How Does Agile Really Perform in Offshore Environments? A Deeper Analysis

Agile methodologies and lean approaches have rapidly grown in popularity as organizations struggled to get higher levels of value from limited resources and tight budgets. But there is …

Agile methodologies and lean approaches have rapidly grown in popularity as organizations struggled to get higher levels of value from limited resources and tight budgets. But there is ongoing debate about the appropriate level of Agile usage in offshore environments. How close do you have to be to get great performance from your Agile partner? Hear below from ThoughtWorks, Ci&T and a corporate end-user about what really matters when leveraging Agile.

Unlike traditional predictive project delivery approaches, Agile encourages short cycles, adaption and embraces the concept that requirements will change. In addition, the methodology places a strong emphasis on team dynamics, especially face-to-face communications. Adopters credit Agile with higher quality, faster delivery, better alignment with requirements, happier customers and earlier business value.

It sounds great, but no methodology is a silver bullet, including Agile. Many of the same organizations that have embraced Agile have attempted outsourcing with varying degrees of success. Now, IT leaders that want to get the benefits of both, are questioning, “Given Agile’s focus on team relationships, and unencumbered communications, is leveraging the methodology practical in an outsourcing model? “

A Bigger Risk?

According to, Gary Eisenstein President and Founder, Falcon-Software, perhaps not. Eisenstein said, “[Outsourcing] can be a viable and cost saving option. But, for creative design or complex development tasks which may not have a fully flushed out requirements specifications or project scope, the risks can sometimes outweigh the costs savings.”

Eisenstein further said, “You need to take in consideration for time zone communication complexities, cultural differences in ones interpretation of technical and requirements documentation and the ability for professionals to think outside the box when required.”

For these reasons, Falcon-Software has elected not to use an offshoring, with agile teams. Technical journals and internet blogs are filled with stories of outsourcing engagements gone bad – budget overruns, strained relationships, poor communication, excess management overhead, schedule delays – all things that Agile delivery addresses. It is logical that organizations want to magnify the business value of Agile with additional cost savings of outsourced delivery.

Leveraging nearshore firms, like those in Latin America may be a happy medium with their closer proximity and better cultural alignment to U.S. enterprises.

Many Latin American technology firms, like well-known Ci&T, have embraced Agile. Since 2007, Agile delivery has been used in 100% of Ci&Ts engagements with impressive productivity results, according to the  presentation on High Performance Teams at the recent Nearshore Nexus conference.

Using Agile with Lean, which focuses on elimination of waste, has resulted in significantly less overhead for nearshore projects using Agile instead of traditional delivery approaches. Some metrics indicate an 8% vs. 30% onsite to offshore ratio.

Other technology providers are successfully leveraging Agile from Latin America as well. Belatrix of Argentina and Peru is Agile. So is Accelerance of Argentina. But perhaps most telling, is that Agile pioneer Martin Fowler is chief scientist for ThoughtWorks and has endorsed his firm’s decision to expand in Brazil. Sidney Pinney, director South America Market Expansion,  ThoughtWorks, said, “If done correctly, distributing development to an office across town, or an office thousands of miles away makes no difference.  It’s all about the people, the process and the tools.”

While that statement should probably have an, except or an asterisk, organizations are showing that they can have success with nearshore and Agile. The overlapping time zones and increased accessibility of resources reduces many of the risks of many of traditional problems common in outsourcing arrangements.

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A Satisfied End User

Lloyd Mangnall is VP of Information Technology for VHA. VHA provides medical supply chain optimization, and through its partner Novation, engages with Costa Rican based Isthmus. Mangnall has leveraged Latin American firms to deliver solutions over the last decade in his previous roles as CTO and Corporate Director for other organizations.

Nearshore America’s asked Mangnall why he embraced Agile methodology. Mangnall said,With enterprises moving so rapidly, IT is under increasing pressure to deliver faster with higher quality. Agile just makes sense. Agile focuses on delivering early value and encourages continuous planning and feedback – instead of big bang planning up front and then hoping or pretending nothing will change. It’s just not realistic in today’s business environment. “

Although the IT leader had the option of working with U.S. based firms or traditional outsourcing vendors from India or China, in many cases he elected to work with nearshore firms commenting,I have worked Latin American firms multiple times because of the quality of their delivery. The time zone is more conducive to my normal work hours and there seems to be better cultural alignment. These are all important when working on a fast moving and tight nit Agile project.”

Organizations considering combining Agile and outsourcing, may not have a completely easy road ahead.  Given the changes in communication approaches, work style and other adjustments that must be implemented, companies could find themselves spending a lot of effort combining the two practices – if they are not careful and don’t have a clear vision.

However, when working with a nearshore team, some teams are finding that Agile techniques can result in measurable delivery improvements like reduced error rates, because of rapid feedback cycles. Organizations will have to select a partner that is willing to work closely and find a comfortable Agile rhythm that is practical for the team on the ground – no matter where that ground happens to be.

 

 

 

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