A response to Balanceing Organizational and Project Goals

I recently read a blog from Venkatesh Krishnamurthy titled Balancing Organizational and Project Goals. I felt a bit uncomfortable about the train of thought and decided to comment. As my comment was not published for whatever reason I was spurred to start my own BLOG...

I've unfortunately been subjected to (very) Big company Agile and outsourcing/offshoring for a number of years. Whilst I accept that a ready supply of what appear to be cheap and plentiful expert resource might seem attractive to most finance directors, the true e2e cost, the impact on customer experience, business capability and performance are all too often overlooked. I find it amusing that most of the big success stories in Lean choose to develope their capabilities as close as possible to their customer base, big company agile bucks that trend and chases cheap resource far away from the people, the culture and environment and the products they are developing for.

This led me to my response:

I think the assertion is ludicrous and very typical of the sort of issue arising from offshoring/outsourcing situations. The argument given highlights the fundamental reason why agile and the sort of organsations that resort heavily to outsourcing (that tend to be cost rather than value driven) are are not truly compatible in most situations.

The reason i beleive, comes back to goal alignment and long term business goals.
A true agile/lean organisation should be doing all it can to foster good team ethics and capability that ultimately are in the interest of the the business and distinguish it from its competitors. The problem arising for those organisations that chase the cheap resource and resort to outsourcing is they do not have that mindset and so are not minded to invest appropriately to earn the benefits that approach brings.

In an in-house situation over time all the sort of activities mentioned tend to average out in terms of the time and expense required to service them. This has a fairly consistent impact on team/business velocity that it is perfectly able to work with in terms of planning - both short and long term.

It allows the organisation to see the impact on its end 2 end capability and gives assurance that it can keep pace with the need to change and improve. Benefits arising from regular improvment activities, e.g. retrospective actions, Kaizen events etc will ripple through to improved delivery performance either velocity or quality based.

As soon as you separate those essential team activities from the normal daily rota they become targets for the very thing that the people/organisations who tend commit to outsourcing see as unnecessary "costs". These are almost always viewed divorced from the plus side of the equations because of the short term view that is taken - why should I pay for training when I can move my business to someone who already has the capability?

If a truly agile minded organisation was to be involved in outsourcing/offshoring (which I think is almost a contradiction in terms ), I beleive it would enter into long term relationship with its supplier and then would have at heart the need for that supplier to improve through the activities mentioned. In much the same was as the big lean organisations culitivate their supply chains they would be prepared to help finance those activities as part of the the necessary running expense to generate that improved capability that they will benefit from, ie their goals are aligned. Unfortunately all too many see no further than fixed priced contracts, cost per capita or function points and the next 3 monts work.....