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Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
Software testing services growth report oct 11
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Software testing services growth report oct 11

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Great report on growth of software testing services.

Great report on growth of software testing services.

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  • 1. Growth MarketSoftware-TestingMarket Trends, Service Providers, andSuccess FactorsA study by Pierre Audoin Consultants GmbHon behalf of SQS Software Quality Systems AGJune 2011
  • 2. Growth Market – Software Testing 2 I. TABLE OF CONTENTSContents 1.   Introduction .................................................................................................. 4   2.   Concept of the Study ................................................................................... 5   3.   Trends in Software-TestING and QualitY management .............................. 7   3.1.   Boom in Optimization of Test Activities................................................. 7   3.2.   Increasing Acceptance of External Testing Support ............................. 9   3.3.   Development of Demand for Dedicated Testing Services .................. 12   3.4.   Development of Demand for Blended Service Delivery in the Scope of Testing Services .................................................................. 12   4.   Success Factors in Software Testing ........................................................ 16   4.1.   Factors for Successful Collaboration with Testing Service Providers . 17   4.2.   Important Factors in the Selection of a Testing Service Provider ....... 21   5.   SQS: Successful in the MarkEt as an Independent Testing Specialist...... 22   5.1.   Overview of SQS ................................................................................ 22   5.2.   Competency Profile of SQS ................................................................ 23   5.3.   Service Pledges of SQS...................................................................... 24   5.4.   Blended Service Delivery.................................................................... 25   5.5.   Transparent Attainment of Objectives and Performance-related Billing ........................................................................................................... 26   6.   Summary ................................................................................................... 28   © PAC 2011
  • 3. Growth Market – Software Testing 3 II. TABLE OF FIGURESFigures Fig. 1: Distribution of Size Classes within the Surveyed Target Group ................. 5 Fig. 2: Planning Status of the Companies Surveyed in respect of the Optimization of Testing Activities................................................................ 7 Fig. 3: Reasons Given by the Companies Surveyed for Optimizing Testing Activities......................................................................................... 8 Fig. 4: Organization of Testing Activities in the Companies Surveyed ................ 10 Fig. 5: Benefits in Software Testing through Collaboration with External Specialists ................................................................................................ 11 Fig. 6: Planning Status of the Surveyed Companies in the Collaboration with Testing Centers................................................................................. 14 Fig. 7: Reasons Given by Companies Surveyed for the Use of Testing Centers 15 Fig. 8: Expected Flexibility and Availability of Testing Team ........................................................................................................ 17 Fig. 9: Factors for Measuring the Achievement of Objectives of the Testing Team ........................................................................................................ 18 Fig. 10: Significance of Results-oriented Remuneration of Testing Services ........ 19 Fig. 11: Significance of Linguistic Capability in Testing Projects........................................................................................ 20 Fig. 12: Prioritized Competences of the Testing Service Provider ........................ 21 © PAC 2011
  • 4. Growth Market – Software Testing 41. INTRODUCTIONCompanies are focusing increasingly on the quality assurance of the IT applicationlandscape. It is pivotal for all IT operations and contributes considerably toprofitability and efficiency. Testing and quality management enable companies toaddress key challenges, such as incident-free support of business processes andefficient working practices for software users.Today companies around the world invest more than €50 billion per year inapplications testing and quality assurance. This area is of high strategicimportance as the results of this study underline: the vast majority of themanagers surveyed – 91 per cent – confirm that software testing and qualityassurance are among the most important IT disciplines in their company.Yet what form of software-testing and quality management lends itself to achievingthe greatest possible added value? How can expenditure and quality of testing beharmonized? What standards do companies expect from their testing activities andexternal testing service providers and how can such collaboration best beorganized?The survey conducted by Pierre Audoin Consultants GmbH (PAC), market analysisand strategy consultancy, and commissioned by SQS Software Quality SystemsAG (SQS), provider of software-testing and quality management services, answersthese questions. The introduction to this study, entitled “Growth Market – SoftwareTesting: Market Trends, Service Providers and Factors for Success”, analyzes thetrends and dynamics on the demand side. The studyʼs second section shows theopportunities and success factors in collaboration with external testing serviceproviders. The study also has a practice-oriented focus: the positioning of SQS isthen compared with the survey results and market analyses.The study is intended to help companies take decisions relating to organizing andperforming their testing activities to generate the maximum added value and toproperly evaluate the potential of permanent collaboration with providers ofsoftware-testing and quality management services. © PAC 2011
