Is time-zone proximity an advantage for software development? The case of the Brazilian IT industry

Brazil has been emerging as a destination for IT software and services. The country already had a strong domestic base of IT clients to global companies. One of the competitive factors is time zone location. Brazil has positioned itself as easy for collaboration because of time zone overlap with its primary partners in North America and Europe. In this paper we examine whether time zone proximity is an advantage for software development by conducting a country-level field study of the Brazilian IT industry using a cross section of firms. The results provide some support for the claims of proximity benefits. The Brazil-North dyads use moderate timeshifting that is perceived as comfortable for both sides. The voice coordination that the time overlap permits helps address coordination challenges and foster relationships. One company, in particular, practiced such intense time zone aligned collaboration using agile methods that we labeled this Real-time Simulated Co-location.