As we move to what Forrester calls ‘The Age Of The Customer,’ enterprises will need to reinvent themselves to systematically understand and serve increasingly powerful customers, we are seeing a notable shift in what the business expects from IT. IT requirements are increasingly being influenced by the business leader who wants technology to not just enable efficiencies but to also provide an edge over competition by helping to develop things like new marketing and sales channels, and applications that provide greater insights on buyer behavior and what influences them.
By 2020, we anticipate that evolving customer expectations will open up tremendous opportunities for businesses, but at the same time, they will evolve so rapidly that businesses that are unable to keep pace will face the threat of extinction. Therefore, the need of the hour is for speed. Getting software products and services to market quickly, cutting product development costs, while continuing to maintain high standards for flexibility, nimbleness, and time-to-market – this is leading to a tremendous increase in interest around Agile development.
Many organizations have already adopted Agile to some extent within their organizations. According to Forrester’s Forrsights Developer Survey Q1, 2013, 19% of developers stated they use Agile (Kanban, Scrum, TDD, XP). However, most of these initiatives are primarily in-house – Forrester’s Agile Survey Q3 2013 showed that the majority of organizations continue to use Agile more widely in-house, than with systems integrators.
However, we see a growing interest among customers in working with an SI on Agile engagements that leverage their offshore presence. More often than not, the supplier’s agile coaching and training facilities are being used to facilitate the move to an Agile mindset at the clients’ IT organization before graduating to a distributed Agile model, where team members are in physically distant locations. The Agile Survey Q3 2012 also found that about three-quarter of the respondents use Agile teams that are distributed across time-zones, with many relying heavily on offshore resources of their partners.
The key advantages of using an offshore partner on Agile engagements include:
- Access to specialized talent. Using an offshore vendor provides the obvious advantage of labor arbitrage and the ability to leverage a “Follow-the-Sun” approach which utilizes the time differential to speed up development.
- Ability to leverage supplier’s training capabilities. Clients are advised to leverage the Agile training and consulting capabilities of their suppliers to build internal expertise and familiarity with Agile methods and tools. Test the waters with small scale, pilot projects before moving to a larger non-colocated engagement.
- Ability to wed Agile principles with process expertise. Offshore vendors have spent decades building up process expertise. By partnering with vendors clients can marry these optimized processes and the related tools, frameworks, solution accelerators, and platforms with Agile principles to come up with hybrid models that can meet their specific requirements.
Most of the offshore vendors are making substantial investments to develop their Agile capabilities. For instance, Infosys has spent around $1.5mn on tooling, communication infrastructure, and training to support their Agile offerings. Similar investments are also being made by other large vendors like Cognizant, HCL, TCS, and Wipro. Surprisingly, the midsize vendor segment also demonstrated a very good understanding of the Agile philosophy and are making serious investments around training, tooling, and talent retention to support their Agile offerings. Although they are not very vocal about it, most of the midsize vendors deliver nearly a third (or more, in some cases) of all development work by leveraging Agile methodologies and many have also devised extremely creative and flexible pricing and delivery options that go with this.
The report Offshore Agile Comes of Age takes a look at the current Agile capabilities of offshore vendors, provides sourcing professionals with actionable insights on the factors that affect the success of distributed Agile endeavors, and lists key elements to look for in your Agile partner.