- March 24, 2010
- Posted by: admin
- Categories: Agile Project Management, Blog, Enterprise Agility, Outsourcing & Agility, Outsourcing Advice
Can your outsourcing vendor really add value and bring insights and agility in to your business?… OR are you dead sure that they just need to be a sweat-shop enslaved in a tight contract and trained to follow the commands and deliver accordingly?
My take on this: Just like some employees end up becoming strategic assets to the company and ultimately lead its strategy while others are more than happy to work within their defined JDs. Same is the case with outsourcing vendors. Some can really become your strategic partners while most will remain a shop where you can offload your mundane workload.
We’ve set up a LinkedIn group to follow up on this and similar discussions. Agile Outsourcing Group: http://www.linkedin.com/groups?gid=1659127
Clarification added:
Thanks for the responses so far. I would agree with most of you that outsourcing should be measured by the results i.e. good or bad. But also please elaborate on your perception about the role and scope of outsourcing. Can it be only (or mostly) used for well-defined run-of-the-mill processes OR can you also depend on the outsourcing provider to provide insights based on their experience within a particular industry vertical or an exceptional expertise in a horizontal functional process.
When I am referring to ‘agile’ I am NOT just referring to the agile software development methodology and agile manifesto – but a more encompassing concept of whether the provider is flexible, business-savvy and responsive to the ongoing market trends and whether such qualities can be utilized for the customer’s benefit.
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One of the biggest dangers in outsourcing is lack of clarity about what the expected outcome is. With multiple time zones, two different business entities, different personal insights amidst cultural differences serious problems, as seen from both sides of the contract can occur.
The client can end up with nothing of value and the vendor without a reference account.
Although “Agile” has precise definitions, it also can mean “we don’t have to decide this, we are agile.” How exactly the term is to be defined really needs to be crystal clear between the teams or it will not be a winning proposition for anyone.
Today it is ‘agile’, tomorrow ‘advanced agile’, after that ‘forward agile’, next ‘agile 27’, and so it goes on for ever.
Many of these titles are used only to confuse the paying party, and to prove ‘take us, look at our name’.
At the end, we have: a good outsourcing and bad outsourcing.
As long as we have a sheep, we will have a wool 🙂
I think Savo put his finger on it. At the end of the day, there are good results from outsourcing, bad results from outsourcing, and a bunch or results somewhere between the two extremes.
The question then is: can a “good” outsourcer NOT be agile? No, of course not.
“Agility” can imply the ability to change course as rapidly as your client does- always to the same degree and in the same directions, like synchronized swimmers. Whenever that is appropriate. Sometimes a good outsourcer should do the OPPOSITE of what the client does: filling gaps in the clients’ range of competancies with its own, complementary competancies. In other words, agility also means agility in the ways in which one displays agility.
Of course a “bad’ outsourcer can be bad for reasons other than a lack of agility. But, as I believe I have just proven, you can’t be “good” without it.
Long story short: “Agile Outsourcing” just means “Good Outsourcing.”
The way you and your website uses the term “Agile Outsourcing” is marketing speak and subject to interpretation. Perhaps you are trying to refer to the Agile software development methodology?
Agile software development has a very specific meaning and is defined by the 12 principles of the Agile Manifesto. One of the principles is:
The most efficient and effective method of conveying information to and within a development team is face-to-face conversation.
This is interpreted by some as “true” Agile software development cannot be outsourced, especially offshore. But many companies do outsource and remotely participate in daily meetings of an Agile software development process. They either accept less efficient and effective communication, or work to make it as good as possible.
To succeed at outsourced Agile software development requires the offshore vendor have a complete understanding of the Agile software development methodology, usually having certified Scrum Masters and people familiar with Test-Driven Development, user stories and other methods and techniques commonly used in Agile.
Any outsourcing vendor who calls themselves “Agile” in the context of application development without referring to this specific accepted definition just seems confused or is pretentious in my opinion.
