IT Mark and CMMIIntegrated quality models for
software companieseconomic aspects
George SharkovDirector
European Software Institute - Center Bulgaria
For internal educational use only! All data copyrighted by ESI, SEI, ESI Center BG, or respective sources as indicated
Presentation content
• ESI Center Bulgaria Profile
• IT Mark - the approach for increased competitiveness of SMEs
• Short profile of the CMMI related activities under the framework of RCI/USAID
• Conclusions
ESI & ESICenters Alliance
ESIBilbao, Spain ESI Center Bulgaria
Sofia
ESI Center SSEACShanghai, China
ESI CenterVictoria, Australia
ESI Center UNISINOSRio Grande do Sul, Brasil
ESI Center Tec de MonterreyGuadalajara, Mexico
ESI Center Bulgaria2003 – PPP: State Agency
ICT, BASSCOM, ESI
CMMI, BITS. ITMark, ITcard
ESI Center Bulgaria2003 – PPP: State Agency
ICT, BASSCOM, ESI
CMMI, BITS. ITMark, ITcard
ESI (Bilbao, Spain)Established 1993, by EC & Basque Govt.
ESI Center Bulgaria (established 2003)
Recognition for regional capability
and
Solution for industry maturity and competitiveness in Eastern Europe
COMPETE BY EXCELLENCE !
ESI Center Bulgaria - a successful PPP
Founders
PartnersState Agency on IT and Communications
United NationsDevelopment Program
www.ict.bg www.undp.bg
Compete by excellence – what is escellence?
Corporate Excellence is a feature of an organizational entity that manifests how incomparably excellent it is when assessed adhering to success criteria (ISO, CMMI, 6 Sigma etc.); excellence refers always to excellent performance concerning the best methodologies in the world and it manifests in official certification according to them.
Corporate excellence PERSPECTIVES
Corporate excellence is a balanced model. Kaplan and
Norton structured it in four perspectives:
• Customers perspective • Financial perspective• Processes perspective• Learning perspective
Corporate excellence – FINANCIAL
The RESULT produced by the corporate excellence is high profitability
– The major goal of the companies is to produce profit for their shareholders rather than have the “ideal company”
– Corporate excellence is a tool for sustainable financial results
– The key social impacts of corporate excellence are higher employment and increased fiscal stability
Corporate excellence – CUSTOMERS
The corporate excellence is CERTIFIED by the customers
Understanding, predicting and managing the customers expectations are critical:
low cost <-> creativity and efficiencycoding <-> complex solution outsourcing <-> partnership with the clientscompetition <-> “coopetition”
The right moment to position the region byunique long-term competitive advantages – talent, innovation, quality!
Corporate excellence – INTERNAL
The corporate excellence is BASED on good internal processes “The quality of a
product is largely determined by the quality of the process that is used to develop and maintain it.”
Based on TQM principles as taught by Shewhart, Juran, Deming and Humphrey.
PROCESS
Heroiceffort
Maturesoftwarebusiness
TYPICAL!Unprecedented
systemPR
OD
UC
T
Bad Good
Good
Cost of Quality (CoQ)
Crosby describes Cost of Nonconformance as the extra cost incurred because a product or service wasn’t done right the first time.
Cost of NonconformanceCost of Conformance+
= Cost of QualityCost of Quality
Internal Failures + External Failures
Prevention+ Appraisal
Cost Categories
Process unpredictable, poorly controlled and reactive
Process characterized for projects and is often reactive
Process characterized for the organization and is proactive
Process measuredand controlled
Focus on processimprovement
Quantitatively Managed
Performed
Managed
Optimizing
Defined
1
2
3
4
5
CMMI maturity levels – the standard
Source: Mike Phillips, CMMI V1.1 and Appraisal Tutorial
• Requirements flow in.• A product is (sometimes) produced by some amorphous process.• The product flows out and (we hope) works.
•Requirements flow in.•Plans are developed in accordance with policies.•Activities are performed in accordance with plans.•Measurements and reviews occur at defined points.•The product flows out and (usually) works
Commonality among projects allows more uniform estimation of performance.
Use of statistical and other quantitative techniques in managing the processes and results
Measurably increased process capabilities
How widely are CMMs used?
Source: SEI, Process Maturity Profiles for SW.CMM and CMMI, March 2006
SW-CMM
CMMI
What Types of Organisations use the CMMs?
SW-CMM
CMMI
Source: SEI, Process Maturity Profiles for SW.CMM and CMMI, March 2006
Time to move up
Source: SEI, Process Maturity Profiles for SW.CMM and CMMI, March 2005
Corporate excellence for SMEs
How to support local organizations, vast majority of which are SMEs, to
achieve corporate excellence?
