More Related Content Similar to Strategic Consequences of a Development Balanced Resource Pool (20) Strategic Consequences of a Development Balanced Resource Pool2. Session Purpose
Attendees will learn the importance for ISVs (Independent
Software Vendors) to balance their development
resources with productivity, quality and cost as their core
approach.
PMI Portland Annual Conference ©2017 Greg Spehar 2
3. Objectives
Learn the Organizational Challenges in the Future
Learn the Organizations Options Today
Learn the importance to focus on the three measures:
Productivity through the use of Agile Processes
Quality through different Quality/Validation Approaches
Cost containment through On-Shore and Off-Shore FTE
Understand the New Leadership Opportunities for PM/ACP
Understand the use of new productivity tools and their impact as a
PM/ACP
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4. Challenges
#1: Chasing the Cloud
#2: The Ease of it’s Use
#3: If then do Quality
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5. Challenge #1:
Cloud Computing
“[The] Cloud is forcing independent software vendors
(ISVs) into several arduous business challenges,
including how to:
deliver software as a service (SaaS)
[how to] deal with the issues of licensing
[how to] monetize SaaS services”
The Challenges ISVs Need to Address to Make the Transition to Cloud
By Erin Harrison, Executive Editor, Cloud Computing
May 20th, 2013
Software Monetization: Business Transformation Strategies
http://software-monetization.tmcnet.com/articles/338719-challenges-isvs-need-address-make-transition-cloud.htm
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6. Challenge #2:
Ease of Use
In the old days, independent software vendors (ISVs) built their businesses during a
period when the rate of change was far slower than we experience today.
ISVs faced far fewer competitors and had the luxury of responding to customer
demands at their own pace…
And the burden of making the software work ultimately fell in the laps of the customer,
not the ISV.
The advent of Software-as-a-Service (SaaS) fundamentally changed this equation...
This placed greater pressure on ISVs to continuously enhance their software
functionality and ensure the success of their SaaS solutions.
Sand Hill: Business Strategy
Jeffrey M. Kaplan, Managing Director
THINKstrategies
May 2nd, 2016
http://sandhill.com/article/the-challenges-of-becoming-a-software-company/
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7. Challenge #3:
Quality of Service
Quality of service delivery, regardless of industry, service delivery is a key facet of success.
For ISVs or SaaS providers this becomes a bit of challenge because as their organizations
grow, their approach to service delivery needs to evolve...
For the most part this can be accomplished by implementing more mature processes and
policies.
In this space specifically, performance, availability and support are three pillars that a
provider’s reputation rests on.
This means that disruption to any one of those pillars will have a knock-on effect on business,
with the net result being lost customers and/or revenue.
As a result, ensuring customer satisfaction through quality of service is essential, not
only to maintain trust and foster end customer relationships, but also to protect the bottom
line.
Information Age
May 16,1016
The road from ISV to SaaS: are vendors prepared for the challenges?
Kevin Lonergan
http://www.information-age.com/7-10-uk-employees-use-unauthorised-cloud-services-work-123461432/
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22. PM/ACP New Leadership
Project Management (PM) communications expertise is necessary
when you have multiple Agile teams spread across solutions that are
localized and international (near-shore and off-shore).
Additional PM efforts need a focus on a measureable objectives:
Existing Example: Building Micro processing Chips had Moore’s Law
Processing power doubled every 2 years
New Approach: What law could show ISV software productivity?
Components of this law might include:
Velocity, Cost and Quality
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23. New Productivity Law
Proposed new LAW needs productivity measure along with the
cost of that productivity. (V = Velocity & C = Costs)
f(Vn)
f(Cn)
f(?n)
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24. New Productivity Law
Proposed new Law needs to also take into account for quality,
since the quality can be sacrificed by lowering cost and artificially
increasing velocity.
f(Qn)
f(Vn)
f(Cn)
f(?n)
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(V = Velocity & C = Costs & Q = Quality)
25. New Productivity Law
As well as this measure should take into account the amount of
maintenance the software requires vs new software generated.
f(Qn)
f(Vn)
f(Cn)
f(?n)
New Features (~80%)
Maintenance
(~20%)
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(V = Velocity & C = Costs & Q = Quality)
26. Balanced Resource Pool
Where then the new law would permit the Executive Team to set
the direction to make strategic “Projects” with clear start and end
points, promoting a given outcome with an ROI based on a
Balanced Resource Pool.
