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Collaboration maturity and the offshoring cost barrier: the tradeoff between flexibility in team composition and cross-site communication effort in geographically distributed development projects

This paper analyzes how total project costs are split into operative costs and distribution costs. This split depends on the collaboration model being applied and the level of maturity of the collaboration. The lower the collaboration maturity, the more significant the so-called offshoring cost barrier, i.e. the resources and time needed to progress toward more cost-effective forms of collaboration. The low-cost offshoring problem is stated as a cost optimization problem, with customer requirements and internal requirements as boundary conditions. The more degree of freedom is available for project team composition, the better the result will be. The project team composition is always a trade-off between including the best available experts from different sites and the corresponding communication and coordination problems.