The Use of Information Systems by Collocated and Distributed Teams : Towards the 24-Hour Knowledge Factory

Recent academic and policy studies focus on off shoring as a cost-of-labor driven activity that has a direct impact on employment opportunities in the countries involved. This paper broadens this perspective by examining the 24-hour knowledge factory as a model of information systems off shoring that leverages other strategic factors beyond cost savings. A true 24-hour knowledge factory can ensure that progress is made on tasks at all times of day by utilizing three or more sets of information systems professionals, located at strategically selected locations around the globe. Some organizations today utilize a service provider framework in which an offshore site provides service to the central site. Entire tasks are often outsourced to the lower-cost overseas site and sent back when completed. In contrast, the 24-hour knowledge factory involves continuous and collaborative activities round-the-clock. By organizing tasks in this manner, the 24-hour knowledge factory offers the potential to reduce turnaround time to complete tasks, to reduce total costs, and to provide better overall performance. Previous studies have examined the performance of individual teams over time and have explored the benefits of distributing work to distant teams, but have not directly compared the effect of collocation versus geographic distribution in the context of the use of emerging information system technologies and methodologies. Since the concept of the 24-hour knowledge factory is still in the early stages of practice for semi-structured tasks, a controlled field experiment was conducted using two distributed centers in which the tasks were performed in a sequential manner. The use of information systems and the overall performance were studied using a collocated software development team and a distributed software development team. While the two teams used information systems in dissimilar ways at key points during a project, the overall performance of the two teams was largely similar at the macro level but differed at the micro level. In other words, one organizational structure is not inherently superior to the other, in terms of the ability to meet stated goals. While spatial and temporal separations introduce new challenges, these can be overcome with the deployment of appropriate collaboration technologies - and even leveraged for strategic advantage. In sum, our findings suggest that firms can apply the two-center and three-center work models to transition from a service provider framework in which off shoring is a short-term and unilateral cost-saving tactic to a strategic partnership between centers in which off shoring becomes a core component of the global corporate strategy