Outsourcing | August 8, 2017
Agile Outsourcing Increases the Efficiency of IT Projects
Agile Manifesto requirements have gained substantial popularity among IT service providers, and are increasingly being adopted willingly in industries other than IT. Another area in which Agile methods have brought about plenty of positive changes is in IT outsourcing – the Agile approach helps to facilitate, among others, the integration of external employees into an organization’s own project teams, and the scaling of outsourcing services.
Rising competitive pressures, a reduced product lifecycle and technology-driven changes in business processes have significantly limited the ability to explicitly specify the scope and objectives of IT projects. This makes the classic transactional approach, in which the customer and the service provider sign a contract for the delivery of a particular service (usually software or outsourcing services), usually at a fixed price, anachronistic and therefore increasingly difficult to apply. The initial detailed project assumptions in the contract at the beginning of cooperation will probably be outdated after just a few months of development work.
Agile outsourcing solves the problems of recruiting IT professionals
Agile management helps to rise to the challenges of the market – short sprints and iterations, which end up with the provision of a functioning part of the software and checking that it is done in line with the customer’s expectations, lessening the risks inherent in project development. With the Agile approach, changes in the project are programmed into the service delivery process, in order that they do not disrupt workflow, which is a common problem with traditional waterfall approaches.
Agile methods break down barriers in the form of differences in corporate culture, making collaboration between organizations much easier and more effective. “Agile is to IT outsourcing services what English is to the business world – it’s a community of organizations that blurs the boundaries between companies regardless of their geographical location: we all speak the same language, we use the same concepts, we work the same way, we know the same rules. The concepts of sprints, daily meetings, and scrum masters mean the same everywhere. An outsourced worker does not land at a new client’s premises like an alien from another planet. With Agile, everywhere feels like home” – says Piotr Zyguła, CEO of JCommerce. “The Agile approach in software development processes allows us to easily become part of the customer’s organization.”
Agile IT outsourcing also enables service scalability – the customer can be flexible in customizing the number of employees to match the skills they need at that particular point in time. This is a significant change, because under the classic approach, the time it takes to bring a new IT specialist on board (from the time when the need to find someone is noted, through the recruitment and onboarding processes, to the point when the new employee becomes a productive staff member) is very long, and in the face of the shortage of programmers on the market, is further encumbered by the risk of failure.
IT outsourcing ensures cost flexibility, which has traditionally been one of the most commonly advanced arguments in its favor. At present, the issue of cost is raised more and more by big business executives; IT outsourcing is increasingly seen as a way to provide organizations with innovative technologies and solutions that are emerging from among startup environments, as well as individual enthusiasts of modern technology.
Outsourcing in the Agile model
People and interactions over processes and tools. Agile outsourcing strongly emphasizes the role of transparent communication, because cooperation in this model requires a lot of trust on both sides. Employees sent to the client by the outsourcer expect a degree of independence, respect for their ideas and participation in decision-making. The customer expects professional service, results and the fulfillment of their business needs. These expectations complement one another, but only open and efficient communication can ensure that they stay aligned during the project.
Results over bureaucracy. The goal of outsourcing services is to provide specific business benefits. Creating reliable documentation is of course important from the point of view of the project; however, it will never be more important than delivering working solutions, fixing problems which may emerge, or tailoring the project to the changing needs of the client.
Cooperation is more important than a detailed contract. Instead of creating a contract based on a list of specific requirements, it is worth asking the outsourcing partner for a proposal for how to deliver a particular service, and then negotiating the terms based on that. This is an excellent starting point for creating an outsourcing contract that should not be treated as a rigid plan for the implementation of the project. A good outsourcing contract will maintain flexibility while also safeguarding the fundamental interests of both parties.
ING Bank (ING Bank Śląski) owes its performance to Agile outsourcing
ING Bank Śląski has a great deal of experience in IT outsourcing in the Agile model, building the entire organizational structure and methodology of working on Agile principles.
“Collaboration in the Agile model should primarily guarantee open communication and enable the application of Agile approaches in practice. Openness, commitment and having the courage to communicate are key qualities in achieving success. Transparency is also important, as is the willingness to understand that what was important at the beginning of cooperation or at a particular moment in time can change – just like the measures of success. It is therefore important to maintain an Agile ‘inspect & adapt’ approach” – says Seweryn Papierz, Senior Agile Coach in the Agile Transformation Support Team at ING Bank Śląski.
Responding to changes is more important than implementing plans. In the case of the Agile model, both parties to the outsourcing contract should be aware that the goal is to achieve tangible benefits and fulfill customer needs, which are dynamically changing in today’s world. Such cooperation cannot be implemented on the basis of calculations adopted at the beginning of cooperation; reaping the benefits of a flexible model of cooperation with the outsourcing partner requires a flexible approach from the client’s side.
Agile outsourcing – where to start
The largest beneficiaries of IT outsourcing in the Agile model will be organizations that already operate according to these principles. In such companies, the use of outsourcing services is an extension of operational strategy.
For organizations with no Agile experience, it is worth considering a simplified approach – otherwise the Agile management model may encounter resistance from employees.
The best option in this situation may be Talent Leasing (i.e. outsourcing in the team extension model), meaning hiring an employee who already has experience in Agile methodology. This person will complement the existing team of IT specialists and allow them to gradually adapt to the new organizational culture. The number of outsourced workers can later be adjusted to the needs of the client. The result will be the transfer of knowledge, experience and the ability to operate according to Agile principles, as well as the gradual preparation of employees for cooperation on projects with employees of external companies.