Disciplined Agile Outsourcing: Making it work for both the customer and the service provider

Disciplined Agile Outsourcing:Making it Work for Both the Customer and the Service Provider

Scott W. AmblerSenior Consulting Partner

scott [at] scottambler.com

@scottwambler

© 2015 Disciplined Agile Consortium

Agenda

• Some Housekeeping• Agile and Outsourcing? Really?• Disciplined Agile Delivery (DAD)• Common Agile Outsourcing Pitfalls• Intuition Fails You• Disciplined Agile Outsourcing Strategies• Parting Thoughts

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• Everyone is on mute

• To ask a question, please submit it into the chat box

• Periodically I will stop to see what questions have come up

• It is likely that I won’t get to all of your questions. In that case I will soon post a blog at DisciplinedAgileDelivery.comanswering them

© 2015 Disciplined Agile Consortium 3

For the Certified Disciplined Agilists among us…

This webinar counts as one hour towards your education timeto maintain your certification

See DisciplinedAgileConsortium.org/certification for details


The Survey Results Shared in This Presentation

• All surveys were performed in an open manner

• The questions as they were asked, the source data, and a summary slide deck can be downloaded free of charge from Ambysoft.com/surveys/


Some Assumptions

• For the most part I’ll be speaking from the point of view of:– A customer in North America or Europe– A project being outsourced to an Indian service provider

• But, I will still cover:– The service provider perspective– Outsourcing in general, not just offshoring



Agile and Outsourcing?Really?

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Why Agile Outsourcing? Customer’s Viewpoint

• Augmenting their ability to deliver• Better, faster, cheaper IT delivery• Want similar or better quality than what their own

IT people would deliver• The solution must work in their environment


Why Agile Outsourcing? Service Provider’s Viewpoint

• Increase business• Deliver what was promised• Reduce development costs• Retain staff


BUT….


We’re not sure the service provider can work in an

agile manner

The customer’s procurement process forces us into a more

traditional approach

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The IT Outsourcing Market in General

• Gartner’s 2013 IT Outsourcing Forecasts– IT outsourcing estimated to be $288 Billion in 2013– IT outsourcing forecast to grow by 5.9% compounded annually from

2013 through 2018

• Deloitte’s 2014 Global Outsourcing Survey:– 53% of organizations are outsourcing some of their IT function– 26% of respondents who do not outsource today plan to– 79% of respondents DO NOT believe their service providers are too

expensive– 49% of respondents say their service providers are reactive vs proactive– Outsourcing activity is expected to increase


Half of organizations who are “doing agile” are also involving outsourcing in some way


Source: 2013 Agile Outsourcing survey

Why is your organization outsourcing?(Multiple selections allowed)

3%

6%

9%

9%

16%

19%

19%

34%

69%

No IT department

Business frustrated with quality

Business frustrated with value delivered

Experimenting with outsourcing

Internal IT focuses on new technologies

Business frustrated with schedules

Lack of IT experience technologies

Business frustrated with IT cost

Short of IT staff


Source: 2013 Agile Outsourcing Survey

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In general, how well do the outsourcer(s) hit their targets?

0% 10% 20% 30% 40% 50%

Produce High Quality

Reduce Time to Delivery

Improve ROI

Improve Stakeholder Satisfaction

Greatly Agree Agree Neutral Disagree Greatly Disagree



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Common Outsourcing Pitfalls

• Organizational culture differences• Expectations mismatch between the customer and the service provider• The customer underestimates difficulty of managing outsourced projects• Total cost of the solution isn’t considered• Total value of the solution isn’t considered• Transition to the operations team is mismanaged• Over-reliance on documentation• Software licensing issues• Learning curve for service provider underestimated• The service provider is understaffed• Some aspects, e.g. security, cannot be outsourced• Intellectual property (IP) rights• Technology connectivity• Solution doesn’t fit into organizational ecosystem



Ad Hoc

Traditional

Agile

Iterative

48%

55%

55%

59%

65%

69%

73%

74%

72%

73%

79%

80%

62%

66%

70%

71%

AverageCo-locatedNear LocatedFar Located

Success Rates Fall as Geographic Distribution Rises

Source: 2009 IT Project Success Survey16

Common Agile Outsourcing Pitfalls

• The customer procures the “agile” project via traditional strategies

• The customer takes a Water-Scrum-Fall approach• The customer governs the service provider via a traditional

approach• The customer really isn’t agile• The service provider really isn’t agile• Neither are agile • Agile is based on trust, yet it behooves you to not trust the

service provider


Common Geographic Distribution Pitfalls

• Communication challenges• Time zone differences• Cultural differences• Customer unwilling to invest in travel


