The Agile methodology has been widely accepted and implemented in many organizations for various goals. Most use Agile for project execution and product development. We even advocate using an Agile-based iterative engagement model for vendor management to minimize the risk of getting locked into long, inflexible contracts, and to prioritize outcomes over arbitrary task lists.
Many executives still think an Agile methodology would never work in their organization. Some have even attempted to implement Agile and were not happy with the results. Agile flops tend to fall into one of two categories: The organization either did not implement the actual Agile methodology, or was not ready for it.
We are big believers in an iterative model for vendor engagements. It’s a novel concept for some organizations. To determine if the approach is right for you, familiarize yourself with the potential risks and rewards for both the client and the vendor.
Rhode Island-based Amica Insurance provides auto, home and life insurance nationwide and employs more than 3,800 people in 44 offices across the U.S.
Amica was looking to upgrade its web and mobile applications. To reach its goal, the IT team established a digital program and decided to pilot an Agile SDLC framework for rapid and iterative delivery of customer value.
The Agile implementation worked for Amica because the organization from top to bottom accepted a bit of discomfort in the short-term to give the change effort a chance. Management agreed to support decisions made on the front line. Product owners, SMEs, and developers were game to try new approaches and grew professionally. In return, they achieved a level of productivity and speed they had not seen before. Here’s how we helped.
You’ll invest a significant amount of time and resources defining your needs, seeking out promising candidates, and evaluating options. You’ll need to clearly communicate what the organization needs, and what level of performance you will expect.
Then, if you start working together and feel like it’s not a good match, the relationship could turn sour. And if you can’t turn it around, getting out of an outsourcing commitment is not easy—especially once the resource has amassed an in-depth knowledge of your processes and systems.
Quantitatively, 50% of companies feel their outsourced suppliers are reactive, not proactive; 40% experience a lack of innovation and underqualified resources; and 30% suffer high attrition and costs. (Source: Deloitte)
To mitigate risk, I recommend the following systematic approach to ensure you pick the best outsourcing vendors for your organization. I have used this process on many occasions with great success.
The traditional vendor engagement model is flawed.
Technology initiatives are only getting more and more complex, time consuming and costly. Consequently, the risks associated with technology investments continue to pile up.
Complexity increases the number of weak links, prolonged timelines introduce changes to landscape and priorities, and budgets are inevitably blown by vendors that offer unrealistically low costs that they cannot later sustain. While some organizations may feel that the problem is the result of selecting the wrong vendor, the challenge may in fact be the typical vendor contract.