M i s s i o n C r i t i c a l S y s t e m s f o r H e a l t h c a r e a n d D e f e n c e Using Balanced Scorecard to help achieve CMMI Maturity Level 4 European SEPG 2005 Peter Voldby Petersen, Systematic Kent Johnson, Borland
Agenda � Who are we? � Focus of CMMI Maturity Level 4 � Highlights of Balanced ScoreCard Methodology � Goal Flow-down � Integrating Level 4 and BSC � Deploying Balanced ScoreCard � Lessons and Results $Revision: 1.7 $ 2
Systematic Software Engineering A/S � Established in 1985 and now Denmark’s largest privately-owned software and systems company � 370+ employees ; 70% hold a MSc or PhD in software engineering � High employee satisfaction – attractive workplace for ambitious software engineers � Dun & Bradstreet credit rating: AAA � Mission Critical High solidity. No bank debt – fully self-financing � CMMI Level 4 and ISO 9001:2000 and AQAP 110 + 150 � Supplier of products and projects to more than 27 countries , export share is 60% � 97% of our customers would recommend Systematic to other customers $Revision: 1.7 $ � For further information – see www.systematic.dk 3
Borland TeraQuest World Leader in CMM/ CMMI -based services Epner Layman Curtis Statz Oxley VP Sr. Dir. Chief VP VP Process Knowledge Process Officer Management Management Process Optimization: $Revision: 1.7 $ Experience � 11 Lead Appraisers � 20+ yrs. each 4
CMMI4 – to Control and to Predict � I mportant Level 4 Concepts: � Level 4 is focused on predicting the performance of the processes based on historical and project data and managing according. � Quality and Process Performance Objectives – important goals based on business objectives and past performance Predict quality and Control process variation process performance Vision Known effort, costs Predict results, e.g. and quality number of defects Focus Primarily past Primarily future (Measures) (Estimates) $Revision: 1.7 $ Method Remove special Prediction models causes for variation Source: I nterpreting the CMMI 5
CMMI4 – to Control and to Predict � Event Level Measure – a measure Exception process variation Upper taken at the completion of an event Control Limit (Defect Density for Process X) � Process Performance Baseline (PPB) Process Average – documents the historical results Lower from a process. Used as a benchmark Control Limit against actual project performance. Actual Performance � Process Performance Model (PPM) – describes the relationship among Actual Prediction attributes of a process and its work products. Based on PPBs and calibrated to the project. Used to estimate or predict a critical project value that cannot be measured until later $Revision: 1.7 $ in the project’s life (e.g., no. of delivered defects or total effort). Source: I nterpreting the CMMI 6
Process Performance Baselines and Models Status Measures Process Performance Baselines � Size � Review Baseline � Effort � Defects per page and per hour � Cost � Productivity Baseline � Schedule � Hours per requirement by phase � Effort Distribution Event Level Measures � Percentage of effort by phase � Hours per event - Productivity Process Performance Models � Requirement (defined) � Effort (estimation and prediction) � Requirement (designed) � New Development � Object Implemented � Maintenance � Test Executed � Defects, Size, Hours per Event – � Defect Insertion and Removal � New Development Quality � Design Review � Maintenance � Inspection � Test Executed Real Project $Revision: 1.7 $ � Days Late or Early - Schedule Decisions � Task Completed 7
Selecting the Right Business Objectives Corporate Business Process I mprovement Goals and Measures Recommendations and Measures supporting goal measure recommendation measure Strategic Goal supporting goal measure measure measure supporting goal measure supporting goal measure recommendation measure supporting goal measure $Revision: 1.7 $ 8
Using Balanced Scorecard (BSC) for Goals � BSC provides a mechanism to balance � internal goals and external goals � past performance and drivers for future performance � short term and long term performance � People, Process, and Technology investment Finance � Generally used categories Customers Internal proces. dimensions Vision � Customers � Finance Learning/growth. � Internal processes $Revision: 1.7 $ � Learning & growth 9