Disciplined Agile Delivery (DAD) is a process decision framework

The key characteristics of DAD:– People-first– Goal-driven– Hybrid agile– Learning-oriented– Full delivery lifecycle– Solution focused– Risk-value lifecycle– Enterprise aware


High Level Lifecycle

The DAD framework supports 4 delivery lifecycles – Choice is good!DisciplinedAgileDelivery.com/lifecycle/


DAD is Goal-Driven, Not Prescriptive


Intuition Tells You To…

1. Negotiate a fixed price2. Follow a comprehensive procurement

strategy3. Save money through travel reduction4. Define detailed requirements up front5. Have long iterations6. Manage remotely7. Adopt artifact-based “quality gates”8. Perform acceptance testing at the end9. Hand-off the solution to your team at the end10. Outsource things you’re not good at11. Keep Inception and Transition in-house


But It is Much Better To…

1. Procure an agile team2. Adopt variable funding3. Travel at key points throughout the project4. Evolve requirements throughout the project5. Have short iterations6. Collaborate closely7. Govern agilely8. Test throughout the project9. Have a gradual hand over10. Succeed locally first11. Actually outsource the work


Procure an Agile Team

The biggest single source of risk in agile IT outsourcing is the customer’s procurement process

• Our advice:– Involve people in the procurement effort with actual

experience in disciplined agile strategies– Make it very clear at the beginning that you are looking for

agile-experienced teams– Explicitly describe how your team and the service provider’s

team will work together


Strategy: Adopt Variable Funding

• Lowers financial risk and offers a greater chance of project success• Requires greater project governance


A fixed price contract is the riskiest way to fund an IT project

Strategy: Travel

• Get key people together physically:– During Inception for initial modeling and planning– Key project milestones, particularly project viability reviews

• Throughout the project:– “Ambassadors” fly between sites to improve communication– Consider bringing key developers to the customer site to observe the

actual work environment and to interact with real stakeholders– Consider flying key stakeholders, or proxies, to the development site

• Reduces communication risk on your project– BUT, travel costs are easy to measure therefore are first to be cut

The cheapest way to pay for travel is to actually pay for travel


Strategy: Evolutionary Requirements

• The challenges with detailed requirements specifications:– Documentation is the least effective way communicating information– A “big requirements up front (BRUF)” approach has been found to lead

to the development of functionality that is unused (45% average) or rarely used (19%) – Chaos Report 2003, Standish Group

– You still have the CRUFT dilemma (see AgileModeling.com)

• Disciplined agile teams will:– Produce a high-level definition of the scope– Explore detailed requirements on a just in time (JIT) basis throughout

the project– Allow the requirements to evolve as the stakeholders understanding

evolves– Acceptance test throughout the project


Strategy: Short Iterations

• Long iterations generally lead to mini-waterfalls, which in turn brings on many of the inherent risks of traditional development

• Shorter iterations:– Require the development team to work in a very

disciplined and efficient manner– Provide more opportunities for visibility into what’s

actually being produced, thereby enabling better governance by the customer

– Require the customer to be actively involved with the project

Adopt iterations of one or two weeks in length at maximum


Strategy: Collaborate Closely

• Observation:– It is critical for agile teams in general to have ready

access to stakeholders or stakeholder proxies (such as Product Owners)

– It is incredibly difficult for service providers to learn your domain, your existing IT ecosystem, and your organization structure

– It is even harder to do so from the other side of the planet

• Recommendations:– All types of stakeholders, on both the business and IT

side, need to be available on a daily basis at least electronically

– Consider embedding key stakeholders (or proxies) with the development team


Strategy: Govern Agilely

• Observations:– The motivations of service providers are different from

those of customers– Customers really shouldn’t trust the service provider

• Recommendation:– Trust but verify– Embed one or more of your people with the development

team– The service provider should adopt tools which support

development intelligence (DI)– The customer should have live access to DI project

dashboards– The service provider should include code analysis tools as

part of their continuous integration (CI) strategy– Progress should be judged on the basis of regular delivery

of a consumable solution


Strategy: Test Throughout the Project


Iteration N Iteration N+1

Parallel Independent Testing

Working build Defect reports

The development team adopts a whole-team testing strategy, ideally taking a test-driven development (TDD) approach.

