About four years ago, Medidata Solutions decided to switch from its traditional "waterfall" method of software development to an agile methodology. Medidata provides clinical testing solutions in a software-as-a-service model. "We made the change for all the usual reasons," says Andrew Newbigging, senior vice president of research and development. "We wanted to be more responsive to customer needs." At the same time, Medidata's IT leaders explored the possibility of outsourcing some of the company's software development. Though that might have made sense in the traditional waterfall world, they concluded that it was the wrong way to do agile.
"We do an iteration, get feedback, and iterate again," Newbigging says. "That works well for us, and we were concerned that in any sort of outsourcing approach we would lose that ability to be responsive -- and end up with a product our customers wouldn't want to buy."
It's an opinion that many industry experts share. "We have seen cases where folks were successful outsourcing agile development. But they were the exception, not the rule," says Sean Kenefick, an analyst at Gartner.
He and many other experts believe that the best way to create a pure agile methodology is to keep all development work in-house. Companies that do outsource agile development will inevitably face tough tradeoffs: They'll likely have to give up some agile principles, as well as some of the cost savings typically associated with outsourcing. And managing an outsourced agile project is likely to be more difficult than managing that same project in-house.
Nonetheless, a growing number of companies will have to face the challenge of outsourcing agile development. In a survey of more than 6,000 software developers conducted by VersionOne, which makes a tool for managing agile projects, more than 80 percent of the respondents reported that their companies had adopted agile development.
Meanwhile, the trend of outsourcing more and more IT functions continues. According to Gartner's IT Outsourcing Forecast, outsourcing expenditures worldwide grew 8 percent from 2008 to 2011, and will grow an additional 6.6 percent in the next two years. Judging from those statistics, it's clear that at least some agile development projects will be outsourced.
The case against outsourcing agile
Why is it so rare for an outsourcer to successfully deliver agile development? Consider that agile development is always challenging, even in-house, with everyone at the same location. "It requires a huge amount of discipline and cultural change, and a lot of buy-in from the group, from the lowest-level person to the highest executive," Kenefick says.
Even a company that is successfully using agile may find it hard to maintain, he adds. "It's a very delicate balance. I've seen a situation where everyone was working in a bullpen and the developers wanted their own offices. That change was enough to disrupt the agile process. Just by moving a function from one side of a room to another, you make something difficult even more difficult. If you outsource it and take it to another company, you've made it that much harder."