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Issue: 003  |   March 2007

In this issue

PAPERS

Delivering value from outsourcing

 

Where outsourcing is the preferred strategy for improving software project performance, the CMMI® is increasingly being applied for its original purpose, as a means of evaluating and monitoring supplier capability.

The argument goes that professional software supply companies are likely to run projects more predictably and cost effectively than an organisation's in-house staff. Especially when a project necessitates integration of COTS or the adoption of new technology.

So why is it the newspapers still report major software disasters?

Understanding the objectives and origins of the CMMI® method may help understand why outsourcing to a mature supplier does not, of itself, guarantee results. Outsourcing delivers most benefit when there is some match between the maturity of both the customer and the selected supplier… and when both commit to continuous improvement.

 

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The perfect companion to the SEI's CMMI®

 

Ken Dymond's “A Guide to the CMMI®” 2nd edition, based on v1.2 of the CMMI®

SMS is the European supplier for Ken Dymond’s excellent Guide to the CMMI®. We are pleased to announce that the 2nd edition, based on v1.2 of the CMMI®, is now available.

Contact SMS to order your copy.

Price £26.00 (plus delivery). admin@measuresw.com

CMMI is registered in the U.S. Patent and Trademark Office by Carnegie Mellon University.


 


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Case Study: Resolving a Dispute

 

“How well has our supplier performed during the 2 years of our partnership?”

The major insurance provider who posed this question also wished to reach a consensus with their supplier so that together the two partners could improve their joint practices.

The need to monitor supplier performance has grown over recent years as the use of outsourcing has increased. The more the customer depends on the supplier, the more crucial it is to see the level of performance achieved.

With insight into the process, the customer is able to help the supplier improve their practices and performance, to the benefit of both partners and the ultimate end user.

The insurance company customer was about 18 months into a contract that outsourced all software applications development and enhancement to a respected supplier.

The executive in charge on the customer side suspected that performance was not up to the levels expected. However, the supplier’s account management team chose to interpret the data differently and disputed the criticism. Some means was needed to break the deadlock.

 

 

Current Issues with Outsourcing
Dr. Simon Wright, SMS Principal Consultant

An undergraduate MBA student was passing the College Chapel and decided to pop in for a quiet moment. To her surprise one of her Professors was inside, kneeling in prayer.

This is what she overheard him say:

"God grant me the serenity to accept the things I cannot outsource, courage to outsource the things I can, and the wisdom to know the difference."

It is possible to outsource virtually any business function, but should you? The simple answer is only if there is a business benefit for both parties, and that is where so many people get it wrong. The problem is that outsourcing is seen as de rigueur, everyone is doing it so it must be right – no! Wrong!

In a recent study by the Department of Trade and Industry that looked at the causes of outsourcing problems the top issue (23%) was that buyers had not set clear objectives for the outsourcing project.

The buyers did not know what their current performance was and so could not set clear performance targets for the outsourcing project. In other words, they outsourced just because they could, not because there was a clear business case for outsourcing.

And for the IT industry the situation is worse because it is unclear what is being outsourced. Is the IT function a product or a service? Or both?

When all people wanted was a PC on every desk running Office then it could be argued that the IT function was product based but now we want e-mail, internet and shared/common storage and so the IT function looks more like a service.  But the fundamental issue with outsourcing is attitude. While we continue to talk in terms of buyer/seller we are not modeling the pre-outsourcing situation. Before outsourcing, the IT department was part of the business; post-outsourcing they are seen as a supplier.

Outsourcing means partnering for mutual benefit. The relationship needs to grow in maturity and sometimes, we need to forgive our partner when things go wrong. If both customer and supplier organisations can work together to identify and resolve the cause issues then maybe, just maybe, the number of failed relationships might reduce and wisdom might increase. .

Output based contracts for outsourcing partnerships
SMS has extensive experience of assisting public and private sector organisations to deliver improved value from IT supplier partnerships. Our approach, based on the principles of lean management, can be used to set and manage effective output-based contracts for the supply of software services.

