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Using Life Cycle Management To Demonstrate Value And Drive Performance

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Invited Presentation : I/T Leadership 2001, July, 2001, Toronto. …

Invited Presentation : I/T Leadership 2001, July, 2001, Toronto.

Ensuring that projects meet expectations on schedule and budget is a complex challenge for any I/T executive or manager.

This paper represents a Life Cycle Management approach to ensuring value from I/T and software development projects.


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  • 1. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance Using Life Cycle Management to Demonstrate Value & Drive Performance July 15, 2004 VAIT Stephen W.A. MacLean, P. Eng. 1 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 2. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance Overview Ensuring that projects meet expectations on schedule and budget is a complex challenge for any I/T executive or manager. This paper represents the author’s experience in commercial software development and I/T environments in aerospace, automotive, engineering and manufacturing industries. The methodology and approaches described can be applied both to software development and selection/implementation projects in any industry. 2 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 3. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance VALUE : Etymology: Middle English, from Middle French, from (assumed) Vulgar Latin valuta, from feminine of valutus, past participle of Latin valEre to be worth, be strong Date: 14th century 1. a fair return or equivalent in goods, services, or money for something exchanged 2. the monetary worth of something : marketable price 3. relative worth, utility, or importance something (as a principle or quality) intrinsically valuable or desirable 4. 3 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 4. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance I/T Value 1. Keeping the ‘lights' on 2. Productivity/process Improvements 3. Business/Asset Transformation 4 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 5. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance I/T Value Drivers Integration Flexibility Ease of access to data Degree of collaboration Data is entered once and reused. Make it easy for customers to do business with you Forge and enforce an alignment between business Strategy and the I/T function. 5 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 6. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance I/T Value Today, the value provided by effective I/T can go well beyond cost reduction and increasing productivity. However, achieving the ‘basics’, which are so often not achieved, must be a minimum in the much tougher business climate we live in today. Today, I/T has the potential to help transform the way businesses operate – to trigger massive changes in culture, process and the way people interact with one another. These changes can be akin to opening Pandora’s box if not managed properly. Even then, many of the significant benefits are intangible and very difficult to measure and comprehend. 6 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 7. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance An example of Bad Value and existing I/T approaches applied to building cars The CIO’s new ‘Ride’ !! Your, ah, new car is ready but it’s only got 3 wheels, 2.5 cylinders and 3 seats. BUT, the GOOD news is that we managed to include the latest gee-whiz bang inertial navigation system at NOOO extra cost Straight from Kars by Komponents, Inc. - your VIRTUAL car company !!! 7 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 8. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance Why Building Software Is Not Like Building Cars • A car begins with a design, based upon market needs/assessments and customer requirements. • Developing a car follows well defined principles and processes, with predicted levels of tolerance and safety factors • The blueprint is followed precisely. Changes are costly and therefore anathema. • The tools used to build the car also follow well-defined principles and generally don’t change during production. • The materials are familiar and generally behave predictably. Because of all that, some people are pretty good at building cars. 8 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 9. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance Software Project Failure Statistics There is substantial industry evidence1 that two of the leading causes for project failure are poor requirements management and poor project estimation. Consider that : • The average project exceeds its planned budget by 90% and its schedule by 120%. • 33% of all projects are over budget and late. • 52.7% of projects will cost 189% of their original estimates. • The average time overrun is 222% of the original estimate. In large companies, only 9% of projects come in on time, on budget. 1 Standish Group survey of 8,000 software projects 9 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 10. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance Large Systems Project Failures A major running shoe manufacturer had a serious problem with it’s inventory software project, which prompted their CEO to state, quot;This is what we get for our $400 million?quot; A Canadian grocery chain that suddenly and publicly canned it’s ERP project, after spending $50 million. A 100-year-old management consulting firm that spent tens of millions on a failed ERP deployment, then tried and failed again after sinking another $8 million into the black hole. A litany of failures with depressingly familiar advice : one needed to test more; the other needed a project sponsor; while another should have killed the project This simply restates what everyone already knows. The problem isn't with the advice; the problem is the development/ implementation methodology itself. 