Webinar Rightsource For More Agility

1. WebinarRightsource For More Agility Diego Lo Giudice, Vice President, Principal Analyst December 3, 2012. Call in at 10:55 a.m. Eastern time Follow me on twitter: @dlogiudice

2. Agenda • What’s the Agile ecosystem? • Outsourcing Agile challenges and trends • Making Agile and Lean rightsourcing work

3. Context: SW is the crown Jewel of the 21st Century Digital Business ! Theme: Agile and Lean are best way to build crown jewel SW for your enterprise, but to scale, you will need to redefine the ecosystem of resources you need…. Diego – Find new picture – reduce text How do you source for development and delivery of your “crown jewels”?

4. Crown jewels are systems of engagement!! Shorter dev and delivery cycles, feedback, change, innovation Stable, long dev and delivery cycles Source: February 13, 2012, “Mobile Is The New Face Of Engagement” Forrester research

5. The way forward for *ANY* BT application development and delivery organization is to focus on these themes + Quality! Increased velocity Collaboration Adaptability

6. “There is always a better way to do things, and currently, Agile is the best way!” WELCOME Lean and Agile! Source: February 8, 2012, “Justify Agile With Shorter, Faster Development” Forrester report

7. Data shows quality, change, and speed are top claimed benefits for Agile Responsiveness to change Quality Speed Base: 205 IT professionals from organizations that are implementing or have implemented Agile (multiple responses accepted); Source: forthcoming, “How Mature Is Your Agile Adoption?” Forrester report

8. Transforming to Agile and Lean means redefining your environment’s ecosystem Source: September 4, 2012, “Rightsource Your Agile-Lean Ecosystem” Forrester report

9. Agenda • What’s the Agile ecosystem • Outsourcing Agile challenges and trends • Making Agile and Lean rightsourcing work

10. End user challenges with Agile and Lean outsourcing THESE CAN BECOME SHOWSTOPPERS IF NOT PROPERLY ADDRESSED Readiness Transparency Distributed teams Scale Partnering approach Partner selection Contracts Source: September 4, 2012, “Rightsource Your Agile-Lean Ecosystem” Forrester report

11. SI challenges with Agile outsourcing Some large-scale service providers add Agile to their Chinese menu of services. Agile represents a major methodology/paradigm shift also for vendors. Offshore (not just distributed) Agile is difficult to achieve. The move to “managed services” confuses the ability/need to move to Agile. 11

12. Agility requirements drive domestic outsourcing

13. SIs: “Clients are not ready.” You: “SIs are not ready.” SI Not ready

14. Outsourced number of Agile projects among SIs is growing more slowly than expected Source: September 4, 2012, “Rightsource Your Agile-Lean Ecosystem” Forrester report

15. IT clients want Agile and need help! • The IT industry has surpassed the TI industry! • Overall adoption of Agile: • 37% of tech industry • 57% of IT industry Base: 205 IT professionals from organizations that are implementing or have implemented Agile; Source: forthcoming “How Mature Is Your Agile Adoption?” Forrester report

16. Agenda • What’s the Agile ecosystem • Outsourcing Agile challenges and trends • Making Agile and Lean rightsourcing work

17. Forrester — holistic transformation framework to Lean and Agile: IT supplier alignment • IT-SUPPLIER ALIGNMENT • Redefine ADD sourcing strategy. • Adjust partner panel with “Agile suppliers”: • Transformation strategy/executive coaching. • Project-level coaching. • Full outsourcing SIs. • Bring purchasing/legal onboard on Agile values/principles, waterfall versus Agile. • Partnership, trust, transparency • Contracts for waterfall won’t work. Redefine • Organize for distributed Agile. • Review offshoring approach. Change strategy Communication value measures Business-IT alignment Project portfolio management Lean principles Agile practices, process, and organization Scrum, XP, Kanban TDD IT-suppliers alignment AD&D sourcing strategy Tools and technology Agile ALM DevOps Source: April 27, 2012, “Embrace Holistic Change To Achieve Agile Results” Forrester report and September 4, 2012, “Rightsource Your Agile-Lean Ecosystem” Forrester report