  • 5. Growth Market – Software Testing 52. CONCEPT OF THE STUDYThis study is based on a survey of 309 managers and IT decision-makersconducted by the independent market analyst PAC on behalf of SQS, serviceprovider for software-testing and quality management, between February and May2011.The participants in the survey provided information about the organization of theirtesting activities and set out the pros and cons of integrating qualified partners.They gave their assessment of how to optimize the performance of tests andmeasure the progress achieved. Finally, the respondents identified key criteria thata service provider needs to meet for software-testing and quality management andspecified the significance of managed services for testing.The target group comprises companies from all sectors from Europe and NorthAmerica with a minimum size of 1,000 employees and an IT team consisting of atleast 100 employees. Just under half of the organizations surveyed currentlyemploy between 1,000 and 4,999 employees, and a further 52 per cent have over5,000 employees. Composition of sample by number of employees 1,000 to 2,499 10,000 and more 2,500 to 4,999 Don’t know/no answer 5,000 to 9,999Share in percentage of companies, n = 309 24% 38% © PAC 2011 23% 15%Fig. 1: Distribution of Size Categories within the Surveyed Target Group © PAC 2011
  • 6. Growth Market – Software Testing 686 companies are headquartered in the DACH region (Germany, Austria,Switzerland), and more than sixty companies are headquartered in Great Britain,the USA, and in Scandinavia (Denmark, Sweden, Norway, Finland) respectively. Afurther 27 companies are based in the Netherlands.52 per cent of all decision-makers were heads of IT, Chief Information Officers(CIOs), Chief Operating Officers (COOs), or Chief Technology Officers (CTOs), and27 per cent were members of the management or managing board. A further 20 percent were responsible for their companyʼs testing activities as heads of ITdepartments.This report is aimed primarily at IT and corporate decision-makers who areresponsible for the area of software-testing and quality management or deal withthe handling and optimization of the test activities and processes and the selectionof and collaboration with testing service providers on the strategic and operationallevel. © PAC 2011
  • 7. Growth Market – Software Testing 73. TRENDS IN SOFTWARE-TESTING AND QUALITY MANAGEMENTThe awareness of the commercial added value of flawless, fail-safe corporateapplications is increasing. Alongside quality and security, the cost factor plays acentral part at a time of limited budgets. Companies are actively looking foropportunities to improve both the software itself and the organization of testing – atthe same time as optimizing the cost aspect.3.1. Boom in Optimization of Test ActivitiesThe majority of the companies surveyed are currently involved in optimizing theirtesting activities. At present around a third of companies find themselves in theoptimization phase. A quarter of interviewees confirm that optimization willcommence within the next twelve months, and a further eleven per cent within thenext 24. Optimization of testing activities is on the radar of a further eight per cent,but they have not yet set the date for implementation; and 13 per cent areconsidering optimizing testing activities, but have made no concrete plans as yet.The remaining companies are not currently considering optimization. Readiness to Optimize Testing Activities Yes, optimization is already in progress Yes, optimization to start in the next 12 months Yes, optimization to start in the next 24 months Yes, optimization is planned but starting point is uncertain Yes, readiness exists but no plans yet NoShare in percentage of companies, n = 309 10% 13% 32% © PAC 2011 8% 11% 25%Fig. 2: Planning Status of the Companies Surveyed in respect of the Optimization of Testing Activities © PAC 2011
  • 8. Growth Market – Software Testing 8Reasons for Optimizing Testing ActivitiesThe study investigated the motives that are prompting increasing numbers ofcompanies to opt for the optimization of their testing activities. The results showthat companies have identified software-testing and quality management as avaluable instrument in improving performance.At the forefront is desire to improve quality: in 61 per cent of companies the aim ofoptimizing testing activities is to enhance product quality; and 58 per cent hope toincrease quality and transparency within the testing processes. Almost half ofrespondents expect that the level of testing automation will increase as a result ofthe improvement measures. For 35 per cent of companies, optimization was aboutincreasing the objectivity of testing activities. What is interesting is thatcomparatively few respondents – just around a quarter – stated reducing costs as areason for optimizing testing activities. It is clear that companies see quality asmore significant. Reasons for Optimizing Testing Activities Increasing product quality 61 ..................................................... Increasing quality and transparency 58 of testing processes ..................................................... © PAC 2011 Increasing testing automation 46 ..................................................... Increasing objectivity of 35 testing activities ..................................................... Reducing costs of 34 testing activities 0 10 20 30 40 50 Share in percentage of companies that are currently preparing optimization, n = 279Fig. 3: Reasons Given by the Companies Surveyed for Optimizing Testing ActivitiesThe interviewees explained that benefits such as greater objectivity in thecompany’s testing activities can be best achieved in collaboration with adedicated, independent testing service provider. An increase in the automationof testing can be realized via long-term managed test services engagements. © PAC 2011
