The Practical Intelligence of Project Managers and Project Success in Software Development Offshore
Outsourcing
Nishtha Langer, Indian School of Business
Sandra Slaughter, Georgia Institute of Technology**
Tridas Mukhopadhyay, Carnegie Mellon University
** presenter
Abstract
Many firms are outsourcing their software development projects to external vendors. Such projects can
involve building new software applications or maintaining existing applications. From the perspective of
both the vendor and the client, the allocation of the right person to lead a project is very important. Poor
project management can lead to project failure and can also jeopardize client relationships. At the same
time, selecting the right person to lead a software project is very challenging, especially for large
software vendors who have access to a myriad pool of talent and a divergence in projects.
In this study, we draw upon the literature on software project management, human resource
management and theories of alignment or fit, to develop a model matching project characteristics with
project managers’ skills and project outcomes. We consider two major types of project manager (PM)
skills: task familiarity and practical intelligence. Task familiarity refers to a PM’s experience with the
technical aspects of a project including the domain, technology and methodology. We conceptualize the
PM’s practical intelligence drawing on the work of Wagner and Sternberg, and use the critical incident
methodology to assess a PM’s ability to manage and coordinate tasks, self, career, peers, subordinates,
superiors and clients. We theorize that while both task familiarity and practical intelligence are critical for
project success, higher levels of practical intelligence will be especially beneficial in software projects that
are large, complex or uncertain, or where there are low levels of team familiarity or client familiarity.
To evaluate our theoretical model, we collected and analyzed detailed archival data on 530 IT projects
from a leading IT vendor. We also collected critical incidents from the 209 PMs leading the projects to
evaluate their levels of practical intelligence. Our findings indicate that, after controlling for project
characteristics, PM task familiarity, and team attributes, PM soft skills have a significant favorable impact
on project outcomes, including project cost performance and client satisfaction. This is an especially
important finding in the case of software development outsourcing projects, where both project costs and
client satisfaction can be important determinants of vendor market share. We also find that higher levels
of PM task familiarity improve project performance but the impact is less than that of PM practical
intelligence. Finally, we find that higher levels of PM practical intelligence are especially valuable for
managing larger projects (in terms of team size and project size) and when team familiarity and client
familiarity are low.
This study makes a new contribution by identifying the project performance effects of PM practical
intelligence. It is the first study to link PM practical intelligence to project performance. Our research also
reveals that PM practical intelligence is even more valuable for certain types of software development
projects. Given the complex and dynamic environment of software development offshore outsourcing, our
results suggest that firms can assign PMs with greater practical intelligence to their more challenging
projects to help improve project outcomes.