Beyond the black box: knowledge overlaps in software outsourcing

The black-box approach - that is, the use of formal project requirements to transfer knowledge about the application problem domain from the client to the vendor organization - has long been the mainstay of outsourced software development. We've studied 209 custom application development projects in 209 global software development organizations. We used the study results to develop detailed guidelines for improving outsourcing practice and a client-vendor knowledge congruence assessment framework. The study's key finding is that effective outsourcing requires knowledge congruence - that is, a good fit in terms of business and technical knowledge across the client-vendor dyad. This uniquely extends the notion of the product/process fit from the manufacturing management arena into the more knowledge-driven domain of software engineering.