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Studies have been conducted in the past on the effect of collaboration on productivity and quality in software development. In this paper we propose a new framework of tightly coupled engineering team (TCET) process to facilitate collaboration in a team and thereby improve productivity and software quality. We apply this concept in a 21-month software project for development of a test automation software suite for a real-time embedded medical device at Guidant Corporation. We observe that there is quantitative and qualitative evidence to show that the process contributed to increased productivity and software quality, and there is a definite increase in the intra-team training, ownership, and knowledge flow within the team. We also observe that project risk is reduced without harm to schedule contrary to popular perception that such collaboration may lead to redundancies and thus cost and schedule overrun.