Compete by excellence
Capability Maturity Model IntegrationCUSTOMIZED APPROACH IN CONSULTING AND APPRAISALS
Balanced IT Scorecard“TRANSLATES” CORPORATE STRATEGYINTO ACTIONS ESI Center Bulgaria is a partner of those
who model and improve integrated processes, strategic management, software engineering and quality management.
“We work with software development and IT companies, high-tech enabled manufacturing and telecommunications, banks, financial and insurance institutions, defense and security, public administration.”
Information Technology MarkQUALITY SEAL FOR SMALL&MEDIUM ENTERPRISES
ITMark characteristics
• Inexpensive, quick and cost effective
• In addition to the Software & Systems processes the program includes appraisals of Business Management and Information Security Management, ignored by other models
• Based on world recognised models, utilizing solid and proven appraisal methodologies, which are repeatable, reliable and useful for benchmarking
• A good mechanism to proceed, if desired, step by step towards the complete certification in accordance with the best available standards and models
• Improve business performance (Technical, Security, Management)
• Gain market recognition for IT Capability• Foster a culture of Continuous Improvement
– Enhanced awareness of one’s own IT development capability, identification of strengths and weaknesses, as well as improvement opportunities
– An improvement roadmap through the successive grades of Maturity and its compatibility and complement to other existing models
Benefits
Challenges for SMEs excellence
• I.T. SMEs feel that
• SMEs use the existing models, but only if required by their customers
• An SME-sized model should help them– Improve their software processes – Improve also very important business processes and marketing – Get into the Quality movement– Recognition of excellence
Models for corporate excellence are too “heavy”
Only big corporations can afford the huge investments
…
Business
Typical custom
er
Micro & Small
SME
Large-E2-3 weeks, 2 assessors
7-8 days, 2 assessors (L2)
3 days, 1 assessorLevel 2Class C (SAL3)
102
Interview
Level 2Class B
102
Doc. Review
SPISecurity
InfoSec Snapshot
Level 3Class B
ITMark Structure
Internal P-tive
Financial P-tive
Customer P-tive
Learning P-tive
ITMark Composition
5 steps to go• Awareness session • Business processes appraisal – 10square model• Information Security Management appraisal – ISO
17799• Software & Systems Processes appraisal – CMMI
(Class C & B) assessment• Presentation of results and opportunities for improvement
PrerequisitesIn-company course (6 hours)Recommended: Qualified people
What is innovative?What is innovative?
• Aimed at Micro and SMEs, yet scalable to large enterprises• Integrated assessment for
– Business Management, – Information Security Management– Software and System Processes
• Cost-effective, quick and affordable, still based on well-known and recognized standard models
• Tangible milestone on the roadmap to maturity• Adopted by donor and business-support programs (GTZ, USAID, EBRD/BAS)• Objectively measures SMEs IT/SW industry maturity – basis for industry
competitiveness support programs• Market recognition – pilot implementations in:
– West Europe - Spain, France– Bulgaria, Romania, Macedonia– ESI Alliance – Brazil, Mexico, Australia
Acknowledgement of Successful AchievementThis is to acknowledge that
Was appraised in full accordance with the requirementsof the I.T. Mark Appraisal Method
COMPANY XXXfor the software development and services
The organisation has achieved I.T. MarkThe SAM PA was deemed as Not applicable and thus not included in the scope of the assessment
Assessment ID: ITM06006Appraisal Date: 02.03.2006
Inigo Garo I.T. Mark Appraiser No. 2006-LA01
Appraisal based on the CMMI® model,10-Squared® model and ISO/IEC 17799 standard. List of Certified Organisations at www.esi.es/ITMark
I.T. Mark is a Trademark of the European Software Institute.
®CMMI is registered in the U.S. Patent and Trademark Office of the Carnegie Mellon University.
RCI/USAID on ITProject concepts
Development of the base for ICT
cooperation through quality
Goal 1
Creation of CMMI implementation
capacity in the region
Goal 3
Building awareness and initial training on
CMMI
Goal 2
project infrastructureinitial analysis
CMMI/ITMArk implementation in the
region
Goal 4
implementation capacity
leadership and decision-makers’ commitment
leadership and decision-makers’commitment
INCREASED REGIONAL COMPETITIVENESS
Direct results
• G1 Development of the base for ICT cooperation through quality Field visits in 6 countries: Armenia, Bosnia and
Herzegovina, Macedonia, Serbia and Montenegro, Ukraine and Romania catalyzed the software process improvement thinking among the local ICT companies.