Contact SMS to find out how we can help you get more out of your outsourcing partnership.
sales@measuresw.com t. +44(0)1732 863760

 

Tony Rollo joins the SEI’s Benchmarking Initiative

The Carnegie Mellon® Software Engineering Institute (SEI) has always been associated with the promotion of qualitative assessment of software development and maintenance capability through the widely adopted CMMi improvement framework. However, the importance of complementary quantitative measures of performance is increasingly recognised as an essential factor for managing improvement.

Benchmarking provides a reference point for analysing performance. As well as providing the data on project performance needed to demonstrate the effects of process improvement, benchmarking enables organisations to gauge their performance and compare with others in their industry. Setting the specifications for the collection of benchmark measures assists the delivery of value from benchmark data. In recognition of the need to address these objectives, the SEI has formed the Performance Benchmarking Consortium.

The SEI launched this vendor and industry collaboration on benchmarking software project performance during April 2006. The objectives are to:

  • Provide tools and credible data for goal-setting and performance improvement;

  • Combine benchmark data from a multiple repository sources thereby creating a superset of information for benchmark and performance comparison.

The value that the initiative will provide is that it will establish a set of specifications for the collection and comparison of data. Companies will be able to utilise the resultant collection of data to achieve their business goals.

ISBSGS collaboration

Dr A.L. Rollo (Tony) of Software Measurement Services was invited to join the consortium because of his expertise in developing the ISBSG standard benchmarking process (downloadable from www.isbsg.org).

The SEI initiative could be seen as a competitor to ISBSG, however the ISBSG take the view that it supports their overall aim of improving industry performance and is happy to support it.

Tony therefore joined the Performance Benchmarking Consortium in December of 2006 as a representative of the ISBSG. He attended a workshop meeting in January of this year and is participating in a working group responsible for specifying the measures that will form the initial set of benchmark data. It is anticipated that the specification work will be completed by the next workshop, to be held in Pittsburgh in April.

Once that work is completed, a suitable database and web-based front-end will be constructed. This will be followed by a field trial utilising data donated by the various vendors involved. The specifications and instruments will be reviewed following the field study and any lessons learned will be incorporated in guidelines for data submitters. The industry members of the consortium will then be invited to submit some project data. In the future it is possible that performance data will form a part of the data required to be submitted during a SCAMPI appraisal. In any event, this initiative is valuable in raising the profile of benchmarking and helping to make organisations aware of the benefits which can be delivered by judicious use of benchmarking.

Further issues of this newsletter will contain updates to keep readers informed of the progress of the performance benchmark repository.

Margaret Smith launches Thought Leadership Workshop series

 

SMS and TBL are launching a series of interactive evening workshops for executive managers.

Each event will address a specific issue and examine the problems faced and some solutions. The inaugural series will look at How to optimise the business value derived from IT.

The first workshop in this series will consider the question from the perspective of the Chief Information Officer (CIO) or equivalent role. Delivery of value remains a key strategic issue whether your software-intensive services are insourced or outsourced.

Subsequent workshops will widen the debate to look at the same issue from the perspective of:

The Chief Operations Officer (COO)

The Chief Financial Officer (CFO)

The Chief Executive Officer (CEO)

The Head of Risk Management.

The Head of Compliance.

Each workshop presents a guest speaker who is a leading authority on the subject and speaking from a business background. The workshop format is that of a facilitated debate and provides ample opportunity for participation by attendees.  Attendance is by invitation only as each workshop will include a maximum of twelve delegates to allow participants to shape the discussion and future discussion topics.

SMS will shortly be issuing invitations to the first event "How to optimise the business value derived from IT: the CIO's view", to be held in May with guest speaker Margaret Smith.

Margaret is former CEO of CIO Connect, the premier CIO Networking forum.  She is also the former CIO of Legal and General and was a member of L&G’s UK Board of Directors for 15 years. Her career includes extensive IT and management experience with a variety of blue chip companies. She is currently an independent consultant advising companies on business and IT strategy.

