The post I created yesterday reminded me of this story:
A team I was working on was asked to sit together in a rather cramped area. Five of us (two developers, one application architect, one tester, one business analyst) were asked to share a very small area about the size of a typical office. The business analyst had desk space equivalent to the size of a typical end table; there were monitors perched precariously above us on small shelves; we shared one phone; and the limited wall space we had was covered with our visible boards and stickies. Fun!
As we reflected on our space at the end of the project, this comment was made from one of the developers: "On the bright side, I don't think I looked at the requirements document once. I just turned to the business analyst beside me and asked her what needed to be done!" Co-location for the win.
"The most efficient and effective method of conveying information to and within a development team is face-to-face conversation" - Agile Manifesto