), which Carmel [6] wrote about in his book suffered for years from poor quality telephone service, to the extent that telephone conversations were impossible or difficult at times. The author also cited another example in the case involving Ivory Systems in India in 1994. In this early period, telecommunications in India were much more inefficient; consequently, work efforts in MULSMULC_SD projects may have been impacted negatively. In the Ivory Systems case, the parent company of that company incurred high coordination overheads due to the inadequacies in telecommunication in India at that time according to Carmel [6, p85]. It is suggested that no serious collaborative MULSMULC_SD venture should be embarked upon, unless the participants are assured of access to reliable, high-speed connections for all data communications [6]. It has to be noted that several big participants in MULSMULC_SD ventures have started securing company satellite systems, including VPN and other telecommunication facilities for their data transmissions. Many others buy their own electric power generating plants to supplement the local supply.

X. Political, legal and economic factors Clearly, the significance of political and economic factors on the activities of MULSMULC_SD projects cannot be over-emphasised. First, in some instances, governments have been known to impose unfavourable rules and regulations on multinational corporations with regard to what such entities import to or export from their host countries (e.g. [42], [57]. For example, in Brazil, by law, all technology transfer agreements must be documented with the authority [57]. Similarly, the conduct of some government functionaries may be inimical to the activities of MULSMULC_SD operators. In extreme instances, corrupt functionaries may demand gratifications or bribes from foreign nationals before some matters are dealt with. Second, on the economic front, currency restrictions – limits on the amounts that are brought in or taken out of a country - might be imposed by some host countries. Likewise, high import and export duties, tariffs, and levies may be applicable to foreign companies, in some instances. Relatedly,

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the relative low earning power seen for developing countries [27] may negatively impact returns of MULSMULC_SD operators in such regions. The poor socio-economic environments and the lack of technical expertise (SD) in some of these poorer regions of the world could make the recruitment of skilled IT professionals and software developers difficult, especially when those with some skills often prefer to leave their countries in search better or higher wages abroad. Additionally, differing intellectual property rights (IPR) and laws across countries (e.g. [42]), could pose problems for MULSMULC_SD ventures. It is therefore, incumbent upon the management of MULSMULC_SD projects to develop appropriate procedures and strategies that could help minimise the negative impacts arising from differences in legal, IRP, political and economic environments. In order to attenuate some of shortcomings discussed in this section, we suggest prominent and visible roles are accorded host countries nationals in MULSMULC_SD set-ups. Such a practice may help ease any resentment from hostile host governments.

2. Conclusions This paper has discussed the challenges facing software and IT systems development in multi-site and multi-cultural environments. The paper identified various challenges and proposed a conceptual framework to discuss the topic. Some of the measures recommended to attenuate the challenges include acknowledging the existence of cultural diversity. Also, a clear strategy on the part of the participants of any MULSMULC_SD arrangement could be beneficial. Similarly, competent leadership and management skills and the ability to build trust and maintain relationships may be desirable. Good knowledge of the external environments is useful. The epicentre of this discourse is that the road to multi-site and multi-cultural software development on an international scale is literally not paved with gold, and that a deeper understanding of the sorts of challenges that could arise may help engender success in such ventures. The paper highlights that when entities involved in or having plans to involve in such ventures are adequately armed with the relevant knowledge regarding the challenges that might crop up, then the outcome for their exploits may be more favourable than when such knowledge are in the lack. Overall, this proposed conceptual framework may serve as a tool or guideline for the management of multi-site and multi-cultural software development projects as they seek inputs to addressing or tackling some of the critical challenges. With regard to research, this discourse may entice researchers to investigate further some of the discussed challenges in the context of software development in multi-site and multicultural environments. For example, studies

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