If you are interested in participating in the workshop, please contact Grant Rule of SMS or Keith Jackson of TBL, or e-mail events@measuresw.com.

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European SEPG 2007

The European SEPG™ conference brings together world leaders, innovators and practitioners to explore the role and practice of process improvement in competitive global enterprise. It demonstrates how organisations are developing skills and approaches to meet the needs of rapid change, and how they are incorporating multiple models into their improvement efforts.

Held in Amsterdam on 11th-14th June, the European SEPG­™ provides four days of keynotes, tutorials, workshops, panels, presentations, meetings and vendor exhibition,

It also sets the stage for the Software Engineering Institute's annual European showcase, where the Institute's latest developments, research and findings are reported and debated.

SMS has been a sponsor of every European SEPG and is pleased to be participating in the 2007 event. Grant Rule (Managing Director of SMS) will be presenting "Implementing CMMI-based process improvement using the principles of Lean Engineering" and has also been associated with the organization of the increasingly popular Measurement Symposium.

Conference attendees are invited to join the SMS Birds of a Feather session on Tuesday 12th June to discuss “Process Improvement in a Lean Environment”. Or visit us in the exhibition hall

SPECIAL OFFER: registration discounts available until 23rd March 2007

Details and conference registration www.espi.org/sepg/

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Managing and reducing risk.

 

The 11th Software Measurement and Improvement Forum will be held on 17th May.

Register for your free place at http://www.smsexemplar.com/smif

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Practical Use of FPA

 

SMS is running a 2-day public training course offering an introduction to the IFPUG 4.2 functional size measurement method.

The course offers a practical introduction to the principles of software measurement and how these can be applied to understand, measure and manage software requirements.

It will be presented by Tony Rollo, and takes place on 28th/29th March at the SMS Training Suite in Kent. Course fee £750. Places can be registered at smsknowledge.co.uk/practicalifpug.

A similar course on COSMIC FFP for Sizing & Estimating MIS and Real-Time Software Requirements will be scheduled for April 2007.

Please contact events@measuresw.com if you wish to reserve a place on this course.

 

Software Measurement and Improvement Forum Report: Delivering business value
There is a general consensus that it is important for IT to deliver value to the business, but views on how this can be achieved are much more diverse. At the last SMIF on 14 February, Graham Lawder looked at the experience of the Australian Government SouthernScope project. Establishing software as a capital asset meant it became valued and measured accordingly. This facilitated robust, evidence-based decision-making backed by verifiable evidence. There was increased understanding of the cost/effort drivers impacting IT, enabling appropriate levels of funding to be established and maintained for IT generally and for IT teams.

Forum members had a number of questions and comments about this approach, which were further explored in a lively discussion led by Graham Berrisford. Graham summarised some of the metrics that are typically collected and invited views on which of these were useful for demonstrating value. The conclusion has to be that the first step for establishing effective measurement to support the delivery of value is to recognise that value can only be defined by the end customer.

The forum concluded with Ken Dymond's presentation on the role of metrics in realising and demonstrating the benefits of process improvement. Metrics come from completed tasks/projects/phases; outputs; and task hours.

They should be used to inform the view of the product flow. As long as the product flow is in turn related to business goals, this view of the project lifecycle keeps activity focussed on the delivery of value. Definition of value remains a key issue, but the main drivers of any business are Quality, Productivity and Timeliness.

Finally, Ken recommended learning to LLAFF – applying metrics to Lessons Learned And Feed Forward. The Software Engineering Process Group (measurement and process improvement) needs to make a difference to the next phase or project. The software metrics programme should never be regarded as an add-on. It is an essential factor in improving business performance.
Improvement Champion
is published by Software Measurement Services Ltd.
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Contact: Sue Rule,Editor
s.rule@measuresw.com
Tel: +44(0)1732 863 760 
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