Setting up Balanced Scorecards � First, establish and communicate a strategy throughout the organization � identify key needs of customers and market segments; link those to financial goals � set financial objectives � focus on internal business processes and efficiencies in meeting customer needs � invest in learning and growth to excel with the processes � Within the scorecard � identify how to see financial goals are met � set targets for meeting customer needs � identify process changes or innovations needed $Revision: 1.7 $ � match learning and improvement objectives to these 10
It is not a simple task! Focus � Growth � Efficiency � Competence Strategic Strategy and Insight and Objectives Alignment � Time � Cost Tactical � Quality $Revision: 1.7 $ Making two different worlds work together… 11
12 Project Organizations are Dynamic � 2006 � = Definition of objectives � � 2005 Time Effort $Revision: 1.7 $
The Idea! I ntegrate the Balanced Scorecard and CMMI Maturity Level 4 Alignment Define Collect Control Predict Present Analyze Conclude Goal flow down $Revision: 1.7 $ Act! 13
Initial Thoughts � T h e p r o j e c t m u s t d e f i n e t h e i r o w n B S C � B o t h m o d e l s a r e a b o u t b u s i n e s s o b j e c t i v e s , m e a s u r e s , i n d i c a t o r s e t c � B o t h m o d e l s m u s t b e i n t e g r a t e d i n t o t h e w a y t h e p r o j e c t s w o r k ( p a r t o f t h e P r o j e c t s ’ D e f i n e d P r o c e s s ) � T w o r e p o r t i n g m e c h a n i s m s a r e o n e t o m a n y ! $Revision: 1.7 $ 14
Balanced Scorecard: Quantifying the Strategy Finance Vision and strategy To succeed financially Focus Areas how should we appear to our shareholders? Objectives Customers Internal Processes Targets To satisfy our share- Vision and To achieve our vision holders and customers, how should we appear at what business Strategy to our customers? processes must E we excel? x a Learning & growth m To achieve our vision, p how will we sustain $Revision: 1.7 $ our ability to change l e and improve? 15
Delegation and Goal Flow-down Types of delegation Corporate Project Staff ”Virtual” BSC delegation and Types of goal flow-down goal flow-down Include Use objective as is Change Change target value Project’s Redefine Define objective aligned with Stategic Focus Area BSC Omit Do not define objective $Revision: 1.7 $ 16
Defining Objectives Strategic Focus Area: Change ”Stable and reliable ability to deliver” Corporate BSC Objective: Deliveries according to schedule Target: > 90% Objective: “The same” Target: 100% ”Standard Project BSC” Strategic Focus Area: Redefine ”I ncreased Productivity” Objective: LOC pr project hour Target: > X Project’s BSC Objective: LOC pr implementation hour Target: > Y $Revision: 1.7 $ 17
Quality and Process-Performance Objectives Extrovert Functional requirements (ie. scope & size) Finance, Customer, Internal Processes, Employees Qualitative requirements (eg. usability, response time, scalability, testability, etc) Strategy Product Organization Project Process Project Resource consumption, Cycle time, Defect injection rates, Defect removal Duration, Staffing, Costs, etc efficiency, Delivery rate, etc $Revision: 1.7 $ I ntrovert 18
BSC Dimensions and Degree of Control Control Plan and Statistically Monitor using Predict track control thresholds Finance Customer Internal Processes $Revision: 1.7 $ Employees 19
Synergy of Models Balanced Scorecard BSC Definition Finance � Focus primarily on defining strategy � Strong in defining (balanced) goals � Customers Intern. proces. Little guidance in implementation Vision Learn./growth. Implementation CMMI level 4 5 � Focus primarily on implementing project goals 4 � Strong in implementing known/defined objectives 3 � Little guidance in finding the right objectives $Revision: 1.7 $ 2 CMMI 4 1 20
21 Plan and follow up Wall of Fame Important Lessons Change Progress I ndicators Communicate the vision $Revision: 1.7 $
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