f(Qn)
f(Vn)
f(Cn)
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(V = Velocity & C = Costs & Q = Quality)
27. Spar’s Law
Reducing costs while maintaining quality at a rate of 5% to 10%
per year would see a company double productivity every 3 to 7
years.
f(Qn)
f(Vn)
f(Cn)
f(Sparn)
New Processes/Features (~80%)
Maintenance
(~20%)
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(V = Velocity & C = Costs & Q = Quality)
28. Spar’s Law Impact
Projects that increase Velocity
New Tools
New Training
New Architectures
Off-load Maintenance
Projects that reduce Costs
Movement to Off-Shore / Near-Shore Solutions
M&A (Mergers and Acquisition)
Movement to Open Source (No License Costs)
Movement to Remote work / Reduced Office Space
Projects that Increase Quality or Maintains Quality
Increased Automation of Testing Efforts
Movement of QA Efforts Off-Shore / Near-Shore
Lower Cost Tools
New Architectures
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29. Conclusion
1) Productivity Achievement
Through an Agile Approach
With projects that increase agile productivity
2) Quality Achievement
Through a Quality and Validation Approach
With projects that keep quality constant or improve quality over time
3) Cost Achievement
Through a cost mix of On-Shore and Off-Shore
Through reducing costs on tools, their maintenance & space
Through reducing costs on systems (Think AWS, Azure, etc.)
4) PM/ACP Leadership
Pulling all of these together under the Role of PM/ACP:
To help lead and guide these factors for an ISV’s success
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30. Questions
Open Questions - Lets stay focused on the 4 areas:
PM’s and ACP’s Impact on the Organization
PM/ACP Relationship to Productivity
PM/ACP Relationship to Quality
PM/ACP Relationship to Cost
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31. Contact Information
Greg Spehar
Linked-In: https://www.linkedin.com/in/spehar/
Personal Email: spehargreg@yahoo.com
503-332-3663
Work Email: gspehar@corsource.com
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33. Effectiveness Measure
It is not only important to measure to some level the productivity of the team
but also team’s effectiveness is critical as well.
Within the world of ISVs and the advent of the cloud we best can measure
effectiveness through company revenue, primarily the growth or maintenance
of a given revenue.
This is one suggested measure that could be used:
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f(Vn)
f(Rn)
(V = Velocity & R = Revenue)
34. Case Study: Dive Software
Dive Software makes leading collaborative software for the Diving Market.
They have revenues of $200 Million per year and employ about 700 people of
which about 400 are engineers making the software products.
If they had a profit of $35 Million, they have costs of around $165 Million.
They are running at 75% productivity against current engineering resources
levels, so total velocity will be for the year is 150,000 story points (400
engineers * yearly capacity of 500 SP * .75 Efficiency)
(Vn) = 150,000 SP / 400 Resources = 375 SP/R
(Cn) = $165 Million / 400 Resources = 0.41M $ / R
Spar Measure = 909 SP/$ (Costs)
Quality – Assume No Change
They are purchased by a company
Cost reduction can result in 30% savings
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% Spar Velocity/R Cost/R
- 909 SP/$M 375 SP/R $0.41 M /R
30% 1285 SP/$M 375 SP/R $0.29 M /R
15% 919 SP/$M 319 SP/R $0.35 M /R
35. Defining f(Qn)
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The Quantitative term refers to the notion that we should discount
the productivity term by the negative impact a reduced quality
product has on the company’s ability to sell product.
A lowering quality product with increasing productivity only leads to
customers leaving to other products that might have less features
but provide a better experience.
f(QT2 – QT1)f(Vn)
f(Cn)
f(Qn)
f(Quality Range)
(V = Velocity & C = Costs & Q = Quality)
36. Defining f(Vn)
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This function will be the most controversial of all functions to Spar’s Law. How do you
measure and compare all the different Velocities across an organization? Or is the
question how do you measure productivity through time?
Truth: It is not appropriate to compare one team’s velocity to another team’s velocity.
Then make judgments about their productivity. (One is more productive than another at
that moment. ~ Not good.)