18. Renew your partner ecosystem for Agile Agile/Lean transformation (BigVisible, Emergn,NLighten, Collabnet, Valtech, ThoughtWorks) • Agile strategy/road map • Executive/mngt coaching • Scaling strategies • Transformation frameworks • Metrics Agile/Lean project coaching (Construx, Sapient, Bluewolf, Valtech, CollabNet, Ness, ThoughtWorks) Outsourcing Agile projects at scale (ThoughtWorks, Ci&T, Cognizant, Matrix Global, IBM GS, HP, TCS, Infosys, LuxSoft) • Project coaches (Scrum, Kanban) • Continuous integration/delivery (XP, TDD). • T&M on projects • Agile training • Deliver large-scale projects using Agile • Outsourcing strategy • Scrum/Kanban + CI/CD in near-offshore Source: September 4, 2012, “Rightsource Your Agile-Lean Ecosystem” Forrester report

19. Be Agile and Lean in your partnership agreements EVOLVE CONTRACTING AS YOUR AGILE PRACTICES EVOLVE MANAGED SERVICES AND AGILE T&M contracts Outcome-based Fixed-price contracts Fixed price + Variable Fixed sprint Evolutionary contracting* Change the way you construct contracts; Agile and Lean can lower contract risk. T&M is the simplest solution but isn’t good for clients. Fixed price puts too much risk on the vendor. Fixed plus variable pricing works temporarily but won’t scale. Be ready to manage evolutionary contracting as the industry matures and goes from T&M and fixed price to outcome-based.

20. In outsourcing, contracts do drive behavior but . . . If both you and the supplier are really bought in to Agile values and principles you MUST be: TRANSPARENT: Agile forces continuous feedback and transparency across all stakeholders. TRUE PARTNERSHIP AND TRUST: Change in due course is welcome, but should not be abused. Both win, both loose. SLAs CHANGE: Deliverables and milestones are working SW, not documentation. METRICS CHANGE: Focus on value, progress is more evident (transparency). Source: September 4, 2012, “Rightsource Your Agile-Lean Ecosystem” Forrester report

21. Distributed offshore is hard but can be a viable option with the following practices • Shared goals and metrics • A component approach (architecture-driven) • Feature versus component teams • Double-down on key roles like PO and Scrum Master. • Colocate first, set up infrastructure, then go distributed. • Increase transparency with Kanban, Burndown/Up e-Boards. • Adopt Agile ALM tools and infrastructure that increase collaboration. For distributed: Evaluate the business case carefully!

22. Assign permanent and self-sufficient standard open-space rooms for your Agile teams: If distributed, mirror them Source: September 4, 2012, “Rightsource Your Agile-Lean Ecosystem” Forrester report

23. ALM goals and tools are shifting driven by innovation and Agile: mandatory when not co-located ALM moving more ADM to more of an end-to-end business process for development! Besides, usual development tools, focus on the tools that developers use infrequently, if ever Test management supporting TDD, BDD Planning sharing goals among distributed teams Requirements with more visual support Release automation (DevOps) Project management support for Agile Reporting/dashboarding for stakeholders not just developers

24. Conclusions • Keep your crown jewels local. • Be ready for Agile; you can’t outsource it if you don’t master it. • Pick the right distributed projects for outsourcing Agile. • Bring in new players if your traditional SI can’t help. But be careful! Not all SIs are ready to play the game! • Contracting is hard; explain Agile principles and goals to your contracting stakeholders. Prefer lightweight statement of works. • To scale, especially if distributed, adopt Agile tools and “equipment”.

25. Diego Lo Giudice +39 340.771.0775 dlogiudice@forrester.com Twitter: @dlogiudice