  • 9. Growth Market – Software Testing 9Reasons Hindering the Optimization of Testing ActivitiesThe majority of companies have the optimization of testing activities on their ITagenda. Only a small number of the companies surveyed have made no provisionfor adjustments in this area. They state that the organization is already managingits testing optimally (37 per cent), currently has different priorities (27 per cent), or isnot ready for optimization for economic or organizational reasons (13 per cent).3.2. Increasing Acceptance of External Testing SupportThere is currently a lot of interest in collaboration with professional serviceproviders for software-testing and quality management. The integration of aprofessional service provider, either on a by-case or more permanent basis, is away of achieving high quality whilst also increasing efficiency and effectiveness intesting. Testing is therefore one of the worldʼs fastest-growing areas within ITservices. According to PACʼs estimates, companies will spend a total of €30 millionon testing services in 2011. That corresponds to a proportion of around five percent of the total expenditure on IT services. PAC is of the view that the demand forprofessional testing support from service providers will further increase.The company survey shows consensus in the market: the vast majority of thosesurveyed agree that a suitable service provider can be used to optimize testingactivities.Longer-term testing engagements in the form of managed testing servicespartnerships based on strictly-defined service level agreements are becomingincreasingly important. According to PACʼs estimates, this form of selectiveoutsourcing is experiencing double-digit annual growth and is thus one of the mostdynamic segments within IT services.More than 90 per cent of respondents consider a longer-term, partnership-based collaboration in testing to be indispensible and view the agreement ofperformance indicators, such as are standard in managed test servicesagreements, to be crucial for success.The high demand is a result of three main trends: the significance of quality-oriented software-testing and quality management has risen with increasingcomplexity in IT and testing. Long-term collaboration with service providers is alsopopular among companies that want to improve the organization and performanceof their testing activities. Additionally, strategic considerations are gaining insignificance. Long-term external support is particularly attractive for companies that © PAC 2011
  • 10. Growth Market – Software Testing 10want to focus more intensively on their core competences and deploy their own ITresources for innovative projects.The survey conducted in the scope of the current study underlines the highacceptance of testing services: two thirds of the companies surveyed involveexternal service providers in their testing activities. The intensity of the collaborationvaries and ranges from occasional collaboration on projects through to permanentcooperation in the scope of long-standing managed testing services agreements,even if only a small proportion – mainly large companies – outsource all testingactivities to an external service provider. Where longer-term engagements areinvolved, the service provider, often also assumes responsibility for results andrisks, for example in respect of how fail-safe the applications are – alongside fixedtasks, the performance of which is ensured by service level agreements. The goalsof a long-term collaboration usually also include the optimization andstandardization of test processes, increasing the level of testing automation and theuse of consistent and proven methods, best practices, and suitable testing tools. ;401/.E1+.7/*76*C,-+./0*(2+.3.+.,- ())*+,-+./0*12+.3.+.,-*14,*5,46748,9*./+,4/1)): ;221-.7/1)*<547=,2+ >1-,9?*./37)3,8,/+*76*,@+,4/1)*-,43.2,*5473.9,4- A,0B)14*<547=,2+ >1-,9?*./37)3,8,/+*76*,@+,4/1)*-,43.2,*5473.9,4- C,-+*12+.3.+.,-*5,46748,9*,@+,4/1)):*./*514+*<)7/0 +,48*104,,8,/+-? ())*+,-+./0*12+.3.+.,-*14,*5,46748,9*,@+,4/1)):*<)7/0 +,48*104,,8,/+-? ;3,41))*./ D7B-,*1/9*,@+,4/1)*+,-+./0*-5,2.1).-+-*B-,9ID14,*./*5,42,/+10,*76*27851/.,-J*/*K*!$L &" !" !!" F*G(H*#$&& %" #$" #!"Fig. 4: Organization of Testing Activities in the Companies Surveyed © PAC 2011
  • 11. Growth Market – Software Testing 11Added Value through External Testing ServicesThe study examined the benefits that companies associate with the testing-servicesmodel. For companies that already use external support, a clear advantage isimproved access to qualified testing specialists. Companies that seek to reducetheir internal IT expenditure also opt for external testing services. The clear majorityof 85 per cent confirms that collaboration with external service providers forsoftware-testing and quality management cuts costs and reduces the burden oninternal IT teams, freeing them up for innovative projects. More than 80 per cent ofrespondents confirm that collaboration with an external testing-service providerreduces testing times and increases flexibility in the testing process. The clearmajority of respondents also identified benefits in the increased standardization oftesting processes. Benefits in Software Testing through Collaboration with External Specialists Large benefit Small benefit No benefit Improved access to qualif. workforce 48 38 14 .......................................... Reduction of testing costs 48 37 15 .......................................... Reduction of burden on © PAC 2011 internal IT/testing specialists 43 43 15 .......................................... Reduction of testing times 41 44 14 .......................................... Greater flexibility in testing process 41 44 15 .......................................... Standardized testing approach 38 45 17 0 100 Share in percentage of companies that deploy external testing specialists, n = 207Fig. 5: Benefits in Software Testing through Collaboration with External SpecialistsAveraged out, the specified factors are considered to be both large and smallbenefits in roughly equal measure. Users of testing services stated that certainbenefits are produced, in particular in the scope of longer-term managed testing-services relationships. In many cases objectives such as the standardization oftesting processes are a firm feature of corresponding contracts. © PAC 2011
