More from Jeff Sutherland (the video presentation i posted about yesterday). This time on outsourcing (sending to India) vs implementing Scrum locally.
Scrum Tuning: Lessons learned from Scrum implementation at Google
(example starts around 42 minutes into the presentation)
- Outsource $2million development
- Outsourcing costs $1.6M
(industry data show 20% cost savings on average)- Alternative: Introduce Scrum locally
(240% improvement)- Local Scrum costs $0.83M
(which yields a 59% cost reduction)
Every company I introduced Scrum in (even one with 600 developers) more than doubled productivity. In fact, I don’t even view that as very good.
That’s kind of a mediocre effect. A good implementation get’s a Toyota effect — at least four times. [company name] get it ten times. 240% was what I got at my last company which had about 600 developers. That means I can take my 2 million Dollars and do it locally for 0.8. If I send it to an Indian team that is doing waterfall and pay 1.6 — how dumb is that?
Why would anybody do that?
You would always wanna introduce good agility locally first, and then go and insist that the Indian teams be agile — and that’s what [xx] is doing — they are converting all their Indian operation — which is growing bigger than their US operation — to Scrum.
… although this seems pretty biased, the story continues and Jeff gives an example with even better productivity: Distributed scrum for a company in Utah, US/St. Petersburg, Russia.
More notes: Agile and Scrum Tuning by Jeff Sutherland
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