Abstract

A reality for many information technology (IT) organizations is the need to hire IT talent from other cities or countries to supplement their employee staff. As organizations extend their software development work to remote locations, however, a distinct productivity gap can emerge between co-located and distributed teams. The problem this study addresses is the reduced productivity levels for teams practicing the Agile methodology when team members are distributed by location or time zone. Specifically, it was unknown if there are organizational factors which can improve the productivity of these distributed development teams. The purpose of this study was to determine whether any amount of separation of team members impacts productivity, or if various degrees of time zone overlap allows for sufficient synchronous communication to overcome the communication lag inherit with having distributed teams. Productivity was measured by the number of story points per cycle day completed by the team. Two additional variables were collected to study the impact of sourcing and task complexity on distributed team productivity. A quantitative data analysis was conducted on a large, globally distributed technology organization practicing the Agile methodology across the Americas, Europe, Africa, Asia, and Australia. Teams were classified in the study based on the amount of time zone overlap of the team members. The results of the study found that teams which were co-located or had any amount of time zone overlap performed at similar levels of productivity, while teams with no overlapping business day experienced significantly lower levels of productivity (p < .05). Conversely, sourcing of the resources either as contractors or employees did not demonstrate a significant difference in team productivity. The data analysis on task complexity showed mixed results; there was a different level of productivity when some teams were working tasks of different complexity, but the data was further nuanced by team member location. This study indicates the importance of resource location as a key factor in team productivity. Further study on organizational design could be beneficial to better understand how organizations should select locations to optimize productivity.