  • 12. Growth Market – Software Testing 123.3. Development of Demand for Dedicated Testing ServicesMost expenditure is incurred for testing activities that are part of morecomprehensive IT service agreements. As well as testing, these often incorporatethe development, operation, and maintenance of IT systems. In contrast to this arededicated contracts for testing and quality management, which today accounts formore than a third of the budget for external testing services, a trend that is on theincrease.PAC anticipates that the collaboration with specialized partners in the field ofsoftware testing will rise as customers increasingly demand independent testsof the application landscape. The survey provides clear evidence of this: 91 percent of managers surveyed consider the independence of the testing team andthe product development team to be an important or very important successfactor.The dedicated award of contracts, particularly in the scope of longer-term managedtest services agreements, is increasing in significance as the market matures.Companies that separate out software development and testing benefit in particularfrom a clear allocation of roles, improved transparency of services and test quality,and also the objectivity of testing performance that is guaranteed by the fact thatthe testing specialist is independent of the development team. As experts in theirfield, focused testers also bring special competences to the table. Their routine andtheir use at an early stage in the development process contribute to the efficiencyand effectiveness of testing performance.3.4. Development of Demand for Blended Service Delivery in the Scope of Testing ServicesFor many companies today, global service provision is a factor that impacts quality,flexibility, and price of the testing engagement. The study shows that “blendedservice delivery”, i.e. the use of local resources in combination with near- andoffshore resources in testing centers, has a high importance: the clear majority (76per cent) of companies that have outsourced part or all of their testing activities toan external service provider currently perform software tests in collaboration with(near-/ offshore) testing centers. © PAC 2011
  • 13. Growth Market – Software Testing 13Optimum Resource Distribution in Blended Service DeliveryThere is no optimum composition of resource allocation that applies to allcompanies. It is dependent both on individual objectives that organizations pursueby using blended service delivery and the maturity of the company in terms ofcollaboration and control of globally-allocated resources. In order to categorize theuse of near- and offshore resources into companiesʼ current IT strategynonetheless, the interviewees were asked about the ideal distribution of testingactivities.The survey concluded that the number of companies that desire a high proportionof near- and offshore activities is currently relatively low: only 14 per cent of thosesurveyed can imagine more than half of the testing activities being performed near-and offshore. What is also interesting here is that no interviewee wants tooutsource all testing tasks to a testing center. At the same time almost allcompanies consider it important to continue to perform a certain proportion oftesting activities internally. © PAC 2011
  • 14. Growth Market – Software Testing 14Future Usage of External (Near-/ Offshore) Testing CentersThe study underlines the fact that testing centers are continuing to increase insignificance for performing testing services. Asked about future planning, threequarters of all interviewees confirm that they are considering the usage of external(near-/ offshore) testing centers. While for the majority this is due in the short- ormid-term, the rest of the companies have no precise schedule. However, the furtherdevelopment of demand can be clearly plotted: interest in the use of blendedservice delivery is constantly increasing. ?);2837)01,@2=00/0A,8.,=,B>)=C D,E..*58C)F,G)*1/0A,H)01)C ()*+,-)./0/1)23,4/15/0,15),0)61,$",78015*, ()*+,-)./0/1)23,4/15/0,15),0)61,",78015*, ()*+,9:1,1/7),;8/01,/*,:0<0840, ()*,9:1,08,-)./0/1),;2=0*, >8,L5=C),/0,;)CM)01=A),8.,M87;=0/)*+,0,N,!K% "# !"# I,@JH,"K$$ $$# $&# $%#Fig. 6: Planning Status of the Surveyed Companies in Collaboration with Testing Centers © PAC 2011
  • 15. Growth Market – Software Testing 15Drivers for the Use of Testing CentersFor the companies surveyed, the use of external (near-/ offshore) testing centers,and thus of blended service delivery, serves a range of purposes. For more thanhalf reducing costs (61 per cent) and increasing the quality of service provision (54per cent) plays a more important role in their considerations. 48 per cent stated theincreasing availability and flexibility that can be achieved e.g. through globaldistribution and across different time zones as a further motive. Around a quarter ofthose surveyed consider access to additional competences to be an importantargument for the integration of near- and offshore resources into their testingactivities. (610-1/;05/O1,-. 6/=P(65 IQ;;1?05(A/R(12,-./N(-2(5 ()*+,-./+0121/ !" 333333333333333333333333333333333333333333333333333 4-+5(61,-./2?(/B*68,2:/8(7(8/ #$ L/MCN/&F"" ,-/1(57,+(/)(8,7(5:/ 333333333333333333333333333333333333333333333333333 4-+5(61,-./676,869,8,2:/6-)/ $% ;8(<,9,8,2:/=>650*-)/2?(/+80+@>A/ 333333333333333333333333333333333333333333333333333 C++(11/20/6)),2,0-68/ &% +0DE(2(-+,(1/ F "F &F GF $F #F !F H?65(/,-/E(5+(-26.(/0;/+0DE6-,(1/2?62/65( E86--,-./20/*1(/6/=-(65 I0;;1?05(A/2(12,-./+(-2(5J/-/K/&G!Fig. 7: Reasons Given by Companies Surveyed for the Use of Testing CentersReasons for not Using Testing CentersCompanies that do not currently use an external (near-/ offshore) testing centergave the reasons for not doing so: a good third of companies will prefer to continueto perform testing services locally in the future. A quarter of companies currentlyhave other priorities. 14 per cent of companies operate their own testing center.Further companies stated that they have not yet found a suitable partner forimplementation or already collaborate with a fixed partner. © PAC 2011
  • 16. Growth Market – Software Testing 164. SUCCESS FACTORS IN SOFTWARE TESTINGTesting activities are closely linked to the challenges that companies currently face:flexible reaction to changes on the market and customer side, high speed ofintroduction of new products through optimized “time-to-market”, and greaterefficiency in delivering services.The results of the study show that for most companies today it is not a case ofwhether to optimize their testing activities in collaboration with an external serviceprovider, but rather the challenge of identifying the optimum approach for doing soand selecting the correct partner. © PAC 2011
