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.