A small offshore outsourcer, Exigen, is pitching would-be clients on using agile programming -- and an interesting pricing wrinkle -- to make offshore IT projects less likely to flop, and more likely to get done early. Problem is, most companies aren't even close to ready to work with outsourcers in an agile mode.
A small offshore outsourcer, Exigen, is pitching would-be clients on using agile programming -- and an interesting pricing wrinkle -- to make offshore IT projects less likely to flop, and more likely to get done early. Problem is, most companies aren't even close to ready to work with outsourcers in an agile mode.Agile programming depends on fast iterations, delivering components of working software every few weeks, months at the most. (It welcomes requirement changes. Neither of these is a hallmark of offshoring or most in-house IT projects.) Exigen, a $70 million revenue firm with 1,700 developers in Russia and Latvia, contends that by doing this, it will shorten many projects, since business managers get working code each month to evaluate, and can decide if they really need any more features. "The only way to get there is if the business can say 'Great, we've got what we need,' " says Doug Mow, Exigen senior VP. (Read the Agile Manifesto principles here.)
Most companies aren't ready. Mow says about a third of its work is done in agile programming. At most companies, business leaders won't make themselves available often enough -- at least monthly -- for the back-and-forth needed with outsourcers for agile development. And, many businesses can't react quickly to that code, evaluating what they like and what changes they want. That's needed to keep teams working on the highest priority features.
That leads to Exigen's pricing wrinkle. It's billing it as Fixed Price Plus Agile, though companies will need to be rather highly evolved outsourcing customers to tap into it. There are two key elements: One, change orders that add features don't increase the cost. Well, that is, if you can eliminate other comparable features that you'd planned later in the project, to offset that cost. If that sounds like a nightmare of haggling and horse-trading, you're not evolved enough. "It's absolutely critical that we not have an adversarial relationship," says Mow, on the key to making it work. Part two is that the company can end the project whenever it wants, if it gets the must-have features it needs -- though it must pay 20% of what's left on the contract.
It's an interesting pitch by an outsourcer like Exigen trying to thrive in the difficult space between offshore giant and niche, industry specialist. It's saying the right things, since no one wants big bang IT projects, everyone's talking about chunking them into smaller deliverables. But getting business project sponsors to pay enough attention, regularly enough, is sure to be a recurring struggle.
What's your experience -- is agile programming a part of your outsourced development work? What's tough about it, what works well?
The Business of Going DigitalDigital business isn't about changing code; it's about changing what legacy sales, distribution, customer service, and product groups do in the new digital age. It's about bringing big data analytics, mobile, social, marketing automation, cloud computing, and the app economy together to launch new products and services. We're seeing new titles in this digital revolution, new responsibilities, new business models, and major shifts in technology spending.
. We've got a management crisis right now, and we've also got an engagement crisis. Could the two be linked? Tune in for the next installment of IT Life Radio, Wednesday May 20th at 3PM ET to find out.