Are nearshore suppliers the best low cost option for agile software development?

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Agile software development requires development teams and users communicating all the time.

The flexibility and constant testing makes it a challenge to succeed using agile software development techniques if these groups of people are not in close contact during work time. You can't really do a scrum over thousands of miles.

This gives outsourcing let alone offshoring a disadvantage. 

I had a conversation with the man heading up Cadbury's digital developments today. He told me that when the company embarked on its digital strategy, which involved the creation of lots of websites to increase interactions with consumers. Cadbury did not have the in-house re-sources to complete the project so decided to outsource to a specialist. After looking at a number of suppliers it chose Romania/Moldova based Endava.

This nearshore location had the best combination of experience, cost and proximity to customer, when compared to other digital development suppliers based  onshore, offshore and nearshore.

The fact that the supplier works the same hours as the customer means agile software development techniques can be used. The client can work very closely with the development team, like a virtual team,  and ensure constant targets are reached.

Could this be the biggest advantage of sending work to nearshore locations?

There is a lot more interest in nearshore locations such as countries in central and Eastern Europe. It seems it is a case of big businesses not wanting to have too many eggs in one basket, namely India.

Hear are five reasons to outsource to Eastern Europe

1. High skilled labour
The former Soviet Union had a strong educational emphasis on engineering and the sciences. As a consequence, many of the countries in this region today have a highly skilled workforce in areas such as computer science, but at much lower labour costs than the UK.

2. Cultural similarities
Some companies believe that Eastern Europe has a distinct advantage over places such as India when it comes to outsourcing because employees tend to take a more collaborative and less process-driven approach to projects.

 3. Time zones
Eastern Europe covers a vast region, but most of the countries within it are just a few hours away from the UK in terms of time difference, making it easier to communicate within working hours.

4. Data protection
Eastern European countries within the EU could be a good choice for work which requires adherence to the Data Protection Act.

5. Growing labour market
While skills shortages remain a problem in the UK, growth in IT outsourcing in Eastern Europe continues to increase. In 2009, Romania was found to be the country with the highest growth of IT specialists, increasing by about 12% compared with 2008. Ukraine followed with over 9% growth.

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I advised on an agile software development project that went badly wrong. The customer was UK-based, and the supplier was in India. Proved to be very difficult to use agile principles when there were both geographical and cultural differences. One of the key issues with agile software development is also getting the right sort of contract - traditional contracts just don't work as they lack the flexibility required for an agile setting.

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This page contains a single entry by Karl Flinders published on August 16, 2011 3:39 PM.

DWP wins outsourcing contracts at MoD, bad news for Capita, Logica, NorthgateArinso and Liberata? was the previous entry in this blog.

Atos Healthcare staff under investigation for obscene criticism of sickness benefit claimants is the next entry in this blog.

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