  • 17. Growth Market – Software Testing 174.1. Factors for Successful Collaboration with Testing Service ProvidersAvailability and Flexibility of Testing TeamsSpeed and flexibility are at the forefront for companies in terms of their testingactivities. Demand is particularly high as a result of the intensive competitionlandscape. The majority of companies surveyed – 60 per cent – expect high to veryhigh availability and flexibility from a testing team. Maximum availability ispermanent, “around the clock” readiness (24/7). The use of globally-distributedresources helps guarantee maximum availability and flexibility. Availability and Flexibility Expected of Testing Team Maximum (24/7) Low (8/5) High (10/7) Don’t know/no answer Medium (10/5) Share in percentage of companies that deploy external 4% 6% 18% © PAC 2011 30% testing specialists, n = 207 42%Fig. 8: Expected Flexibility and Availability of Testing TeamClose harmonization and seamless communication are equally significant. Almostall interviewees demand direct and immediate feedback to queries from the testingteams. © PAC 2011
  • 18. Growth Market – Software Testing 18Evaluation of the Achievement of Objectives by Measuring SuccessThe measurement of success plays a key role in the scope of testing services. Twothirds of the companies surveyed regularly measure whether the testing team isachieving its agreed objectives by using selected key performance indicators(KPIs). Of these, 76 per cent monitor whether deadlines are met. 72 per centevaluate the number of test cases performed and test coverage. A further 66 percent actively measure errors in production. Factors Used to Measure Testing Team’s Goal Attainment Yes No Don’t know Measurement of 76 20 4 adherence to deadlines .............................................. Cost and number of 72 24 5 test cases performed .............................................. © PAC 2011 Active measurement of 72 20 8 test coverage .............................................. Active measurement of 66 26 7 errors in production .............................................. Detailed KPIs 26 57 17 0 100 Share in percentage of companies that measure the testing team’s goal attainment, n = 208Fig. 9: Factors for Measuring the Achievement of Objectives of the Testing TeamHowever, Figure 9 shows that around a quarter of companies collect a detailed setof KPIs. This result of the study shows that there is further optimization potential inmanaging testing quality. Collating a selection of pre-defined performanceindicators is usual for managed test services. They provide for transparency andincrease the transparency of the testing activities performed. © PAC 2011
  • 19. Growth Market – Software Testing 19Results-oriented Remuneration of Testing ActivitiesCompanies that already use external support in testing have strict requirements interms of professional performance of services and fulfillment of objectives. 97 percent state technical competence of the testing team to be an important or veryimportant criterion. 89 per cent of managers surveyed consider flexible billing oftesting services based on results actually achieved to be important or veryimportant. Only a few interviewees stated that this aspect is less important. <)=)>23?),0@,A-==-3B,0@,C);1-3B,D)*>-?); 03,<);E=1; 0*-)31)F,A2;-; ()*+,-./0*1231 501,-./0*1231 4./0*1231 60371,8309:30,23;9)*DM2*),-3,/)*?)312B),0@,?0./23-);,1M21,F)/=0+ # &# !"#)N1)*32=,1);1-3B,,;/)?-2=-;1;O,3,P,K"& G,HIJ,K"LL $%#Fig. 10: Significance of Results-oriented Remuneration of Testing Services © PAC 2011
  • 20. Growth Market – Software Testing 20Significance of Linguistic Capability in Testing ProjectsLanguage provides an additional facet to communication. Multi-lingual capability isindispensable, above all in globally-operating companies and for internationaltesting activities. 39 per cent of companies surveyed consider this aspect to be veryimportant, and for a third it is important. The principal requirement is for contactswho can speak the language of the respective country and English. 7(8(912:(+/;+<680, 8,2=618+>1.1?,8,0* ,2+@(A0,2=+B)/C(:0A ()*+,-./)0120 3-./)0120 4/5+62,-./)0120 HI1)(+,2+.():(201=(+/;+:/-.12,(A5+2+J+!F" %&# !"# D+BE>+%FGG !$#Fig. 11: Significance of Linguistic Capability in Testing Projects © PAC 2011
  • 21. Growth Market – Software Testing 214.2. Important Factors in the Selection of a Testing Service ProviderSuccessful collaboration with a provider of testing services confronts companieswith the challenge of finding a suitable partner. This demanding task is dependentabove all on an evident core competence where the deciding factor is that theservice provider concentrates on testing. Equally important is for the serviceprovider to have an evident quality orientation, which just under two thirds of thecompanies surveyed for the study consider to be highly important, as the figurebelow illustrates. Companies that already work with an external testing serviceprovider were considered.Further necessary competences for the majority of respondents include industryand business-process knowledge. Around half of companies expect a provider ofsoftware-testing and quality management to have detailed knowledge of theunderlying technologies and the products to be tested. Methodological competenceis key for 44 per cent of respondents in choosing a service provider. Priority of Criteria Selecting a Service Provider for Testing Activities Highest Priority Medium Priority Low Priority Core competence/ 62 33 5 focus on testing .............................................. Quality orientation 60 31 8 .............................................. © PAC 2011 Industry/ process knowledge 57 34 9 .............................................. Technological/ product 51 40 9 knowledge (e.g. SAP) .............................................. Methodological competence 44 45 11 0 100 Share in percentage of companies that deploy external testing specialists, n = 207Fig. 12: Prioritized Competences of the Testing Service Provider © PAC 2011
