This is not coming as a surprise - collocated teams are the most productive. A conscious, dedicated effort is needed just to make distributed teams work.
I have picked up this quote from the workshop Supporting Distributed Team Work [1] at the main eXtreme Programming mailing list:
"It doesn't take much distance before a team feels the negative
effects of distribution - the effectiveness of collaboration degrades
rapidly with physical distance. People located closer in a building
are more likely to collaborate (Kraut, Egido & Galegher 1990). Even at
short distances, 3 feet vs. 20 feet, there is an effect (Sensenig &
Reed 1972). A distance of 100 feet may be no better than several miles
(Allen 1977). A field study of radically collocated software
development teams, i.e. where the teammates share a large open-plan
room, showed significantly higher productivity and satisfaction than
industry benchmarks and past projects within the firm (Teasley et al.,
2002). Another field study compared interruptions in paired,
radically-collocated and traditional, cube-dwelling software
development teams, and found that in the former interruptions were
greater in number but shorter in duration and more on-task (Chong and
Siino 2006). Close proximity improves productivity in all cases."
There are a couple of conclusions I take home:
1. Distributed teams will never be as effective as co-located teams.
2. A conscious effort is needed just to make distributed teams work. That effort should include at least:
a. Mandatory collaborative tools: version control system, issue tracking system, continuous integration system, wiki, standardized IDE, , tools to support face-to-face communication (WebEx MeetmeNow);
b. Mandatory remote pair programming.
c. Mandatory, free telephone access to and for all team members.
d. All teams working using the same time zone regardless of location.
e. Mandatory use of webcams and videoconferencing.
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