Motivated by the desire to cut costs and development effort, software organizations have increasingly adopted a global development approach. However, the cost savings, if any, from this globalization, is often offset by hidden costs such as handoffs between sites, synchronization of development among sites, integration of software developed at distributed sites, language/cultural issues, travel costs, communication costs, etc. Although several empirical studies have been conducted on this issue, due to the lack of an integrated formal model, such studies have not produced consistent and usable results. To that end, in this paper, we present an integrated formal model for analyzing global software development. Our model comprises two parts. First, we consider all tasks in a software project that can be geographically distributed, and the possible sites where they can be allocated. We develop an optimal task-site allocation model. Our approach then generates an effort estimate for the new allocation, which is based on the following factors: expected general percentage allocation of overall effort estimate to each task in the development lifecycle, and effort estimate for executing a task at a particular site (in terms of the effort estimate for executing the same task at the home site, viz., without globalization). The final effort estimate is therefore derived as a function of the effort estimate for executing the overall software project in the home site; this estimate provides project managers with a more accurate understanding of expected cost savings from globalization, if any. Throughout our paper, we illustrate our approach using a real global software development project at IBM as a running example
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