• G2 Building awareness and initial training on CMMI
4 one-day “CMMI for Senior Managers” workshops were organized In the courses participated 78 high-level decision-makers. 83% of participants declared that they will apply the CMMI methodology in their work. In addition, company managers expressed deep interest in the ITMark methodology, which is oriented towards the specifics of CMMI implementation in small enterprises.
Direct results
• G4 CMMI/ITMArk implementation in the region
• 10 companies, in cooperation with the ICT Associations and ESI Center Bulgaria, have launched simultaneous ITMark implementation programs in order to be able to cooperate during the implementation and certification phases and to position the regional ICT sectors as a mature industry. They have already gain benefits from this program, both on company and on national/regional level.
• 6 companies have launched ambitious programs aimed at official CMMI certification key message is to position the SEE as a region with mature IT industry.
General statistics – Implementation Phase G4
More than 116 people from 16 companies took part in practical workshops and appraisals
Structure of the participants
Developers25%
QA managers12%
System Administrators
2%
Finance/Marketing/Sales
managers16%
Project Managers/
Team leaders12%
Development/Product
managers7%
COO/CTO7%
CEO/ Executive Managers/ Presidents
19%
Results conclusion
• CMMI encourages organizations to address the full product development life cycle, independent of whether the product is a software system, an automatic teller, a mobile phone etc.
• CMMI-based process improvement can provide three primary quantitative classes of benefits for IT SME:– Cost: the cost to find and fix a defect is reduced, average costs
for software development is improved;– Schedule: the percentage of milestones met and predictability in
meeting schedules are increased;.– Return on Investment: positive returns on investment from
CMMI-based process improvement.
• Awareness training and implementation processes have created a large regional ICT Community of Practice and a widespread regional cooperation of many ICT stakeholders.
Performance Improvements over Time by Category
Performance Category Median Improvement
Cost 34%
Schedule 50%
Productivity 61%
Quality 48%
Customer Satisfaction 14%
Return on Investment 4.0 : 1
Source: SEI, Performance Results of CMMI®-Based Process Improvement, 2006
Cost performance improvements
Source: SEI, Performance Results of CMMI®-Based Process Improvement, 2006
Cost Savings at DB Systems GmbH
Customer Satisfaction
Source: SEI, Performance Results of CMMI®-Based Process Improvement, 2006
Customer Satisfaction at Siemens
Product Quality
Source: SEI, Performance Results of CMMI®-Based Process Improvement, 2006
Quality Improvement at Siemens
Account Productivity (FP/FTE)
Source: SEI, Performance Results of CMMI®-Based Process Improvement, 2006
Productivity Improvement at IBM Australia
Schedule Improvement
Source: SEI, Performance Results of CMMI®-Based Process Improvement, 2006
Productivity Improvement at IBM Australia
Results Macro Level
ORGANIZATIONAL INFRASTRU-CTURE IN PLACE
ORGANIZATIONAL CAPACITY BUILT
ORGANIZATIONALEXCELLENCE AND SUSTAINABILITY
PROCESS IMPROVEMENT CAPACITY IN PLACE
INCREASED COMPETITIVENESS
ICTLEADERSHIP
Results oriented towards building of organizational capacity
Results oriented towards increased competitiveness of the ICT sector
Regional brand:
Recognizing the value to the Balkans and Eastern European region in developing a global brand for leadership in ICT, the parties to this MOU hereby agree to work together to advance their shared interest in promoting ICT-enabled excellence, innovation, and jobs and investment growth.
MoU in preparation since March 2006
Balkans & Eastern EuropeModern Software and IT Hub
Capability Capacity >50,000 developers
Companies/references
Market presence
FDIs in ICT
Maturity Quality (ISO, CMMI, ITMark)
Innovations
Collaboration
Techno parks
Business COOPETITION !!!BALKAN-WARE
But… “B-WARE” !!!
Who-does-What: Identifying champions for each pillar/country
• Initiated by ICT associations – Romania, Bulgaria, FYROM, Greece, Turkey, Serbia …
• Engaging International support – USAID, GTZ, EBRD, UNDP …• Forming the Workgroup (ESI) to establish priorities & plan;
identify the brand?• Promoting Exemplary Projects for
– Linking cities, techno and business centers - ???– Involving Universities - ???– Challenging Governments & States to improve business
climates and accelerate eGov - ???– Promoting Opportunities to Investors???– Management and business culture and practices???
• Synchronize governmental programs? EU accession?