Vendor's dilemma with Agile

Companies which use agile development for development are usually product companies. There are few odd companies which use agile for software services also. They are successful but they are not in mainstream software service business.

I want to analyze why agile is not adapted in most of the offshore companies.

Some reasons attributed for this are:

• Communication is difficult and agile requires daily communication.
• Agile is not suitable for offshore (outsourced) projects.
• Agile is for product development.
• Developing in agile is expensive and not cost effective.
• Etc….

All these do not hold good. Without communication you cannot achieve end results in any kind of development. It is proper application of agile which will prove otherwise.

My reason for non adaption for agile by outsourcing companies is lack of trust and lack of understanding. To understand this we need to check the conflict of interests for customer and vendor.

Developing in agile will result in these benefits. Please check my earlier blogs for details.

• Application is developed faster.
• Main features are ready for production earlier.
• Customer does not have to spend lot of times visualizing every minute details. Only important feature for the next cycle.
• No change requests which eat up budgets.

Let us see what the implications on the vendor are:

• Developing faster means loss of revenue.
• Typical offshore company cannot charge more for delivering early. There is no incentive.
• Giving demo every 4-6 weeks takes more discipline and puts more pressure.
• Agile requires automated tests. What is the benefit if someone else maintains the application in future?
• Refactoring and simplifying the design will result in smaller changes and less maintenance.

There is lot of things for vendor to loose. This is the main reason vendor (offshore outsource) will not take initiative for moving to agile. Main driver for offshore is cost and agile just cuts down the margin.

But there are good reasons to move to agile and get benefitted by it. Even a offshore company can benefit by working along with the client.