So the question is the measure of productivity across time there are two assumptions
that have to hold to properly measure Velocity through time for this law to work:
All teams should use the same measure for Velocity: e.g. 1 Story Point is ½ day
The nature of the function is measured through time and the can be additive
f(VAT1 +VAT2+VAT3)
f(Vn)
f(RAT1 +RAT2+RAT3)
(V = Velocity & R = Resource Count & AT = Agile Team)
37. Defining f(Cn)
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Costs is always an area of conflict where one has to
determine what costs are most relevant. Should we just
include labor costs, what about support costs or other
organizational costs?
All these items should be addressed in a varying number of
metrics that can be monitored.
By Agile Team
f(CAT)
f(RAT)
All Agile Teams
f(CAT + CAT + CAT)
f(RAT + RAT + RAT)
Entire Organization
f(CATn + CS + CF + CM)
f(RATn + RS + RF+ RM)
(C = Cost & R = Resource Count & AT = Agile Team)
(S = Sales & F = Finance & M = Marketing)
38. Laws vs. Philosophies
Within Management Philosophy one would advocate that a given
approach would best be used to motivate a team and help them be
a productive team.
Within a Natural Law, there can only be philosophies that can
optimize that law. Or new laws that invalidate the old laws. There
are no better laws or best laws.
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39. Value Proposition
This new generation of software-enabled products and services must be packaged and
priced to reflect a new layer of value.
The new value equation is based on the product/service connectivity, data analytics and
intelligence.
The new value equation also must take into account the need to change the software
packaging and pricing quickly to respond to an increasingly dynamic market.
Given the new software realities, businesses seeking to recast themselves as software
providers must be prepared to do more than just create an attractive environment for
software developers.
They must be able to convert their internal software skills into external software
monetization machines.
Sand Hill: Business Strategy
Jeffrey M. Kaplan, Managing Director
THINKstrategies
May 2nd, 2016
http://sandhill.com/article/the-challenges-of-becoming-a-software-company/
PMI Portland Annual Conference ©2017 Greg Spehar 39
ISVs must abide by Spar’s law to become monetization machines.
40. Calculations
Calculations for 5%
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0
200
400
600
800
1000
1200
0 10 20 30 40 50 60
Producvity
Years
Doubled Produc vity @ 5%
Calculations for 10%
0
2000
4000
6000
8000
10000
12000
0 10 20 30 40 50 60
Producvity
Years
Doubled Produc vity
41. Productivity Defined
Dictionary.com - Noun
1. The quality, state, or fact of being able to generate, create,
enhance, or bring forth goods and services:
The productivity of the group's effort surprised everyone.
2. Economics. The rate at which goods and services having
exchange value are brought forth or produced:
Productivity increased dramatically last year.
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42. Growth in Code Globally
Decade Code Base Globally Resources Globally
1950s 100,000+ 100s
1960s 1,000,000+ 1,000s
1970s 10,000,000+ 10,000s
1980s 100,000,000+ 100,000s
1990s 1+ Billions 1,000,000s
2000s 10+ Billions 10,000,00s ?
2010s 100+ Billions 100,000,000s ?
2020s 1+ Trillion ????? ?????
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Google has 2 Billion Lines of Code – and it’s all in one place.
Wired
September 16 2015
Cade Metz
https://www.wired.com/2015/09/google-2-billion-lines-codeand-one-place/
44. New PM/ACP Strategic Tools
Logical Framework Approach
Terry Schmidt
http://www.managementpro.com
Mapping Tools – Xmind, etc.
User Story Mapping – Book: Jeff Patton
Personal / Company Kanban
Kanban Approach
Backlog / To Do
In Process
Done
Tools
White Board
Software
Trello
JIRA
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45. New PM/ACP Strategic
Process
Overall Process To Execute
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Perform
Logical
Framework
Complete
Mind
Mapping
Define
User Stories
Setup
Kanbans
47. Agile / Scum
Agile and Scrum are terms used in project management. The Agile
methodology employs incremental and iterative work beats that
are also called sprints. Scrum, on the other hand is the type of
agile approach that is used in software development.
https://stackoverflow.com/questions/11469358/what-is-the-
difference-between-scrum-and-agile-development
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