To undergo an effective Agile software development process, it is important that the developer and the client constantly interact, in real time. Interaction does not imply a face to face presence; it can occur via chat, the telephone or video-conferencing. But because agile groups do not have large backlogs of detailed information, if they are unable to reach the client at a critical juncture, the group might have to stop the software development temporarily.
For this reason, Agile software development demands that the client and vendor be in a similar time zone, so that questions are asked and responded in as close to real time as it is feasible. Overlaps for an important part of the day (at least 60 to 70% of working hours or more) seem to work best. US or Canadian software companies that have previously outsourced IT services to India, China or the Philippines, are now approaching countries like Colombia or Mexico as a preferred destination for IT services outsourcing partnerships, especially after agile software development projects with such destinations have gone sour. Indeed, under agile, other weaknesses of former IT services outsourcing vendors come to light, such as the inability to think critically about unforeseen circumstances, the inability to ask clarifying questions with little information to start from, or the complications certain cultural mores create in allowing for creative thinking "on the fly".
If you are a US or Canada company that is thinking about going agile with your IT outsourcing, and do not want to lose the benefits of working offshore, we heavily recommend that you look for software development and IT service vendors in Colombia, Mexico or Latin America in general that overlap your timezone to an important extent.
More on PSL: PSL provides custom software development services as well as team augmentation for North and Latin America. Headquartered in Colombia with offices in Mexico and the US, PSL specializes in Agile software projects combined with high quality and process maturity.