10 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 11. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance Primary Reasons for poor Value from Software/Systems Projects • Poor Requirements Definition : • Lack of Value to the customer due to reduced functionality caused by missed requirements • Poor Project Estimation : • Results in insufficient time/money to deliver a quality result, even if requirements are well defined – requirements will be left out and/or quality will suffer. • Poor or Missing Requirements Traceability : • Lack of Value to the customer due to not ensuring that the design and resulting code effectively embody and deliver on the agreed upon requirements. • Lack of an Agile Life Cycle methodology : • Lack of Value as evidenced by poor quality and missing/delayed requirements due to not quoting and delivering the project using an agile life cycle methodology. 11 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 12. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance I/T Value Measurement However, the problem is actually deeper than this! According to Paul Strassman1 , there is no relationship between what a company spends on I/T and it’s profitability. Furthermore, every seven years, we have torn up what has gone before and started again. There have been, according to him, 8 cycles of build and scrap since 1946 and he has the data to prove it. Others, such as David Norton, one of the two original developers of the Balanced Scorecard methodology, have agreed that there isn’t a direct relationship between I/T investment and the bottom line. So, in the long term, across multiple projects and technology shifts, how does I/T achieve value for the business? 1 Financial Times : June 27, 2001 12 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 13. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance Life Cycle Management Principles for High Value Development/Delivery • Prioritise requirements and weight them if possible. • Track requirements traceability and use metrics to measure the quality of the system as it moves from a working prototype to a full product. • Incorporate formal configuration control & change management practices. • Requirements Release. Only the functionality that the customer has selected for the next iteration is considered and built. The customer doesn't pay for functionality that he/she might not select, and the developers don't have to code, debug, and maintain irrelevant code. • Practice incremental delivery, based upon a formal Release management process - don’t compromise quality for the sake of banging functionality into a release at the last minute. 13 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 14. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance Principles for High Value Application Development/Delivery • Take a holistic, integrated view of the organisation : • Deliver integrated solutions that meet common needs first • Resist the urge to deliver so-called ‘best-of-breed’ (aka silo) applications The COST of No Integration “ Every big company collects, generates and stores vast quantities of data. In most companies, though, the data are not kept in a single repository. … Each of these so-called legacy systems may provide invaluable support for a particular business activity. But in combination, they represent one of the heaviest drags on business productivity and performance now in existence.” HARVARD BUSINESS REVIEW July - August, 1998 14 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 15. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance Project/Team Attributes for High Value Application Development/Delivery Agile • Fast and efficient. • Small and nimble. • Less money, fewer features, shorter projects. • only 7 percent of the features of any given application are actually needed.1 • If it doesn't work, kill it. • Commit business people to the development team. How to Be Agile • Slash the budget. • Set a $ ceiling on all software projects- No exceptions. • Keep the development teams small. • Always be prepared to roll out the last stable build – incremental delivery. 1 Standish Group survey of 8,000 software projects 15 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 16. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance Estimating Spreadsheet Duration 100.00% 100.00 Project Management 10.50% 10.50 Ongoing project review 6.30 Change Management 3.15 Management Review 1.05 Requirements Planning 12.00% 12.00 Review existing system 1.15 Model process 1.44 Identify user requirements 2.53 Prototyping (iterative) 3.28 Prepare Software Requirements Specification 3.11 Software Requirements Review(s) 0.50 Requirements Frozen 0.00 Design : Conceptual & Detailed 37.00% 37.00 Estimating Prepare Design 25.55 Document design 7.30 Spreadsheet Prepare Software Test Plan 3.65 Design Review(s): PDR & CDR 0.50 - uses life cycle Design Frozen 0.00 Programming 13.50% 13.50 metrics. Develop Programmes/Assemble Components 7.80 Test Programmes (complete test plan) 2.60 Document code & prepare for code review(s) 2.60 Code review(s) 0.50 Programming Complete 0.00 Quote and Development Functionality testing 9.00% 9.00 Prepare Software Test Plan 2.13 Deliver the work Functionality Test 6.38 Test review 0.50 Functionality Testing Complete 0.00 based upon a Development Integration Test 13.00% 13.00 Enhance test plan 3.13 Formal Life Integration Test 9.38 Test review 0.50 Cycle approach. Coverage Testing Complete 0.00 User Documentation 5.00% 5.00 Customer UAT 7.00 Conduct Software Acceptance Review 0.50 16 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 17. