This kind of thinking can kill an agile project before it even gets started, he says. "The very spirit of agile is to have mutual trust and respect, and a flexible relationship where you know at each decision point exactly what cost, time and feature tradeoffs you're making. That's hair-raising to some engineering leaders because they can no longer hide behind the contract."
Is 'partly agile' enough?
If you do decide to outsource an agile project, one question to consider early on is just how much of the traditional agile methodology you want to adhere to. Because working with an outsourcer will almost certainly prevent you from using a completely agile framework.
"In most cases, the outsourcing company would be using scrum as an agile practice," Adamopoulos says. "While this is fine, more and more companies are figuring out that they can use agile across a whole set of areas in the software life cycle. They might use agile in the early idea-management phase and the vetting of an idea well before requirements are even needed. It might also mean they use agile practices to develop comprehensive business cases and metrics. All of that is usually not a discipline an outsourcing company brings."
"In principle, the agile methodology says that you have a cross-functional team that is colocated. You can make decisions on the spot and you can look at things together," adds Rene Rosendahl, senior manager in the project management office at Kelley Blue Book in Irvine, Calif. The company uses an outsourcer in Beijing to provide agile development for its website KBB.com and other products. "With offshoring, you are forced to separate the product owner from the rest of the team, and you need to write things down and expect delays in decision-making. Does that mean you have to compromise some of these agile principles? I think the answer is yes. You cannot apply the principles in the same way you can with in-house teams, but you hold on to them as much as possible."
Picking the right agile outsourcer
Choosing the right outsourcing company may be the biggest part of the challenge. "Pick a partner that's really going to be your partner, not someone who'll just deliver that [statement of work] to you," advises Daryl Broddle, vice president of technology for SciQuest, an online procurement technology provider. SciQuest has used an outsourcer to do agile development for years. "I have a personal relationship with the CEO of that company," Broddle says. "He visits me once or twice a year when he's passing through. Neither company would be where it is without the other."
Perhaps most important is a willingness to face up to the profound changes that a move to agile requires. "There was one large logistics company in Europe with an outsourcing agreement with a very well-established systems integrator," Adamopoulos recalls. "The systems integrator's model wasn't helping the logistics company. It wasn't getting new features fast enough and was losing market share. Every time IT executives had a conversation with the outsourcer about agile, the outsourcer would make some minor change, but then things would go back to status quo."
The logistics company hired Emergn to train both its own team members and its contacts at the outsourcer in using the agile methodology. Once they were trained to employ agile properly, they were able to shorten the average release time for a new feature from 300 days to 47 days, Adamopoulos says. "The logistics company reclaimed about 21 million euros in revenue that year because they were able to move feature releases up 10 months. In the past year, they've also regained a fair amount of the market share they'd lost."