When XP Met Outsourcing

I’m blogging the conference Agile Approaches for Delivering Business Value

When XP Met Outsourcing

Angela Martin, Martin IT Consulting Ltd

Outsourcing is common for software development, and is the context for many projects using agile development processes. This paper presents two case studies concentrating on the customer role in projects using outsourcing and extreme programming (XP).

The studies follow an interpretive approach based on in-depth interviews, and suggest some tensions between some contractual arrangements in outsourcing, and the XP process.

In particular, one suggests XP worked well in the context of their particular outsourcing arrangements, and the other study suggests difficulty in aligning XP with a different set of outsourcing arrangements.


(to be) Published as a paper on MartinIT website

Method – two interpretative in-depth case studies. Multiple perspectives via semi-structured interviews. Validated data and interpretation with each interviewee.

Two Case studies

Case Study 1 (T&M)

KiwiCorp (customer), DevCorp (outsourcing/software house), BureauCorp(facilities management and infrastructure). 15 months, 11 people. Seen as a success.

Customer saw benefit from the XP process. DevCorp project manager recognised that on fixed price would have had to be harder on the client.

Lots of vendor issues because of differences between DevCorp and BureauCorp.

Case study 2

Project Pinta. Custom-build, fixed price. FalconCorp (US developer), RetailCorp(UK retailer), ManageCorp (big consulting organisation who hired FalconCorp to do the job). FalconCorp to take the cusotm build and sell as a project.

Everyone thought it was doomed… 6 month deadline. In 2 weeks ramped up to 60 people over four XP labs. Weekly iterations. So within a month knew it wouldn’t fly.

FalconCorp felt that as fixed price very little room to move, so moved more to waterfall… Stopped asking questions, to make sure they could just get signoff and the cheque. Kicked the customer rep (ManageCorp) out of the lab – seen as being a “spy”.

Is this because of the process, the contract, or Winner’s Curse? (over-bid)

Got to 6 month demo – and custoemr accepted it! (the demo didn’t show the broken bits…).

FalconCorp went into bug-fix mode and laid off 2/3 the staff. Then new management came in and found that actually the product was full of holes. Treated it as a throwaway prototype, and went into a fixed-price waterfal project to re-engineer as a saleable product.

Questions (and for Duncan too)

Q: How do you sell Agile to your client?

A: Don’t – until you are sure you can deliver in an agile way

Q: What are the client drivers for fixed price?

A: Need someone to blame “not the client’s problem”

Q: Which has pects of Agile do you keep/drop when customer insists on fixed price:

A: All of them (internally) as a delivery engine.

Q: Why does the industry encourage under-bidding?

A: (Keith) We have allowed purchasers of IT to think it is a fungible commodity so competition is on price. Look for shared-risk, shared-reward…

Proactive application of technology to business

My interests include technology, personal knowledge management, social change