  • 22. Growth Market – Software Testing 225. SQS: SUCCESSFUL IN THE MARKET AS AN INDEPENDENT TESTING SPECIALISTThe previous chapter looked at the trends and success factors in relation to testingservices. The results of the study show that the majority of companies are workingon optimizing their test activities and are aware of the added value that professionalexternal support offers. Dedicated testing services providers are beingcommissioned increasingly frequently on the basis of managed test servicesagreements to achieve maximum leverage of the benefits.Chapter five presents the competences, service approach, and differentiationfeatures that characterize SQS in the view of the PAC market analysts.5.1. Overview of SQSThe IT software service provider SQS specializes in software-testing and qualitymanagement. SQS currently generates revenues of over €160 million. Thecompany has its head office in Germany and operates globally. True to the motto“wherever our customers are”, SQS is represented at locations in ten countriesacross Europe and in the USA, Egypt, India, and South Africa.SQS positions itself in the growing software-testing market as a specialized andindependent provider of testing with a particular focus on managed testservices.The company has almost 30 yearsʼ experience in the testing context. An importantdifferentiating feature over the competition is its exclusive focus on services in thisarea. With a resource strength of currently 2,000 employees, SQS is one of theleading specialists in testing services in Europe and globally. © PAC 2011
  • 23. Growth Market – Software Testing 235.2. Competency Profile of SQSThe results of this study show that competence and reliability of the testing teamare the ultimate in seamless service provision. Further, the objectivity of the testingteam and its independence from the product development team are highlyregarded. In PACʼs view, SQS meets these requirements.The scope of the company’s services includes comprehensive software-testingand quality management services that cover all requirements of the customer inthis area. SQS also offers its own software tools for quality assurance insoftware development projects.Considering the services along the value-creation chain, SQS offers “end-to-end”services, beginning with testing consultation and the performance of testing auditsand assessments of testing specifications, performance, automation, and trainingup to software quality assurance and controlling the testing activities. The tool boxknown as SQS-TEST®/ Professional Suite consists of proven modules for testingmanagement, test design and performance, and the automation of testingprocesses. The solution suite also comprises a platform for integrating variousapplications in software testing.From the point of view of PAC, SQS is marked out due to its in-depth competence,methodology, and custom tools in software-testing and quality management as wellas its high level of professionalism. Customers choose SQS as a partner fordemanding tasks, e.g. testing of sector-specific and business critical applications aswell as strategic issues and the re-conception of the overall organization of testing.Its technological knowledge and the evident industry and process knowledgeenable the company to cater for both trends in IT and the commercial challenges ofits customers. Finally, its innovative orientation and the development anddeployment of state-of-the-art software tools and methods, enable SQS tocontribute to driving forward the development of the market for testing services. © PAC 2011
  • 24. Growth Market – Software Testing 24A special feature of the solution approach of SQS is that the company has groupedits custom methodologies, which are offered to the customer as standardizedservices or as tailored solutions under the keyword of “SQS PractiQ”. The solutionspackages cater for e.g. performance testing or test automation as managedservices or a health check, i.e. the analysis and checking of testing processes andprocedures of companies with the aim of improving them. The standardization ofthe SQS solutions approach allows the customer to procure pre-defined, frequentlyrecurring services more cost effectively.SQS, as a specialized provider of software-testing and quality management,fulfills the requirement for independence.The clear focus on testing services and the associated independence andobjectivity in performing services are features that differentiate SQS from thecompetition. This has enabled SQS to position itself with a clear profile in the ITservices market.5.3. Service Pledges of SQSAlthough SQS performs standardized, performance-oriented testing services toensure efficiency and quality, elements of services can be put together forindividual customers and delivered on the basis of the preferred model case-by-case. Depending on the customerʼs situation, SQS will performs testing activitiestailored to the customerʼs needs, partial or complete testing projects, or all testingactivities under managed test services agreements.As this study shows, SQS has positioned itself appropriately in relation to themain trends in the growth market of software testing.The testing services providerʼs response to the sustained demand for managed testservices is continual strengthening of its resources and abilities in this area.Successful reference projects underline the attractiveness of the concept: as earlyas 2009 the St. Galler Kantonalbank (Switzerland) entered into a managed testservices agreement with SQS over several years under which SQS wasresponsible for testing the core bank system. The outcome to date has beenpositive: after just a short time into the contract, the most important objectivesreached in collaboration with SQS include automation of testing and increase inefficiency. © PAC 2011
  • 25. Growth Market – Software Testing 25Testing Automation at St. Galler KantonalbankThe St. Galler Kantonalbank is a bank for private and business clients that operatesglobally. The institute deploys the Avaloq core bank application to support itscentral business processes.Regular software updates and error correction mean that reliable and efficientsoftware tests are indispensable for the Kantonalbank. In order to achieve a highdegree of automation of the Avaloq test cases and establish optimum processes,the bank entered into a five-year contract for managed test services with SQS in2009.In the first year of the contract SQS implemented a large number of automated testcases that today are fully performed and evaluated within a few days. Thesignificant reduction of manual tests means that the potential for savings is high.The testing activities have been seamlessly integrated into the existing IT set-upsuch that implementation occurs without friction losses. The test cases areconducted at the customerʼs premises while the test cases implemented areprepared and maintained in the SQS testing center in Cairo.The current managed test services agreement means that the Kantonalbank St.Gallen will rely on SQSʼs support until at least 2014. The fixed-price model incombination with defined performance indicators guarantees that the bankʼsobjectives in terms of efficiency and quality will be achieved.References assist in evaluating the competences and experience of a serviceprovider. In PAC’s view satisfied customers are an important indication that acompany fulfills its service pledges.5.4. Blended Service DeliverySQS achieves cost and quality benefits in software testing for its customers bymeans of blended service delivery.The company deploys a mix of resources from the customerʼs local unit inconjunction with its global delivery units. While SQS manages all testing jobslocally, the services are performed in various countries via a “best-shore” approach.This saves costs as the tests are performed around the clock – and thus faster –across different time zones. Blended service delivery also enables SQS to meetdemand peaks if a customer requires many resources and specific competences atthe same time. © PAC 2011
