Are You Ready To Outsource Your Agile Modern Application Delivery?

Our bi-yearly Forrester Agile survey suggests that Agile development (or simply "Agile") continues to see consistent, strong adoption. However, the same survey data shows that only a small percentage of firms are outsourcing Agile application development due to a lack of experience with the development sourcing approaches and governance models needed to make it work. Successfully outsourcing Agile development, either fully or partially, involves redefining roles and responsibilities, change management processes, metrics and SLAs, service descriptions, and other contractual elements. Merely using traditional outsourcing language and practices risks jeopardizing the benefits of Agile. There is no single way of doing this right.  

Wolfgang Benkel and I have just published the results of in-depth research conducted through extensive interviews with systems integrators that offer Agile services. Our research series, “Developing Modern Applications with Agile Outsourcing,” comprises two reports: Part 1 and Part 2. If you are currently outsourcing application development and want to leverage the benefits of Agile development and scale, read on. Also, for those of you based in Europe, DO NOT miss the opportunity to come and see our joint speech on the topic at Forrester's Forum For Technology Management Leaders in London on June 12-13.

In doing this research, we also discovered that the immaturity of Agile outsourcing is partly the responsibility of the SIs; they need to undergo their own internal transformation of skills and practices and, to some extent, move to a new business operating model (huge changes are needed in the testing area). Some of the SIs we interviewed had already undergone this major internal transformation and had retrained their workforce; others are on their way to getting there; while a few of them are just paying lip service to the concept in their marketing. Wolfgang and I will deal with this aspect of SI services maturity in a future market overview report; we will publish this later in the year, so stay tuned!.

So, what should you do if you're trying to outsource your Agile app development? In a nutshell, here are some of the takeaways from our research:

  • AD&D leaders must engage with their sourcing and vendor management teams to reduce Agile outsourcing risks.
  • As an enterprise organization, you must embrace the values and principles of Agile and Lean before outsourcing Agile; only then can you more safely think about outsourcing.
  • You must avoid the "iron triangle": Fix dates and costs but not scope in outsourcing contracts.
  • Contracts depend on sourcing models. One size does not fit all.

Our speech “Agile And Outsourcing: An Oxymoron?” at the upcoming Forrester Forum For Technology Management Leaders in London on June 12-13 will be a fun session in which Wolfgang and I will play out the everyday battles between application development (AD&D) and sourcing (SVM) professionals. We will also provide our audience with a number of solutions. We really hope to see you there; come and ask the tough questions!

Diego and Wolfgang 


More is needed than "huge changes in the testing area"

enjoyed reading about this ... and certainly agree with conclusion of huge testing changes ..

However about the agility abilities of both customers and contractors when outsourcing I've strong concerns; lack of well practiced methods and techniques, lack of truly experienced agile performers, the maturity level of agile development tools (we're not using "traditional tools are we ?" are major concerns for any company considering outsourcing.
Add to this the communication limitations - not being able to physically communicate has been, still is and will be a limitation. Digital communication/collaboration platforms are a inhibiting factor.
Interesting to see where this will go ...

Industry is getting more mature

Hi Diego and Wolfgang

We perceive the industry getting more mature and SIs and SVMs coming together, finding common ground and addressing several issues that were gridlocks in the recent past.

In our reality, we see SVMs recognizing Agile as a "different animal". We are also willing to put skin in the game and commit to throughput and productivity goals - output based contracts are a common practice for CI&T.

We are moving towards outcome based models and have several cases of business SLAs and bonuses tied to business goals. However there are cases where this is not feasible (challenges to measure exact contribution to business outcomes) and we use proxy metrics (strategic drivers adherence, business components delivered, customer satisfaction trends) to keep the team 100% aligned with the initiatives's true north.

Have a good time in London!!