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance The Life Cycle Model drives the structure & phases of the project plan. NOT the other way around! 17 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 18. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance Case Study : Agile Development and Delivery ERP - MS Project Enterprise Integration 18 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 19. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance ERP - MS Project Rev 1.0.0, 2004.6.30 Integration Architecture MSP Client AIM Client or Web or Web MSP DB Integration (.Net) ERP DB Application DTS API ODBC ODBC ODBC DTS Staging Staging DB DB Case Study : Rapid Development of ERP – MS Enterprise (ERP side) (MSP side) Project Manager Integration 19 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 20. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance Case Study : Rapid Development of ERP – MS Enterprise Project Manager Integration Project Master data in the ERP Project in Project Web Access 20 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 21. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance Case Study : Rapid Development of ERP – MS Enterprise Project Manager Integration 21 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 22. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance Case Study : Rapid Development of ERP – MS Enterprise Project Manager Integration 22 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 23. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance Case Study : Rapid Development of ERP – MS Enterprise Project Manager Integration Principle : Integration 23 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 24. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance Case Study : Rapid Development of ERP – MS Enterprise Project Manager Integration Principle : Rapid, Collaborative Development 24 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 25. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance Case Study : Rapid Development of ERP – MS Enterprise Project Manager Integration Principle : Track requirements traceability 25 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 26. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance Case Study : Rapid Development of ERP – MS Enterprise Project Manager Integration Principle : Prioritise requirements, Change/Config. Management 26 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 27. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance Agile • Fast and efficient : Time from inception to Release 1: 3 months • If it doesn't work, kill it : Tried triggers & replication to move data between DB’s. DTS faster, simpler and more reliable + works across servers. • Commit business people to the development team : Business people provided the requirements, vetted designs and tested. How to Be Agile • Slash the budget : < $ 50,000 • Keep the development teams small : On average : 3 people • Always be prepared to roll out the last stable build – incremental delivery : Had some unforeseen technical problems with one feature just prior to Code freeze. Rolled back to the last version and released it. 27 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 28. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance I/T Value Measurement While I/T spending is critically important to an organisation, it is, however, in largely a catalytic role. I/T Spending promotes factors that clearly influence and determine profitability, but which are generally very hard to measure on their own. Factors such as : • Competitive advantage • Strategic positioning • Organisational knowledge and competencies/learning • Collaboration and knowledge sharing • Management style and competencies • Quality etc. …. In other words, intangible assets … 28 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 29. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance Management skills Organisational capabilities Intellectual capital/knowledge External relationship capital This can be further broken down into : Brand equity/Reputation Alliances and networks Human capital Technology and processes Innovation 29 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 30. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance Normalised Incremental Change Cost by Stage $ 1,000 Incremental Change Cost Post Roll Out At the end of the Day … Enabling the business Testing to do things it couldn’t $ 100 do before and/or to do them earlier in the $ 10 Coding product/service life Design cycle than was previously $1 Life Cycle Stage possible. 30 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 31. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance Resulting Improvements • Iterative, rapid prototyping, when combined with demonstration based evaluation, results in significantly higher value/quality solutions being delivered ‘out of the box’. • Focus on agile delivery and requirements traceability results in much higher value solutions, with much higher % requirements delivery. • More efficient resource management and fewer delivery problems by using a Life Cycle model to quote, manage and deliver the work. 31 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’
  • 32. Using Life Cycle Management VAIT to Demonstrate Value & Drive Performance THANK YOU !!! QUESTIONS? 32 Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only author’

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