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Agile And Outsourcing Product Development. Get It? Else, Forget It!
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Agile And Outsourcing Product Development. Get It? Else, Forget It!

By Syed Zainul Haque October 14, 2019 - 1,879 views

In today’s world, Agile methodology and outsourcing product development are hot topics. The beginning of the 90s witnessed the starting of outsourcing product development. Companies jumped at the opportunity to save bucks by hiring top talents at reasonable rates. Agile methodology, when infused later in the 90s, became the cherry on the cake. 

Agile is a well-known methodology and most development teams prefer it. It all started in Oregon in the spring of 2000. A group of seventeen software professionals got together to talk about how they might shorten development periods and get new products to market faster. 

We have studied the scaling up of the Agile method at most companies, including small firms. Larger companies like Spotify and Netflix were born agile and have become more so as they’ve grown. Also, big shots like Amazon and USAA (the financial services company for the military community), are already in the transition from traditional hierarchies to more-agile enterprises.

The CollabNet VersionOne 13th annual State of Agile Report shows a 71% increase in project cost reduction as a primary reason to adopt agile. There was also a 27% increase in “Project Cost Reduction” as a reported benefit of implementing agile. 

Additionally, there was a 74% increase in accelerated software delivery from which we can easily conclude that the talent pool became smarter than ever.

What is outsourcing software product development?

Software product development outsourcing means assigning a third-party company for a particular or all operations linked to a product’s development and maintenance. 

The outsourcing vendor provides necessary skills and resources for providing solutions during the product development lifecycle. 

Is it possible to implement Agile in outsourcing product development?

Many experts had a misconception that the Waterfall approach is the only feasible option in product development outsourcing. Customer satisfaction is a top priority for the Agile method, which aims to accomplish it by delivering software or solutions early and frequently. 

Usually, Agile methodology uses practices like:

  • DevOps
  • Scrum
  • Crystal
  • Extreme Programming 

However, while outsourcing, implementation of Agile methodology can be challenging. But it’s not impossible either! After all, overcoming challenges will help you achieve success. 

Challenges in implementing Agile in product development outsourcing 

As we discussed earlier, following Agile methodology can be challenging while outsourcing. So, here are a few challenges that you may face:

Insufficient Agile Experience

Does your outsourcing vendor follow Agile methodology? This is the first thing that you need to ensure. Due to its growing demand, many IT outsourcing companies are adopting Agile methodology. So, try to choose an outsourcing vendor that follows the Agile way. 

The absence of a team structure

Teamwork is an integral part of Agile methodology. It requires cross-functional teams to collaborate to provide outcomes to the end client. Assigning software development to individuals can obstruct the Agile way. Because a single person cannot collaborate in the same way as a team.

So, make sure to assess the teams of outsourcing vendors. And find out whether they are compatible with Agile or not. Focusing on groups rather than individuals might assist you in developing a network that allows you to remain flexible.

Not having clear communication

The Agile method is largely reliant on open, continuous communication. So, managing an outsourcing team might be difficult.

One of the most efficient methods to tackle this problem is through email or video conferencing. Besides, you can schedule a few team visits every year to better connect with your offshore development team.

We are trying to figure out how to transition from our regular, current cubicle kind of workspace to a more collaborative workspace,” Rajesh Gopinathan, CEO at TCS, tells ET Magazine.

Source: Targetprocess blog

Why might this be?

What led to the rise of the agile manifesto is that people slowly started to realize that the waterfall approach they’ve used with their outsourcing vendors is not that great after all. Fixed price contracts stopped making sense as they do not guarantee real value. The more labor is outsourced to other countries, the higher are the costs. Hence, the main point for outsourcing which is cost-saving loses its foothold.

There’re other even deeper-lying consequences. On one hand, the country which outsources – or businesses in this country, not the country itself – they save bucks but lose in the long run as they do not grow their own engineering minds, let alone all the problems that you have working with remote teams – yes, we have all this telecom and internet in place, yet face-to-face communication is irreplaceable. If you often go on business trips to the outsourced destination to talk to your team – again, it’s more costs. Well, the crux is not about how good or bad outsourcing is.

The companies which outsource on the other hand – have legacy outsourcing teams. They need to get going as well, to stand up to all the funds they’ve already invested in their outsourcing partner.

Agile adoption at INT.

80% of the projects of INT. in FY2020 are classified as Agile. The remaining 20% are the projects whose life cycles are highly predictable. In such cases, the client was clear of the feature set and scope. Eventually, it led to the outcome being divided into a known set of deliverables. These projects usually follow the traditional Waterfall model.

Scrum framework adoption at INT.

A major chunk of Agile projects at INT. use a Scrum framework. Those Agile projects that do not follow Scrum are typically small (<5 persons). In those teams, the Scrum framework can become a ‘heavy’ process load. In such cases, lighter processes surrounding agile processes are followed.

Client Process Adoption at Indus Net Technologies (INT.).

Process adoption before working with INT:

  • 31% had a full process in place at the project start
  • 25% had a partial process in place at the project start
  • 46% had no process in place at project start

Process adoption after working with INT:

  • 75% had a full process in place
  • 14% had a partial process in place
  • 11% still do not have a process in place

Clients with a process:

Of the clients who have a process in place, 68% use an agile process of this group:

  • 80% prefer Scrum
  • 20% use Waterfall

With all this outsourcing in our hands – what do we do?

As an agile outsourcing product development partner, you should be ready to invest a lot of time. Also, you need to give a lot of effort in educating your new customers on agility and building a solid relationship.

This might be a very difficult task since some people want to stick to good old fixed-price bids and other “joys” of classical outsourced development.

At INT., we believe and have shown Agile methodology and outsourced software development can be a good collaboration. There are enormous benefits that can result in terms of customer and product success.