Want to really understand how to maximize performance in an outsourced ADM environment? Global Delivery is powerful, and with some straigh-forward rules, can increase productivty and improve software quality.

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Presented by:
Steve Hall, Partner

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Creating the Optimal Global Delivery Model
There are multiple levers to drive efficiencies in an ADM environment, but
they have to be aligned to organizational goals .
Determine Target Operating Model – Plan, Build, Run; RtB-CtB; Supply/Demand
Determine Application Sourceability Index – Are apps supportable in a global
model?
Determine Sourced/Retained roles – what roles and apps should be fully retained
and how does that impact approach?
Validate the Business Case – what levers can be used and how does this impact the
goals?
Select optimal sourcing model – align suppliers by technology, business unit,
development lifecycle, etc.
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High defect rates and poorly constructed code results in higher
maintenance costs (Technical Debt)
Lack of standards and ITIL processes result in poorly defined scope
for maintenance activities
Lack of clear measurements to determine size of portfolio (e.g.
Function Points or Use Case Points) results in over-estimating
maintenance effort
There are challenges shifting to a Global Delivery Model
The goal is to increase Productivity and Improve Software Quality…

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But there are Four Levers to Improve Application Productivity
Rate Card Improvement
Rate Card Conformance
Reduced Vendor
Utilization
Increased Location
Economies
Increased Delivery
Model Efficiency
SLA Driven Managed
Services
Reduction of Rework /
Increase in Quality
Supplier Role & Cost
Optimization
Supplier / Contract
Rationalization
Improved Operating
Processes
Reduced Headcount / Managed Attrition / Increased Skills / Increased Longevity
Improved
Application
Spend is the
Goal
$$
Time
Application Rationalization / Increased Quality / Improved Maintenance Efficiencies
Financial Levers Operational Levers
Resource Levers
Application Levers44
22 33
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A Managed Service Model typically yields the best results
• Defined Services (SOWs) and SLAs –
Statements of Work specify the “What” not
the “How”. Defined Service Levels with
measured performance goals aligned to the
Services
• Defined Pricing - Fixed Price models
w/variable component that allows ramp-up
and ramp-down of costs based on volume
and need
• Defined Risk Model - Manage overall
sourcing risks via Product Quality risks (is it
supportable in a production environment),
Contract terms, Skill mix, Onsite/offshore
ratios, geographical locations, etc.
Attributes of an ADM Managed Service AgreementAttributes of an ADM Managed Service Agreement
There are multiple operating models used when implementing a managed service in the
ADM environment. Though the operating models are important to the overall strategy,
each contain three (3) basic components that support the managed service model.

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1. Clearly define the ADM Services into three (3) main categories and,
from a cost perspective, manage these categories separately
• Maintenance
• Minor Enhancement
• Project Based work
2. Define a retained organization that is aligned with the strategy
• Business liaisons – coordinate between business and IT leaders
• Program/Project Managers –retain to manage large programs
• Architecture - client driven
• Business Analysis – understands business and requirements
• Service Delivery Managers - manages the sourced relationship
• Developers & Testers – support retained applications and some subject
matter experts
Top 5 ADM Success Factors

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3. Define end-to-end Service Level Agreements to incent suppliers to
work with each other in a multi-supplier environment
4. Embrace CMMi – process makes a difference
• Service Levels and Quality goals are often aligned with process maturity –
the more mature organizations can be contractually obligated to deliver
higher quality code
• Process adherence drives repeatability and productivity improvements –
incent Service Providers to operate at CMMi Level 3 or higher with
committed productivity improvements
• Conduct on-going operational assessments to ensure process adherence
5. Use Key Performance Indicators (KPIs) and dashboards
• Earned Value Analysis (EVA) using Schedule and Cost performance index
• Defect injection and probability statistics for software quality
• Structural Quality, regression testing, defect detection, and test coverage
ratios
Top 5 ADM Success Factors

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