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Adopting Agile Project Management Methods in Software Projects Involving Outsourcing Adopting Agile Project Management Methods in Software Projects Involving Outsourcing By Nivarthana Warnakulasooriya A thesis submitted to the Victoria University of Wellington In partial fulfilment of the requirements for the degree of Master of Commerce Victoria University of Wellington 2016 Abstract With the evolvement of how software was built, how quickly the initial requirements change, how fast new technologies were appearing in tech world and evolving innovation needs of dynamic businesses, the software industry was feeling the need for a better way of managing projects. In 2002 a group of well-known software professionals got together to develop a set of industry guidelines now known as ‘The Agile Manifesto’ to help standardize this new way of managing projects which helped lay foundations to now widely used ‘The Agile Project Management methodology’. While Agile was gaining momentum, the software development world saw the rise of another way of developing software which is known as outsourcing. Outsourcing in commonly referred form involves two or more geographically dispersed teams collaborating to develop the same software. However the fusion of agile methodology with outsourcing opens up new challenges which includes cultural, geographical and time barriers. This study tries to understand how well agile works with outsourced projects using a quantitative approach. The study will also look at how factors physical distance, time and culture impact success of agile in outsourced projects using a quantitative approach. Identifying factor/factors which has the biggest impact on success of agile in outsourced project will also help identify and prioritize which principles and practices need to be fixed first. Data collected through a questionnaire was quantitatively analysed using correlation, simple and multiple regression analysis. Data was sourced from industry professionals and practitioners who had enough experience with outsourced agile projects to be able to provide insights through a questionnaire. Correlation tests, simple regression and multiple regression analysis tests between time difference, culture difference, physical distance and success of agile methodology in outsourced projects were then carried out in a bid to understand the relationship of three independent variables and the dependent variable. The study contribute towards quantitatively understanding how well agile methodology works in outsourced projects. Identifying dominant factor/factors that hinder success of agile methodology in outsourced projects also help users of agile project management to prioritize 2 the principles that should be fixed first to better fit agile methodology in outsourced projects. Using agile methods that are based on modified principles are expected to contribute to overall success of the outsourced projects. Last but not least this study identifies further research avenues towards improved work in the related area. 3 Acknowledgements I would like to acknowledge all the people who provided me with support, confidence and assistance in undertaking and completing this Master’s thesis. Firstly I would like to thank my supervisor A/Prof Bob Cavana, without whom this work would not have been possible. He provided me with valuable insights and helped me structure this research. His generosity with time, effort and feedback was invaluable. I would also like to thank all my family and friends who's always been patient and understanding throughout. I was also lucky to have two stellar proof-readers in Lalanee “the Boma” Ginige and Chamesh “Chabba” Warnakulasooriya on my side. Last but not least I would like to make this an opportunity to thank all of the participants in my study for taking time to return the questionnaire and staff at Victoria University including Megan Key, Lisa Wood and Tracey Wharakura. 4 Important Disclaimer Victoria University of Wellington and its Council, its members, staff, employees, students and agents undertake no duty or care in contract, tort, or otherwise, to users (whether direct or indirect) of the material in this thesis and make no warranties or representations of any kind in relation to any of its contents. Users of this work, whether direct or indirect, must take appropriate legal or other expert advice in relation to their own judgement and such legal or other expert advice. Under no circumstances will Victoria University of Wellington and its Council, its members, staff, employees, students or agents be liable in any way whatsoever, whether in contract, tort (including negligence), for breach of any statutory or regulatory duty (to the fullest extent punishable by law), or otherwise to any user (whether direct or indirect) of this work for any loss or damage whatsoever arising directly or indirectly as a result of the use of contents of this thesis. Each exclusion in the clauses of this disclaimer and each protection given by it are to be construed as a separate exclusion applying even if for any reason the exclusions or protections are held inapplicable in any circumstance. 5 Contents 1 Chapter One: Introduction ................................................................................................. 12 1.1 Problem statement ..................................................................................................... 12 1.2 Research Background ................................................................................................. 13 1.2.1 What is project management .............................................................................. 13 1.2.2 Project management phases ............................................................................... 13 1.2.3 What is Project management methodology ....................................................... 14 1.2.4 What is Software project management .............................................................. 15 1.2.5 What is Software development life cycle ............................................................ 15 1.2.6 Software project management methodology ..................................................... 17 1.2.7 When traditional development methods don’t work ......................................... 17 1.2.8 Agile Methodology .............................................................................................. 18 1.2.9 Offshore Outsourcing .......................................................................................... 19 1.2.10 Agile meets outsourcing – the problem .............................................................. 20 1.2.11 Vendor and Client ................................................................................................ 20 1.3 Research Objectives and Research Questions............................................................ 22 1.4 Summary of Approach ................................................................................................ 23 2 Chapter Two: Literature Review ........................................................................................ 24 2.1 Agile Method of Software Project Management ....................................................... 24 2.1.1 Agile Manifesto, What is it? ................................................................................ 24 2.1.2 Agile Practices ..................................................................................................... 25 2.2 Square peg in a round hole – problems with fusion of agile and outsourcing .......... 26 2.2.1 Culture ................................................................................................................. 28 2.2.2 Distance ............................................................................................................... 28 2.2.3 Time ..................................................................................................................... 29 6 2.3 How to measure “how well”? Project success vs. success of the project management methodology .......................................................................................................................... 34 3 Chapter Three: Theoretical Framework ............................................................................. 37 3.1 Research Paradigms .................................................................................................... 37 3.1.1 Positivist .............................................................................................................. 37 3.1.2 Interpretivist ........................................................................................................ 38 3.1.3 Post Positivist ...................................................................................................... 38 3.1.4 Critical Theory...................................................................................................... 39 3.1.5 Research Paradigm in this Work ......................................................................... 39 3.2 Cultural difference ...................................................................................................... 39 3.2.1 Hofstede Cultural Difference Model ................................................................... 40 3.2.2 Evolution of the dimensions ................................................................................ 42 3.2.3 Hofstede’s value Survey Module ......................................................................... 43 3.2.4 How does VSM work ..........................................................................................
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