Last year we officially trashed our "old" way of doing things and went Agile! Yeah nothing new there you'd say, loads of companies are saying "agile" with a voice indicating it's some kind of magic wand.. It is the answer before you even know your own question.. but truth is - agile is no simple match and can put severe pressure on both team members and clients. Having said that, going agile is also loads of fun - and I'm 100% convinced - provides far better value and results for your money. But let's have a look at some of the main issues;
Today let's look at first thing first; The requirements.
In our old model we would spend up to a few months working on papers describing pretty low-level requirements to be sure we had a) understood what you were looking for, b) made sure you understood what we were planning to make, and c) covered our ass in case you didn't read the 500 pages after all..
Now this both takes time and is a pretty exhausting excercise for both client and team, as you would want us to describe every nitty-gritty detail as you know I wouldn't include it in the price if you came back with it later. So one main challenge is simply to get to the point where you feel confident you have got it all covered, and where I feel confident our team can manage a proper estimation.
My problem is- already during these first few weeks or months, your requirements have secretly started to change..
As your customers, employees, board and other stakeholders are bugging you with their daily requirements to be able to complete their tasks in a most efficient matter, they will also come up with loads of things they "must-have" and which ends up as a CR's (Change request) and eventually delaying the iteration and frustrating me and everyone else.
In Scrum we do it very differently, but I'm not saying all issues are now solved..
The main principle is that we will never freeze any requirements for more than the current iteration, which again would never last more than 30 days. This sounds great as you can now add all you want to it and change everything every 30 days..? No I have to disappoint you there.
In a scrum team we start out the whole project discussing "user stories" (which of course is our all familiar "requirements") which is a high level discussion on functionality and specific technical issues. This will go around a while until we have measured that all are aligned on the major issues. Challenge now is that there is less paper to fill and a closer relationship is required as the process is somewhat open ended in both ends.
When you have the team split in two different geographical locations this further complicates things. We won't have the time together to discuss and adjust thru frequent meetings, so loads of things needs to be done with conferencing tools over the Internet. This can work really well after you have managed to glue the teams together, but there's a "bonding process" you need to observe.
To bring in faces and the "live people" dimension, we are successfully using tools like Skype (voice/video) and WebEx (common desktop) to do much of this, while Scrum-specific tools gives the capability to have an effective requirement gathering processes through electronic conferences. And as there are no sign off on "final specs", the commitment needed on both sides is to constantly repeat and update requirement work, and work closely together right throughout the total project.
What we end up with is that if I can't manage to anchor the project right at the top with my customer's management, I am prone to failure. I must ensure that the KPI's of our team-mates in the customer's organization (or whatever performance measurement they apply to their employees), is linked directly to the performance of our project. Else I will end up seeing the guy on the other side being "busy" as he is at the same time trying to catch up with "billable hours" or whatever is driving his monthly paycheck and employment review process...
Providing a common goal is quite simply the cheapest tool you have available to ensure success in your outsourced project ;)
- Your comments are appreciated :)
You can read an excellent article about user stories in our Project director Thushara's Blog PROJECTIZED

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