Agile, Outsourcing and Risk Mitigation

Risk Reduction Via Outsourcing? Perhaps.

Many times it seems that companies believe they minimize risks to their project simply by outsourcing. There is a kernel of truth in that approach with a caveat.  Consider the implications on the project if the outsourced work package is not delivered on time or at the right cost and quality.  If this outsourced work package is part of a larger package, and the success of the larger is contingent upon the success of the outsourced package, failure in the outsourced will ripple to failure of the larger project. Often that was the thing we were trying to prevent from happening by outsourcing  in the first place!

Monitoring and Participation are Key

Agile can help here with via the same constant communications we have in our sprint meetings.  Our outsourcing of the package now puts us in the role of the product owner. That means we are not allowed to sit on the sidelines after handing the definition of the work to our supplier.  We must prioritize the product backlog.  We have answer questions all along the way from the sprint team.  At the end of each sprint we will review the product to ascertain if we are on the right path with the outsourced work.  We will then review the product backlog for any adjustments and prioritize that into the next sprint. Instead of a “big bang” development (all of the product at once) we are constantly reviewing and critiquing the product.

Neither Agile nor Conventional

Our success can be seriously impaired if we say we are employing agile (minimized documentation) and act like the traditional or conventional project management that seems to have the hands off approach at times.  In those instances we will have neither “comprehensive specification” (as if that were possible) nor will we have the constant interaction with the supplier to drive the product toward our end goals.  In addition to these risks, we will likely have risks with our contracts as we struggle with the supplier to find the appropriate contract type to address both our risk exposure and our supplying organizations risk exposure.

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