Balanced Scorecard for CMMI Implementations - Eduardo Espinheira e Paula Gomes

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Balanced Scorecard for CMMI Implementations - Eduardo Espinheira e Paula Gomes

  1. 1. Portugal Balanced Scorecard (BSC) for CMMI An Implementation Roadmap Eduardo Espinheira Process Improvement Manager Paula Gomes Project Manager / Consultant 2011-10-03
  2. 2. Balanced Scorecard for CMMIAn Implementation RoadmapAgenda• Introduction• CMMI Product Suite and MLs• Balanced Scorecard Concept• Implementation Strategy• Results until this moment• Conclusion 2
  3. 3. Balanced Scorecard for CMMIAn Implementation RoadmapIntroductionThe aims of this presentation is to present:• The advantages of a BSC Implementation within a CMMI Implementation.• An implementation strategy. 3
  4. 4. Balanced Scorecard for CMMIAn Implementation RoadmapCMMI Product Suite and MLs 4
  5. 5. Balanced Scorecard for CMMIAn Implementation RoadmapCMMI Product Suite and MLs 5
  6. 6. Balanced Scorecard for CMMIAn Implementation RoadmapCMMI Product Suite and MLs Level Process Area Organizational Innovation and Deployment OID 5 Optimizing Causal Analysis and Resolution CAR Organizational Process Performance OPP 4 Quantitatively Managed Quantitative Project Management QPM Requirements Development RD Technical Solution TS Product Integration PI Verification VER Validation VAL 3 Defined Organizational Process Focus OPF Organizational Process Definition OPD Organizational Training OT Integrated Project Management for IPPD IPM Risk Management RSKM Decision Analysis and Resolution DAR Requirement Management REQM Project Planning PP Project Monitoring and Control PMC 2 Managed Supplier Agreement and Management SAM Measurement and Analysis MA Process and Product Quality Assurance PPQA Configuration Management CM 6
  7. 7. Balanced Scorecard for CMMIAn Implementation RoadmapBalanced Scorecard Concept • Economic and Financial Measures are not enought to run your business!! • You also need to manage: It conditions • The Target Markets; the economic • Customer Relationship; and financial • Business Processes; results. • Human Resources Performance; • Innovation and Technology evolution. 7
  8. 8. Balanced Scorecard for CMMIAn Implementation RoadmapBalanced Scorecard Concept• BSC gives us a perception of Executive Lead to change the added value; mobilization.• BSC allows you to measure Translate Treat Strategy strategy in intangible actives; executable as a Continuous terms (Themes) Balanced Process Scorecard• Focus on strategy; Vision and Strategy• Alignment between: • Goals; Improve organizational Treat Strategy • Indicators; alignment and create as an everyday task. synergies. • Targets; • Action Plans. 8
  9. 9. Balanced Scorecard for CMMIAn Implementation RoadmapBalanced Scorecard ConceptThe balanced scorecard (BSC) design process is built upon a set ofpremises:• Strategy is a hypothesis it makes certain assumptions about outcomes that can be achieved• Strategy can be described as a set of cause-and-effect relationships the causal chain can be made explicit and testable• Strategy requires the definition of activities that are the drivers (or lead indicators) of desired outcomes the organization can influence the drivers to achieve outcomes of interest 9
  10. 10. Balanced Scorecard for CMMIAn Implementation RoadmapBalanced Scorecard ConceptThe BSC is, among many things, a strategic performancemanagement tool.It is a semi-standard structured report, supported by provendesign methods and automation tools, that can be used bymanagers to keep track of the execution of activities by thestaff within their control and to monitor the consequencesarising from these actions.It is divided in a minimum of 4 perspectives. 10
  11. 11. Balanced Scorecard for CMMIAn Implementation RoadmapBalanced Scorecard Concept Goals Indicators Targets Initiatives Internal Processes To satisfy our stakeholders and customers, what business processes must we excel at? Customer perspective Financial perspective Goals Vision Goals Indicators Targets To achieve our vision, how and To succeed financially, how Indicators should we appear to our should we appear to our Targets Initiatives costumers? Strategy stakeholders? Initiatives Learning and Growth To achieve our vision, how will we sustain our ability to change and improve? Goals Indicators Targets Initiatives 11
