The Sourcing in the Agile Era survey investigates how professionals are handling the contracting of agile services, how they’re managing agile software development relationships with providers, and which set of practices leads to better and higher performing engagements.
The results offer forward-looking insights about managing agile development vendors, including contracting, satisfaction levels, and managing growth of agile sourcing contracts. We show which performance metrics, sourcing drivers, sourcing focus, and pricing models result in happier engagements, as well as what seems to be derailing relationships.
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Explore common practices in hiring agile development or managing your vendors
Discover what other sourcing managers are doing to manage agile relationships
Learn how Sourcing and Vendor Management (SVM) leaders are evolving the SVM function to better manage agile programs
Benchmark your hiring practices against those most satisfied with agile vendors
Find out what parameters and drivers lead to more satisfied stakeholders and higher business value
Explore survey facts and use them to make the case for strengthening the SVM organization
The report unveils what makes for happy agile development relationships and deals with many topics in depth. A quick glance at some of the findings can be useful to pinpoint areas where you could benchmark your organization’s approach against those of the survey respondents.
60% of all organizations which mentioned cost optimization as a primary driver for using third-party agile development suppliers use Fixed Cost pricing models.
51% of the companies plan to increase agile development outsourcing during the next 12 months.
60% of the companies outsource with cost optimization in mind, but only 23% do it primarily to access vendor experience.
60% of organizations are actively exploring new agile development services providers, with 27% moving forward with new, more agile vendors.
63% of sourcing organizations are very involved in negotiating terms with providers.
The commonly used pricing models are Fixed Price (46%) and Time & Material (44%).
All the organizations are satisfied or very satisfied with their current agile contracting model or approach.
50% of organizations made no changes to their Sourcing & Vendor Management programs to accommodate for the acceleration of digital initiatives.
31% of Vendor Management (VM) departments don’t manage agile contracts or don’t manage them in a standard way.
Is the boss happy? 85% of all organizations have stakeholder satisfaction as a KPI.
90.4% of the companies outsource 10% or more of their agile development needs.
67% of companies mentioned that outsourcing companies are contractually responsible for delivering features*
*According to Scaled Agile Framework, a Feature is a service that fulfills a need of a stakeholder, and to be called such, it must include benefit hypothesis as well as defined acceptance criteria
The report sheds light on numerous factors, including what level of involvement is appropriate for SVM and supplier managers, what performance metrics drive better outcomes for hiring organizations, and much more. Here are some of these findings, but for more, you can download the full report.
90% of large organizations outsource 10% to 50% of their agile development work. Making agile vendor management a strategic imperative.
Most organizations that cite lowering costs as the primary reason to outsource agile development, are also the least satisfied with their engagements. Whereas highly satisfied companies prioritize speed over cost.
Organizations that measure faster time to market are better positioned to select the right agile partner and meet the organization’s goals. The most successful organizations focus on assessing the partner's ability to maximize value creation at competitive costs.
The less involved SVM is in the process, the less satisfied the organization is overall. Agile development suppliers must be actively managed, and the higher the involvement of specialized SVM managers, the higher the satisfaction and outcomes of the engagements. Although, 42% to 46% of organizations don’t have any standard way to manage these engagements or aren’t managing them at all.
50% of the fast-growing group consider agile experience a top driver for outsourcing, not one of the slow-growth organizations considered it a driver at all. Further, those falling behind in terms of company growth had a higher expectation with regards to improving time to market but are also the most disappointed with the outcomes.
We invited 1,112 executives involved in hiring, managing, or directing agile vendors or programs to respond to the survey. The respondents are primarily C-level executives, VPs, and Directors in the US. We only invited executives representing large or very large enterprises, as they have larger programs that are likely to benefit the most from active SVM roles.
Number of respondents: 134
Number of responding organizations: 108
Revenue of participating organizations:
$1.7 trillion USD
Average revenue of participating orgs: $37 billion USD
Healthcare
Insurance
Banking
Technology
Media
Industrial
Retail
Hospitality
We host a Sourcing Agile Roundtable Discussion every quarter. In these private roundtables, sourcing and digital leaders seek to get the most out of agile outsourcing relationships by sharing ideas and posing questions about the rapidly evolving best practices for managing agile partners.
Contact me to learn more about the Sourcing Agile Roundtable Group.