Links:
http://agilemanifesto.org/principles.html
Herb is correct, a good BPO must be “Agile” and should stive to complimeent and enhance the businesses they work with. The insights and experience gained from the exposure to multiple vierticaland business models can be a very valuable toolbox from which to draw advice and suggestions provided your BPO provider is engaged in the relationship with your firm.
This most often required that management of the BPO be familiar with the culture, business methods and markets they serve. These are not as common as many BPO centers strive to hire those who are from that industryu rather than obtaining global talent in the areas where their clietns operate. At BPO Resources we pride ourselves on our extensive experience in multiple verticals including BPO. With this background staff gain the knowledge to assist and recomend rather than simply take direction and execute. A good employee and team members can do this. A hourly telemarketer cannot. Ther is a big difference..Make your BPO experience a good one and research the philosophy of the centers management before choosing a low cost provider with commitment only to making a quota.
Links:
http://www.bpoph.com
Agile Outsourcing is more of a marketing gimmick as it is very unlikely that an outsourced operation could respond to changing business needs instantaneously.
During these tough times organizations are evaluating each and every step they take to realize the corporate strategy and weighing the cost vis-a-vis the benefits. It is important to have a strategy to respond to the market dynamics. In-house developed expertise has sufficient knowledge of the business to demonstrate agility and so the trend is more towards agile management.
When outsourcing as an industry, begin to look at “agility” as a potential offering, it’s begins to take the flavor of “consulting”.
The most successful consulting models has already managed to become agile. Embedding skilled individuals with a deep understanding of the market, the trends and the client’s needs, within the organization for longer periods of time, is exactly that.
The challenge for an outsourcing company to accomplish the same thing, lies in the very nature of outsourcing, which is largely premised on inexpensive substitution of a workforce withing well-defined parameters.
To understand, indeed anticipate, what the client really needs – you have to “be” there. That’s what consultants to, but their business model is based on almost the exact opposite – they are more expensive but they are there, often more much longer hours than the client’s regular workforce.
Outsourcing’s strongest – and largely only – asset, is price.Well that, and perhaps the ability to perform rigorously to well-defined performance indicators.
To attract, develop and retain individuals to perform in roles similar to consultants, the price have to go up significantly, thus eroding the premise of outsourcing.
It’s not really a model that I can see evolve…
Cheers 🙂
Good question. I feel that all answers above surpass one important fact: Agile can not be a guarantee for ‘success in outsourcing’ as long as the processes/way of working of a vendor are not synchronized with the outsourcer.
In the industry, many companies use the term agile software development mainly as a marketing strategy in my opinion. Because the term is a hype, many buyers believe that as long as their vendor works ‘agile’, they will succeed in outsourcing part of their business.
Above, we can already see that ‘agile software development’ and ‘agile business’ are mixed. If nobody has a clear perception of what agile truly means, how can it be true? Does it relate to a specific, structured software methodology or to the flexibility of a business?
I believe that in the end of the day, all that counts are the people on the vendor side who are working for the outsourcer. Build a strong, highly skilled team and invest time, then it will succeed. Outsourcing (especially offshore) is not a quick fix, it is a slow process in which buyer and vendor (the same if you build your own team) have to invest a lot of time and energy on building a strong process in which both teams (onshore and offshore) are completely synchronized. In which the teams know eachother well and each ‘side’ knows exactly what to do and what can be expected of the other team members. Whether the base of this offshore process is agile or whatever, the effectiveness all depends on the specific situation.
I am curious to know how others think about this now.
Hugo
http://www.bridge-outsourcing.com
I suggest that the agile pattern is the same as the entrepreneur pattern. Scan for opportunities and seize the best to best effect asap. Review for improvements and scan and do/seize the opportunities again. It is on one end of a spectrum where most people/organizations are in the middle, and the ones on the far end are perfectionist. Perfecting existing (maybe traditional) ways. Big organizations/bureaucracies perpetuate themselves, and so are perfectionist. We see more agile with more new smaller businesses and more social change, and more cultural creatives.
Outsourcing companies and individuals have been working on so many projects over the last 10 years that it’s obvious that some of them can dramatically contribute, “add value and bring insights” to any scale project, anywhere.