  12. 12. Balanced Scorecard for CMMIAn Implementation RoadmapBarriers of BSC Implementation• Vision: only 5% understands the company’s strategy;• People: only 25% of the companies gives incentive due to the strategys achievement;• Resources: only 40% of the companies add financial resources to improve strategy;• Management: 85% of the managers spend less than an hour per month discussing the strategy. 12
  13. 13. Balanced Scorecard for CMMIAn Implementation RoadmapImplementation Strategy• Services oriented implementation strategy;• Everyone has a client, so along all levels, even individually, we have: • Mission; • Vision; • Strategy; • Goals; • Metrics.• Top – Bottom Definition Process;• Bottom - Up Implementation Process. 13
  14. 14. Balanced Scorecard for CMMIAn Implementation RoadmapImplementation Strategy BSC Definition Process BSC Implementation Process 14
  15. 15. Balanced Scorecard for CMMIAn Implementation RoadmapBSC Definition Process1. Define Mission, Values, Vision and Strategy2. Define Strategic themes (a way of organizing your strategy)3. Create strategic maps for each theme4. Relate Strategic Themes (Goals and Indicators)5. Identify the interest groups and relate them with the different perspectives/themes. 15
  16. 16. Balanced Scorecard for CMMIAn Implementation RoadmapBSC Definition Process1. Define Mission, Values, Vision and Strategy Marketing Sales Team 1 Development Team 2 HR (…) Operational Management Company Financial Legal Custumer Services Business Dev. Company Area Department Mission Mission Mission Values Values Values Vision Vision Vision Strategy Strategy Strategy 16
  17. 17. Balanced Scorecard for CMMIAn Implementation RoadmapBSC Definition Process2. Define Strategic Themes (ST)A way to organize your strategy;Strategic group with similar characteristics;Examples: • Department/Team: • Project / Version. 17
  18. 18. Balanced Scorecard for CMMIAn Implementation RoadmapBSC Definition Process3. Create Strategic Maps (ST)Strategic MapDescribes companys strategy, throughthe relation between objectives,distributed by the four dimensions. Strategic Indicator Target InitiativeTheme ObjectiveFinancial How we measure Performance level Key action plans, What should be and follow the or improvement. crucial to reach for Objective Objective achieved and objective’s the objectives. what’s critical to the achievement.Customer theme success. Objective Objective Goal Indicator Target InitiativeInternal Processes ObjectiveLearning and Growth RULES: Objective • Each goal should have more than one performance indicator; • Goals and action plans should be related with indicators. 18
  19. 19. Balanced Scorecard for CMMI COMPANYAn Implementation Roadmap TEAMBSC Definition Process3. Create Strategic Maps (ST) - Example ST1 - Process Improvement Financial Increase Sales Develop new products. Customer Support customer needs. Increase the Customer Satisfaction. Internal Processes Increase quality of our Ensure the continuous solutions. process improvement . Identify solutions for problem solving. Ensure the continuous process improvement on our Department. Learning and Growth Guarantee HR Ensure that HR skills are aligned improvement with department’s needs. 19
  20. 20. Balanced Scorecard for CMMIAn Implementation RoadmapBSC Definition Process3. Create Strategic Maps (ST) - ExamplePerspective Goal Indicator Target Initiative Number of new products 10Financial Develop new products • I&D plan % Sales that correspond to new products 10% Average of request response time. 1 day Team memberCustomer Support customer needs. dedicated to Resolved Issues / Customer Requests 95% customer needs. Identify solutions for Nr. of improvement needs identified. 100 Improvement problem solving.Internal implementationProcesses Ensure the continuous procedure process improvement on Improvements / Improvement Needs 80% definition. our Department. Internal Training Ensure that HR skills are % Team with Blue Color. 100%Learning Plan Monitoring aligned with department’sand Growth needs. Technical Training Nr. of technical training actions. 5 plan. 20
  21. 21. Balanced Scorecard for CMMIAn Implementation RoadmapBSC Definition Process4. Relate Strategic Themes (Goals and Indicators) 21