  • 26. Growth Market – Software Testing 26Contacts from the local unit are available to SQS customers at all times. Thecustomers benefit from this, in particular in phases of service performance requiringintensive communication.The global delivery locations of SQS are distributed around the world and arelocated in Görlitz (Germany), Cairo (Egypt), Durban (South Africa), Belfast(Northern Ireland), and Pune (India). Today around a third of SQS employees aredeployed at these locations. Within the international services organization SQSscores points with well-educated, multilingual teams, low fluctuation at all locations,including near- and offshore locations, and with a high performance orientation aswell as intensive communication between the teams within the delivery organizationas a whole.SQS is thus in a position to fulfill further needs of its customers: maintenance ofhigh quality standards, the acceleration of test performance, and access tosupplementary resources.The blended service delivery approach is widespread in todayʼs IT servicesenvironment. The large systems integrators in particular have near- and offshoreunits in numbers that considerably exceed those of SQS in terms of resourcestrength and number of locations. Conversely, the global delivery unit of SQS iscomparable to that of the global IT generalists in terms of the number of dedicatedtesting specialists.However, not every company wants the integration of near- and offshore resourcesfor the delivery of testing services. This illustrates the issue of the ideal resourcemix that was explored in section 3.4. If required SQS realizes projects or projectphases on a wholly local basis.5.5. Transparent Attainment of Objectives and Performance-related BillingSQS is particularly concerned with transparency in respect of delivering servicesand attaining objectives for its customers.To ensure that the benefits of collaboration can be verified transparently,service delivery and objectives are set down with measurable indicators andtime axes. © PAC 2011
  • 27. Growth Market – Software Testing 27Active budget control and measurement of success criteria enables the customer toestablish precisely not only the efficiency of the testing services delivered, but alsotheir quality and effectiveness. This can be measured e.g. based on theperformance and failure-safety of the tested application.What is significant for SQS is not so much the control of the individual testspecialists: what is much more important is the management of the overall testingteam and the transparency of the testing activities in terms of quality and efficiency.Active and consistent measurements ensure early intervention and remedy in theevent that the objectives cannot be fulfilled at any point.The approach in the delivery of the testing services and the tools used to do so areselected by SQS teams in consultation with the customer and in accordance with itsrequirements. In this way a verifiable result can be achieved in the conflictingpriorities between different objectives such as increasing quality and efficiency.SQS bills its services on the basis of various pricing models.The desire for fair, results-oriented billing is clearly increasing and is met bySQS. © PAC 2011
  • 28. Growth Market – Software Testing 286. SUMMARYThe survey, conducted with more than 300 decision-makers from large companiesin Europe and the USA, showed that most companies today use external supportfor their testing activities and benefit from doing so.Optimization of Testing ActivitiesThe organization of testing activities and their optimization is closely associatedwith the increasing awareness of the added value of flawless, fail-safe corporateapplications. The majority of the companies surveyed are currently involved inoptimizing their testing activities. Currently around half of companies surveyed arein the optimization phase, while 36 per cent are planning to start in the comingtwelve to 24 months. Optimization enables the managers surveyed to aim atincreasing the quality and transparency within testing processes. Companies thathave made no provision for adapting their testing processes mostly justified this bysaying that their testing activities were already optimized.Trends in the Market for Testing ServicesSoftware-testing and quality assurance is one of the most important IT topics forcompanies, as 91 per cent of the managers in the survey conducted for the studyconfirmed. At the same time, there is currently a lot of interest in collaboration withprofessional service providers for software-testing and quality management: twothirds of companies surveyed already integrate external service providers into theirtesting activities, in the majority of cases regularly or on the basis of long-termmanaged test services agreements.Companies associate different opportunities with the testing services model. Morethan 80 per cent of the companies surveyed see the greatest benefits in improvedaccess to qualified test specialists, shorter testing times, the reduction of testingcosts, relieving the burden on IT teams to free them up for innovative projects, andin greater flexibility in the testing process. © PAC 2011
