Why Adopt Nearshore Agile Development?

April 22, 2010 - PRLog -- With outsourcing being in full swing, traditional software development methods such as waterfall start losing value due to their inability to meet with the rapidly changing requirements of this high-tech epoch. A waterfall model is good with stand-alone, batch applications as well as robust enterprise solutions, which require 20+ developers and project execution distributed among multiple locations. But what about Web/Enterprise 2.0 applications, which require up to 20 IT staff members to complete and accelerated time to market to be able to grow into profitable business solutions in a small fraction of time? Moreover, these solutions should be free of delays and errors, since any delay in delivery and bug fixing at the post-production stage will cost the client time, money and reputation.
According to the latest CHAOS Report, as of 2009 only 32% of all outsourced software projects succeeded, while 24% failed and 44% were challenged by late delivery, over-budget and poor functionality.  Another study of 6,700 projects, commissioned by IAG Consulting in 2008, found that 4 out of 5 major factors, contributing to the outsourced project failure, were largely associated with a waterfall model.  As of 2008, 68% companies experienced a waterfall project failure due to: taking over 180% of target time to deliver; delivering under 70% of the required functionality, and wasting over 41% of the IT development budget remaking the end product as a result of poor requirements gathering at the project initiation and planning stages. However, the most dramatic legacy of the waterfall model is that it became hardwired into the project planners’ mindsets, making the entire software development process-packaged, plan-driven and bureaucratic.
While promising to help cut software development costs, most of offshore outsourcing services providers, who offer their clients pure waterfall development regardless of their business needs and project scope, hide the fact that the clients will have to pay overheads relating to fixing the end product’s defects and/or malfunctioning (which is a common practice due to inadaptability and inflexibility of the waterfall model), and “helping” the vendor upgrade its infrastructure and processes as required by CMMI and other organization’s maturity certifications (which most of old-school vendors are obsessed about).
Additionally, the waterfall model assumes creation of a detailed set of requirements and, based on it, determination of a single project scope, which has neither practical, nor economic value for companies needing to present their web or software product at the market in a small fraction of time. If something needs to be changed in the middle of the project, the vendor will most likely delay the product delivery, trying to flex the application, and will leave the customer waiting on a bench and watching his competitors “skimming the cream” off their working applications.
The bad news is that typical offshoring to providers with a strong waterfall software development tradition has proven illusory and no panacea for Western European clients, located thousands kilometers away. Today’s companies want to feel the pulse of time and are no longer satisfied with hidden management problems and hidden costs as well as headaches relating to excessive documentation and bulky processes.  The good news is that there is a solution – a good mix of innovation and sustainability, which is best achieved via nearshore development.
Offloading IT development nearshore (to economically slower-achieving neighbors) has proven very effective in recent years. Its major benefits include, but are not limited to:
•   Enhanced collaboration between the customer and vendor’s development team
•   Working in the same or similar time zone
•   Higher employee retention and lower turnover rates

Nearshore IT development is a win-win strategy for Western European companies who consider outsourcing to save costs, speed up time to market and leverage innovation. However, the question remains - how to achieve the best software development via Nearshoring? The answer is Agile.
Agile development has made its way into the application development mainstream in the past few years and has already gained momentum among smart outsourcers willing to speed up delivery schedules, to quickly adapt to changing business demands, to align technology and business goals and to gain competitive advantage against the increasing competitive pressures.  According to the 2009 State of Agile Development Survey, 28% of companies use Agile on outsourced projects, while 13% plan to offload their Agile projects nearshore. These figures highlight the growing popularity of Agile development over traditional waterfall methods. Listing the greatest concerns of Agile adoption, the above Survey points among all to the lack of upfront planning and lack of predictability. However, these are just two misconceptions generally relating to the lack of understanding of an incremental planning approach.

In fact, most Agile teams spend as much time planning their project as waterfall-model teams. The only difference is that in Agile the planning efforts are distributed throughout an entire project and are not just compressed to the project beginning stage, like in waterfall. Unlike upfront planning, the incremental approach gives venues to both high-level initial planning and lower-level iterative planning, which is more effective, as more knowledge is gained with each new iteration.

Unlike traditional detailed and task-based project planning, Agile continuous planning provides teams with the necessary process-based frameworks to more easily and efficiently adapt to the new technology, requirements, business demands, risks and issues.

Regarding the lack of predictability, in software development what is often believed to be “predictability” is, in fact, only “the perception of predictability”. In traditional models predictions are made based on activity plans, progress evaluation, and analysis of deviations from plan etc. But decades of experience show well how dismal such predictions prove to be. This happens, because traditional models lack a simple mechanism of integrating new information into the plans. In Agile predictability is more precise, as the incremental planning and re-planning are refreshed with new actual data emerging throughout the development process.

Of course, Agile is no panacea.  All it offers is simply process, engineering and managerial practices packaged together to allow higher degree of discipline and sustainability in every single area of software development, from test-driven to continuous integration to daily stand-ups. While large outsourcers can afford to leverage their technologic expertise by locating their IT function offshore or distributing it among multiple locations, a combination of Nearshoring and Agile development appears to be a perfect option for small and mid-sized Western European companies due to enhanced ability to manage changing priorities, improved alignment between business objectives and IT, faster time to market and simplified development process.

To read the full white paper, go to http://www.ciklum.net/images/stories/knowledge_center/pdf...

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Ciklum is a Danish innovative IT outsourcing company specializing in nearshore software development in Ukraine by establishing dedicated clients' teams. Established in 2002, Ciklum employs more than 800 specialists with more than 100 global client teams.