Introduction to the concept of agile nearshore outsourcing.
The combination of agile processes with nearshore outsourcing offers a lot of benefits. This presentation explores the basic ideas of agile and nearshore outsourcing and how both approaches can be combined.
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Agile Values – Agile Manifest
Manifesto for Agile Software Development
We are uncovering better ways of developing software by doing it and helping others do it.
Through this work we have come to value:
Individuals and interactions over processes and tools
Working software over comprehensive documentation
Customer collaboration over contract negotiation
Responding to change over following a plan
That is, while there is value in the items on the right, we value the items on the left more.
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Scrum Values
Openess (eg. in the retrospective)
Respect (eg. trust the team)
Focus (eg. team: Focus on the sprint goal, get not
distracted. PO: Select the most important stories.)
Commitment (eg. Keep your promises)
Courage (eg. Have the courage to decide, not to accept
bad work, keeping your estimate)
7. Time to market, more flexibility, cost reductions and
external know how
Nearshoring
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Definition: Nearshoring
Europe eg. Asia
Germany eg. Ukraine eg. Vietnam
Same building /
location.
Inhouse Onshore Nearshore Offshore
Onsite
Continent own Resources of a
resources external provider
Country
Source: IT-Near- und Offshoring in der Praxis (Nicklisch, Borchers, Krick, Rucks), Page 5
9. Inhouse Offshore Nearshore
Costs are well known Significant cost reduction Significant cost reduction
possible: Low labor costs, high possible: Low labor costs,
transaction costs medium transaction costs
Everybody shares similar Cultural differences exist Less cultural differences, team
Culture (cultural backgrounds) culture usually dominates
Interaction: Developer teams Developer teams are far away Developer teams usually can be
work on-site or close by and visiting them requires a lot visited in one business day
of time and money (including return flight)
Same Rhythm Some regions do have huge time Only minor time zone
zone differences, coordination differences, same rhythm can be
gets more complicated established
Less Flexibility because all High flexibility, high variance of Highly flexible for standard
resources are fully allocated to quality of the assigned technologies
save costs developers
Everybody speaks the same Depending on country English is English, Russian, some German,
Language (...) well established as second French
language
Legal security Depending on the country there Legal systems are quite similar,
might be huge legal ramifications sometimes under EU law
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Nearshore Outsourcing
Reducing Time to Market
Flexible developer resources with special skills
Significant Cost reduction possible, risks shared
Very good Education and know how
Only minor Cultural differences
Good language skills, English as second language
Experienced providers, customers from the US
Success rate using Nearshoring is higher then with
Offshoring
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Nearshoring – What to take into
consideration?
WHAT: Outsource the right tasks and processes
Not every project and component can be successfully outsourced. Some issues to take into consideration:
Data privacy and intellectual property (Data and know how)
Degree of specialization & Dependencies between software systems and interfaces
Coordination effort
WHO: Chose the right partner
For the decission whether distributed development is possible the following issues should be taken into
account:
Know how of the development team & Experience and willingness to work based on agile principles
Communication: Speaking the same language and allow intensiv cooperation between teams
Compatibiity between Processes of customer and provider (dev team)
Legal security: Minimize legal risks
HOW: Be prepared and gain experience
Before starting there should be project plan and a vision how to work together
Be well prepared before starting a major project.
Start with a Pilot project - Gain experience and learn from that
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Risks
“Outsourcing, when not managed properly, can be a
dangerous and dare I say, deadly business. There are plenty of
well documented near death experiences of outsourcing
initiatives that ended in complete disaster fo both parties.”
Nick Krym, Pragmatic Outsourcing
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Risks
No real partnership
If one side dominates the relationship problems will arise quickly.
Communication problems
Missing open communication is a major risk. Language barriers.
Interpretation of „Agile“
Tranferring the agile values and principles to the project reality. A lot of experience is required!
Dependency on the service provider
Absolut dependency should be avoided since you may lose flexibility
Assembling the Team / Team Members
A „bad“ team can‘t meet the expectations. Invest into senior members.
Cost increases & Attrition rates
Missing transparency of costs, wrong assumtions and high attrition rates are major risks.
The overal costs can be higher as expected due to process costs (communication, management)
and lower productivity.
Law & Contract
Risks must be shared equally.
Software Engineering Risks
Even cheap rubbish is too expensive to buy.
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Horror Stories
“I stopped a development project by a team of five ‘very senior’
offshore engineers after 3 months due to quality issues. Two
months later the project was completed by one in-house resource.”
Nick Krym, Pragmatic Outsourcing
“We stopped a development project being delivered by an offshore
senior developer and several mid-level ones due to quality and
productivity issues. A single mid-level in-house developer later
delivered the project with oversight from a senior developer in less
time than it took us to ramp up the team in Bangalore.”
Nick Krym, Pragmatic Outsourcing
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Success Factors
Partnership
Relationship between Customer and Provider is like a marriage
Business case exist, responsibilities are clarified
Openness & Trust
Communication
Continuous open communication
Close customer interaction, customer is available for answering questions
Focus & Reduced Complexity
Engineering Practices
Using industry best practices and standards, getting things done
Unit testing / Test Driven Development, Continuous Integration, Configuration and
Release Management
Agile Values and Processes are used in daily work
Minimizing Risks
Short iterations with usable increments, reviews with the customer. Customer gets
business value (usable software) while the project is running.
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Best Practices & Tools
Visits / Co-Locating
At least key players must know each other in person and have met
several times. This helps creating trust.
The more meetings in real – the better the results (worth the
investment of time and money)
Hint: Meetings could and should include having some fun together.
Daily Meetings (Scrum Daily) and ongoing communication
Video Conferencing, Shared Desktop
Instant Messaging
Project Management Tools
Strong customer involvement
Transparency instead of obfuscation
Customer is able to really manage the project
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Agile Methods and Nearshoring are a
perfect match because ...
Focus on Communication
Same time zone: Direct Communication (synchronous) possible, instant Feedback
Communication is a core practice (Focus) for agile methods
Responsibility
Agile Methods based on sharing same culture and values
Taking responsibility encouraged by agile values
Creating Trust by having Transparency
Nearshore location simplify visits – important for better transparency and building trust
Short cycles (iterations) result in usable software increments
Agile methods are based on transparency : Important for all distributed projects.
Focus on Quality
Higher quality to fast Feedback
Using modern engineering practices (XP, TDD, ...)
Experience
A lot of providers are very experienced with working in distributed projects.
Scrum is used a lot by Nearshoring providers, XP is well known, too
http://www.agilerussia.ru/ http://scrumtrek.ru/ http://www.agiledev.ru http://www.agilebelarus.org
http://www.agileukraine.org/ http://www.scrumguides.com/
http://agileee.org/
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Contact
More information available on our web site
www.agile-nearshoring.com
Get in contact with us for discussing further details:
info@agile-nearshoring.com
0721-754069-85