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

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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 distrib

-uted 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 dis-tributing or outsourcing the development, engineering, and software coding of projects to an internal or external organization in dif-ferent 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 activi-ties 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).

The network model focuses on collaboration within a wide system consisting of customers, competitors, suppliers, distributors, outsourc-ing (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 com-mon 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- col-laboration 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 & Eva-risto, 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 re-duced 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 orga-nizations 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 (Fjer-mestad & Siatta, 2005). This definition holds for whether it is offshore or onshore of it the project is concerned with development, ser-vices, processes, engineering, or research.

suMMAry AnD

IntrODuCtIOn tO PAPers

In essence, there little difference be-tween a distributed project and one that is outsourced. Both serve the same purpose, namely to provide competitive advantage. Table 1 highlights the challenges and opportu-nities 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”, Priklad-nicki, Evaristo, Audy, and Yamaguti (2006) discuss differences between co-located and distributed IT projects. They present the dif-ferent issues across the strategic, tactical, and operational levels of the project.

The second paper by Vaidyanathan “Net-worked Knowledge Management Dimensions in Distributed Projects” (2006) develops

source Challenges Opportunities Distributed Projects

Desouza &

Evaristo, 2004 . Efficient and effective coordination. The role of IT to facilitate communication among project team members . Knowledge sharing, control &

struc-turing

. Knowledge collect during a project is a key determinant of future project success . Developing hybrid models for a knowledge

repository Evaristo, Scudder, Desouza, & Sato, 2004 . Defining distributed

. The best practices for managing distrib-uted teams

. Decreasing perceived distance . Developing monitoring methods

. Collaborating with the clients . Integrating collaborating systems

Ghosh &

Varghese, 2004 . Organizations streamlining their develop-ment strategies . Capitalizing on geographically

distrib-uted skills.

. These strategies can lead to faster turn around time and lower costs

. Developing better analytical tools for distributed project management Kendra & Talpin,

2004 . Aligning organizational values Project manager competencies Project management subcultures Supporting business processes Corporate culture

Organizational structure

Performance measurement systems

. Leads to project success

Nobelius, 2004 . Collaboration- customers, competitors, suppliers, distributors

. Coordinate and integrate systems . Control product development speed . Enhancing capabilities by connecting

to loosely coupled multi-technology networks

. Creating a network for research and de-velopment

. Sharing expensive technology invest-ments

Shore, 2005 . Leadership- manage the change pro-cess

. Align engineering and executive cul-tures

. Positive changes in organizational culture resulting in integration, and commitment Tatikonda &

Rosenthal, 2000 . Reducing task uncertainty. Developing internal measures of project success

. Realizing the project development success is multidimensional

. Developing and utilizing effective informa-tion processing technology

Prikladnicki, Evaristo, Audy, & Yamaguti, This issue

. To over come: the lack of top management commitment, lack of client responsibility, unstable corporate environment, failure to manage end user expectations, failure to identify all stakeholders

. Implement an integrated risk management system

. To learn from past experiences Vaidyanathan,

This issue . Sharing knowledge is critical for project success

. A model for KM success takes into account key managerial influences, resource influ

-ences, & environmental influences

. Effective use of tools like knowledge

man-agement systems (KMS) result in successful

management of knowledge and are mani-fested in a variety of implementations

Table 1. Challenges and opportunities for distributed and outsourced projects

source Challenges Opportunities Outsourced Projects

Al-Qirim, 2003 . Access to experts

. Need to improve customer service . The market for outsourcing for small-me-dium (SME) is growing

. Opportunity for experts in several business and IT processes

. Web hosting of information services Engardio, 2006 . Making better use of skilled U.S. staff

. Prepare for new challenges

. Cost associated with reengineering a company

. How to become virtual and flexible

. Labor arbitrage

. Fully leveraging offshore talent

. Overhaul outdated office operations

. Improved customer satisfaction . Improved collaboration Gottfredson,

Puryear, & Phillips, 2005

. More elastic value chains . Movement to networked suppliers

. Outsource all but mission critical ac-tivities

. How to source every activity in the value chain

. Develop analytical technique to understand the customer data

Farrell, 2004 . To understand the competitive forces affecting an organization (production, regulatory, and organizational) . Abandon incremental thinking

. Use global assets efficiently and ef -fectively

. Taylor best practices to local conditions

. Competitive advantage through global sup-ply chains and production processes

Matsumoto, 2005 . Become an attractive to outsourcing by

stable an open economy, efficient govern -ment, tax incentives, docile labor supply Oza & Hall,

2005 . Cultural differences. Expectation mismatch . language differences

. Loss of control/Job loss/Transition . High coordination costs

. Information security issues

. Understand the potential difficulties that

an organization can face in an outsourc-ing situation

Roussev & Akella, This issue

. Utilize agile methods: simplicity, com-munication, feedback, and courage . Team be a good mix of requirements

analysts and architects

. Creating an agile environment in an out-sourcing project relies on: maintaining a balance between the functions and sizes

of the teams; on redefining the develop -ers’ roles; on reorganizing the

informa-tion flow

Schwaig, Gillam, & Leeds, This issue

. Managing project scope

. Supply chain management . Collaboration

. Speed of development . Human resource management

. Quality management (efficiency and

effectiveness) . Cost and risk . Integration

. Link outsourcing to the strategic objectives of the organization

. Develop the network links for collaboration and coordination

. Implement risk management processes

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 Ake-lla “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 environ-ments without compromising the quality of the software development effort.

The fourth paper by Schwaig, Gillam, and Leeds, entitled “Project Management Is-sues in IT Offshore Outsourcing”, discusses project management in IT outsourcing. The authors suggest that not all offshore out-sourcing 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 Man-agementfocus 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 method-ologies 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 dis-tributed 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 op-portunity 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.

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Jerry Fjermestad is an associate professor in the School of Management at NJIT. He re

-ceived 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 Manage-ment, 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 Informa

-tion. His research interests involve collaborative systems and include technology-supported learning, group support systems design, use and facilitation, knowledge creation and man

-agement, collaborative project and process man-agement, electronic customer relationship management, and information systems accessibility. Dr. Romano has published papers in a number of scholarly journals, conference proceedings and practitioner journals, includ

-ing the Journal of Management Information Systems, International Journal of Electronic

Commerce, the Journal of the American Society for Information Science, Information Sys-tems 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.