In parallel, the customer’s test team performs exploratory testing, pre-production system integration testing, acceptance testing, and so on.

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Strategy: Gradual Hand Over

• Observations:– Hand-over of the solution, for operations and potentially continued

development, is very risky– Documentation is required to support this, but is a poor way to

communicate

• Recommendations:– Co-locate key members of the sustainment team with the development

team later in the lifecycle– Have key members of the sustainment team be actively involved with

acceptance testing aspects of independent testing


Strategy: Succeed Locally First

• Observations:– Outsourced projects are generally higher risk than local projects– Outsourced projects generally require greater skill to manage and

govern

• Harsh question:– If you’re struggling to succeed when the development team is “down the

hall” from you, what makes you think you can succeed when the development team is on the other side of the planet?

• Recommendation:


Strategy: Actually Outsource the Work

• Observations:– With offshoring, the expensive people work for the customer

organization– The service provider should have greater expertise at IT delivery than

you do (if not, why are you working with them?)

• Recommendation:– If you’re going to outsource, then outsource– Put as much of the work into the hands of the service provider as

possible– Reduce as much of the customer work as possible– The customer still needs to initiate and then govern



Agile Development Practices for Outsourcing

• At a minimum:– Continuous Integration (CI)– Developer regression testing– Parallel independent testing (by the customer)– Short iterations– Development intelligence (automated dashboard)– Co-located Product Owner

• Additionally:– Continuous Deployment (CD)– Acceptance Test Driven Development (ATDD)– Developer Test Driven Development (TDD)


When Disciplined Agile Outsourcing Makes Sense

• You are already successful at insourced agile• You understand and accept the risks

involved with outsourcing• You are prepared to address those risks


What is the current status in your organization regarding agile and outsourcing? (Single selection)

Didn't work well, giving up

Don't know

Didn’t work well but still trying

Starting to reshore and bring work…

Works well, going to continue

Too early to tell

Works well enough, going to continue

0%

3%

8%

11%

14%

22%

42%



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Announcement: Introduction to Disciplined Agile Delivery has arrived!

• 102 pages

• Available at Amazon.com– $16.99 for paperback– $9.99 for Kindle edition

• Coming soon to the International Amazon sites


Thank you – Questions?

• Scott Ambler + Associates– ScottAmbler.com– [email protected]

@scottwambler

• Disciplined Agile Delivery: A Practitioner’s Guide, by Scott Ambler & Mark Lines

• Introduction to Disciplined Agile Delivery: A Small Team’s Journey, by Mark Lines and Scott Ambler

• DisciplinedAgileDelivery.com• DisciplinedAgileConsortium.org• DAD LinkedIn Discussion Group:

– linkedin.com/groups/Disciplined-Agile-Delivery-4685263

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Shuhari and Disciplined Agile Certification

At the shu stage you are beginning to learn the techniques and philosophies of

disciplined agile development. Your goal is to build a strong foundation from which

to build upon.

At the ha stage you reflect upon and question why disciplined agile strategies work, seeking to understand the range of strategies available to you and when they

are best applied.

At the ri stage you seek to extend and improve upon disciplined agile techniques,

sharing your learnings with others.


Disciplined Agile Delivery (DAD)

Disciplined Agile Delivery:The Foundation for Scaling Agile


Scrum LeanKanban

Unified Process Agile Modeling

And more…“Traditional”DevOps

Team SizeGeographicDistribution

Compliance

Domain Complexity

TechnicalComplexity

OrganizationalDistribution

Team CultureOrganizational

Culture

DAD leverages proven strategies from several sources,providing a decision framework to guide your adoption and

tailoring of them in a context-driven manner.

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Scott Ambler + Associates is the thought leader behind the Disciplined Agile Delivery (DAD) framework and its application. We are a boutique IT management consulting firm that advises organizations to be more

effective applying disciplined agile and lean processes within the context of your business.

Our website is ScottAmbler.comWe can help