  • 29. Growth Market – Software Testing 29Development in Demand for a Blended Service DeliveryToday global service delivery is hugely significant. The vast majority of companiesthat have already outsourced part or all of their testing activities to an externalservice provider use resources distributed across the globe for software tests, i.e.they work with a mix of local and near- and offshore resources. The study showsthat the importance of external (near-/ offshore) testing centers for delivering testingservices continues to increase. Three quarters of interviewees confirm that they areconsidering using testing centers in future.The companies surveyed use testing centers to pursue a variety of objectives. Forthe majority of respondents the most important reasons are reducing costs andincreasing quality of service provision.What is noticeable is that none of the IT decisions makers surveyed was in favor ofoutsourcing all testing activities to a testing center.Successful Collaboration with Testing Service ProvidersCustomers demand high competence in service delivery from their testing serviceprovider. 97 per cent of interviewees stated the technical competence of and instantfeedback from the testing team as an important or very important criterion.The majority of companies surveyed – 60 per cent – further expect high to very highavailability and flexibility from a testing team. Maximum availability meanspermanent readiness “around the clock”. The majority of respondents also classifymultilingual capability as important or very important in testing projects. Theprincipal requirement is for contacts who can speak the language of the respectivecountry and English.Measuring success on the basis of KPIs for testing services is important for themajority of interviewees: around two thirds of companies regularly measure whetherthe testing team is achieving the agreed objectives. What is crucial is theadherence to deadlines and the number of test cases performed as compared tothe expenditure incurred. Only a small number of companies surveyed – 26 percent – measure a set of dedicated KPIs.A clear majority of respondents – 89 per cent – consider the flexible billing of testingservices based on results actually achieved to be important.Success-critical Factors in the Selection of a Testing-Service ProviderIn summary it becomes clear that the demand for quality-oriented services isincreasing in the growth software testing-market, while performance is subjected tocloser scrutiny than ever before. Companies demand a lot of their software-testingpartners. The main issue in selecting a testing service provider is its focus on © PAC 2011
  • 30. Growth Market – Software Testing 30testing and quality orientation, which just under two thirds of companies surveyedfor the study consider to be particularly significant. The majority of managerssurveyed have high requirements in terms of industry and business-processknowledge and demand technological and product expertise.Testing Specialist SQSSQS positions itself clearly in the market as a specialized provider of software-testing and quality management within a particular focus on long-term, success-oriented customer relationships is correspondingly well-placed in respect of thetrends in the software-testing market. These include above all the increasingdemand for long-term contracts for managed test services and the use of abalanced blended service delivery. The company meets the high demands of thetarget group by pursuing a quality- and performance-oriented service approachcombined with outcome-oriented remuneration and has the necessary competenceand experience. The company provides evidence of this via credible references andits active measurement of the service delivery and attainment of objectives on thebasis of KPIs. These are criteria that are essential in the selection of a testingservice provider, as the company survey has shown.Further factors come into the mix for companies that seek a suitable partner forcollaboration in software testing and quality management, depending on thespecific circumstances. The requirements are manifold. This study cannot replace afull analysis of either the specific requirements or the services of the testing serviceproviders. However, PAC as the author of the study and SQS as its commissioner,hope that they have provided the reader with useful background information on thegrowing testing market and that it provides orientation in planning professionalmanaged test services. © PAC 2011
  • 31. Growth Market – Software Testing 31About SQS Software Quality Systems AGSQS is the largest independent provider of services for software qualitymanagement, quality assurance and testing, with its focus in Europe. Founded inCologne in 1982, SQS employs 2,000 employees. Alongside a strong presence inGermany and the UK, SQS has subsidiaries in Egypt, Finland, India, Ireland, theNetherlands, Norway, Austria, Sweden, Switzerland, South Africa, and the USA.SQS also has a minority stake in a Portuguese company and a joint venture with acompany in Spain. In 2010 SQS generates sales of €162.9 million.SQS was the first German company to undertake a primary listing on AIM(Alternative Investment Market) in London. Further, SQS has a secondary listing onthe Open Market of the Deutsche Börse in Frankfurt/Main.With over 5,000 concluded projects, SQS has a strong customer base, includinghalf of the DAX 30 companies, almost a third of STOXX 50 companies and20 FTSE 100 companies. These include Allianz, Beazley, BP, Centrica, Daimler,Deutsche Post, Generali, JP Morgan, Meteor, Reuters, and Volkswagen and othercompanies across all sectors.For further information: www.sqs-group.comAbout Pierre Audoin Consultants GmbHPAC provides focused and objective answers to the growth demands of actors inthe information and communication technology market (ITC) – from strategythrough to implementation.Pierre Audoin Consultants was set up in 1976 and is an independent market-analysis and consultancy company for the software and ITC services market. Wesupport ITC service providers with quantitative and qualitative market analyses andstrategic and operative consultation. We advise CIOs and financial investors on theevaluation of ITC service providers and solutions and provide support for theirinvestment decisions. Public and voluntary organizations use our analyses andrecommendations as a basis of their ITC policies.For further information: www.pac-online.com and www.pac-online.de © PAC 2011
  • 32. ContactEditor:Pierre Audoin Consultants (PAC) GmbHHolzstraße 26D-80469 MünchenGermanyTelephone: +49 (0) 89 23 23 68-0Fax: +49 (0) 89 719 62 65E-mail: info-germany@pac-online.comPublisher:SQS Software Quality Systems AGStollwerckstraße 1151149 KölnGermanyTelephone: +49 (0) 2203 91 54-0Fax: +49 (0) 2203 91 54-15E-mail: sqsmarketing@sqs.de © PAC 2011

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