it mark and cmmi integrated quality models for software companies economic aspects george sharkov...

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


Time to move up


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


Cost Savings at DB Systems GmbH

Customer Satisfaction


Customer Satisfaction at Siemens

Product Quality


Quality Improvement at Siemens

Account Productivity (FP/FTE)


Productivity Improvement at IBM Australia

Schedule Improvement


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?

Q&A

Sample roadmap

to success

George [email protected]

www.imark.org www.esicenter.bg

it mark and cmmi integrated quality models for software companies economic aspects george sharkov...

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