New Forms of Work in the Light of Globalization in Software Development

New Forms of Work in the Light of Globalization in Software Development

Darja Smite (Blekinge Institute of Technology, Sweden & University of Latvia and Riga Information Technology Institute, Latvia) and Juris Borzovs (University of Latvia and Riga Information Technology Institute, Latvia)
DOI: 10.4018/978-1-60960-783-8.ch806

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Recognized as the phenomenon of the 21st century (Friedman, 2005), globalization of the world economies brought significant changes to nearly all industries, including information technology (IT) and, in particular, software development. Global software work originates from IT outsourcing that is recognized as a natural evolution of how the global market operates today (Minevich et al, 2005).

Tight budgets, shortage in resources and time has motivated many companies to start looking for partners outside. Accordingly, outsourcing and especially offshoring (relocation of business processes to a lower cost country) have become components of a new global paradigm that is based on the selection of appropriate and strategic technologies, skills and resources with the strongest potential and the lowest cost within the global marketplace.

The decision to source software development to an overseas firm is looked at frequently in simple economic terms - it’s cheaper, and skilled labor is easier to find (Carmel et al, 2005). The list of assumed benefits of global software engineering (GSE) also includes the necessity of reaching mobility in resources, obtaining extra knowledge through deploying the most talented people around the world, speeding time-to-market, increasing operational efficiency, improving quality, expanding through acquisitions, reaching proximity to market and many more. However, a recent empirical investigation shows that these benefits are neither clear-cut nor can their realization be taken for-granted as the GSE literature may lead one to believe (Conchúir et al, 2006). After a decade of experimentations companies come to realize that blind cost reduction strategies tend to fail. And the reason for this is distinction between manufacturing of goods and intellectual work.

It is not a secret that manufacturing has spread globally, and even branded products are nowadays developed by emerging nations. Software industry follows this trend and leads towards mass-production of software components following standardized product-line approaches. India and China became well known phenomenally growing software development centers. Smaller nations are also competing with each other for their best deals from the world leading contractors.

However, in contradiction to manufacturing, distribution of intellectual work is not as easy as it may seem. No matter how much companies try to industrialize software development processes by developing small pieces that would be integrated into a product at the end, the process of software development significantly depend on human interaction. In contrast to other engineering disciplines, where actual development is based on stable plans and technical designs, software engineering is suffering from rapid changes in requirements throughout the development life cycle. And if a co-located team can cope with uncertainty and changes more effectively, distribution of software life cycle activities among team members separated by contextual, organizational, cultural, temporal, and geographical boundaries introduces significant difficulties in managing interdependencies. Virtual and often asynchronous environment that characterize globally distributed projects affect the way team members interact and communicate and form an iceberg of problems that are often hidden to an unfamiliar eye.

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