  22. 22. Balanced Scorecard for CMMIAn Implementation RoadmapBSC Definition Process5. Identify the interest groups and relate them with the differentperspectives/themes BSC Perspectives Internal Learning Financial Customer Processes and Growth SG1 SG2 SG1 SG2 SG1 SG2 SG1 SG2 Client Interest Group Supplier Shareholder Employee Department X Financial sector Official Entities 22
  23. 23. Balanced Scorecard for CMMIAn Implementation RoadmapBSC Definition Process BSC Definition Process THE EASIEST PART IS NOW COMPLETE… BSC Implementation Process 23
  24. 24. Balanced Scorecard for CMMIAn Implementation RoadmapBSC Implementation Process BSC Definition Process THE HARDEST PART STILL IN PROGRESS… BSC Implementation Process 24
  25. 25. Balanced Scorecard for CMMIAn Implementation RoadmapBSC Implementation Process1. Identify and Evaluate Data Sources;2. Create additional data sources;3. Link data sources, operational metrics and strategic metrics;4. Define refresh data procedures;5. Define update responsibilities;6. Create the different BSC views. 25
  26. 26. Balanced Scorecard for CMMIAn Implementation RoadmapBSC Implementation Results(Until Now) Company Balanced Scorecard is composed of a number of weighted strategic KPIs for each perspective there is a vision, mission statement, values and strategy represented on the BSC the construction of this scorecard consists of the aggregation of several area/department scorecards 26
  27. 27. Balanced Scorecard for CMMIAn Implementation RoadmapBSC Implementation Results(Until Now) Area / Department Scorecard are composed of a number of weighted KPIs for each perspective, linked to the company BSC the construction of this scorecard consists of the aggregation of several team/personal dashboards each main functional area will represent a strategic theme which will be composed of a number of department scorecards 27
  28. 28. Balanced Scorecard for CMMIAn Implementation RoadmapBSC Implementation Results(Until Now) Team Dashboards are composed of a number of PIs for each perspective, linked to the area/department scorecards the construction of this dashboard can be done through the aggregation of several personal dashboards 28
  29. 29. Balanced Scorecard for CMMIAn Implementation RoadmapBSC Implementation Results(Until Now) Personal Dashboards are composed of a number of personal PIs for each perspective, linked to the Team dashboards 29
  30. 30. Balanced Scorecard for CMMIAn Implementation RoadmapBalanced Scorecard Key Issues 30
  31. 31. Balanced Scorecard for CMMIAn Implementation RoadmapConclusion (1/2)The balanced scorecard (BSC) allows us to link all themeasurement levels within the company.The definition and implementation processes are goodstrategic exercises:• Who’s my client?• What is the input and the output of my activities?• How do I contribute to the companies strategy?It creates the best conditions for a company with a CMMImaturity level to ML2 or ML3 to grow or maintain ML4. 31
  32. 32. Balanced Scorecard for CMMIAn Implementation RoadmapConclusion (2/2)It can only be implemented in a company if:• the strategy is defined;• the tool adds value and is used;• everyone can read and understand the BSC;• the necessary metrics are set;• the numbers are reliable and available;• the numbers represent the scope to be monitored;• there is commitment from everyone to the implementation;• enough time has passed so that everything has been refined and reviewed over and over again. 32
  33. 33. Balanced Scorecard for CMMIAn Implementation RoadmapBibliographyCMMI for Development v1.3, 2010Software Engineering Institute (SEI)The Balanced Scorecard – Measures that Drive Performance, 1992Robert S. Kaplan, David P. NortonPutting the Balanced Scorecard to Work, 1993Robert S. Kaplan, David P. NortonUsing the Balanced Scorecard as a Strategic Management System, 1996Robert S. Kaplan, David P. NortonThe Strategy-Focused Organization, 2001Robert S. Kaplan, David P. NortonBalanced Scorecard for Dummies, 2007Chuck Hannabarger, Rick Buchman, Peter 33
  34. 34. Balanced Scorecard for CMMIAn Implementation RoadmapQuestions?Eduardo Espinheiraeduardo.espinheira@gmail.comPaula Gomespffgomes@gmail.com 34

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