Strategy Based View and Balanced Score Card Approach to Quality Assurance. Presentation at QAI Software Testing Conference 2012

Transcription

1 Strategy Based View and Balanced Score Card Approach to Quality Assurance Presentation at QAI Software Testing Conference 2012

2 Salient points to consider before we start Software Quality Assurance is a hard sell internally within organizations In India, there has been a mushrooming of Testing Service providers Why? IT application development is viewed as strategic while testing is tactical Belief - The IT application delivers competitive advantage. Not testing!!! The testing metrics and measures are aligned to overall project metrics What are the benefits delivered by Intangible Assets? Services of outsourced testing services providers (OTSP) is commoditized

3 Analyze this Internal IT projects does not track QA performance separately OTSP managed projects track the Project Management & CQT metrics Most of the OTSP s have almost similar set of testing services, tools, solutions & accelerators, approach and benefits story Often repeated testing benefits - CQT advantage & Independent Testing Testing service is commoditized and tactical. Tucked within Enterprise IT Testing service is a low-entry barrier service No Differentiation

4 Current set of testing Metrics (A sample set) Testing Metrics Delivery Levers for the metric Entry Barrier? Test Preparation/execution productivity Testing effectiveness Schedule Variance Test Automation Test case reuse Solutions & accelerators Defect prevention techniques & CMMi/TMMi Domain knowledge & BA s Knowledge management systems Leverage KM systems to scale up Test automation strategies Medium Low Low Low Low Low Ease of Replication

5 So What is wrong with our current approach The QA metrics are tactical measures and not Strategically Aligned 90% of providers offer the same set of QCT advantage QA benefits articulated are narrow focused End customer of an OTSP does not visualize competitive advantage All testing metrics are only aligned to Cost Savings financial outcome None of the OTSP s align the leading drivers to lagging outcomes Few OTSP s align its QA setup to the customers business imperatives Role of intangibles like Organization behavior, culture, etc is not factored into the metrics and outcomes

6 Introducing Strategy Maps It is an Effective visual representation of organization s strategy Helps communicate how the organization s objective will be realized The role of systems, processes and stakeholders in the strategy Depicts linkages between activities and outcomes

7 Example of a Strategy Map Source: Strategy Maps Kaplan & Norton

8 Repositioning Software Quality Assurance 1. Analyze Organization Business Objective 2. Analyze QA against Business Objectives 3. Determine Strategic Gaps & Readiness 4. Align QA Strategy Map to Business Strategy Map 5. Develop a Balanced Score Card Study the Organization s business Strategy Map Identify sources of Sustainable Competitive Advantage for QA Align QA Strategy Map to Business Strategy Map Align testing Lead Indicators to be Business KRA s Identify and measure the contribution of Intangible assets Create a QA Balanced score card across the various strategic dimensions

9 1. Analyze Organization s business Strategy End objective of organization is Financial Perspective Higher profits, market share or share holder value Delivering on Customer Value Proposition to realize Financial Objective Devise internal process changes to deliver to Customer Value Propositions Manage Organizational Readiness around Human Capital, Information Capital and Organizational Capital

10 2. Analyze QA against the Business Objectives Identify QA Sources of Sustainable Competitive Advantage Is it generic and hence be replicated/substituted? What is my competitors capability matrix? Are my solutions & tools/accelerators a differentiator in the market place Do my offerings deliver Business value and how? Desired changes internally to be sustain competitive advantage Asset/Tool/Activity Generic/Differentiator Asset/Tool/Activity Generic/Differentiator Certified career testers Generic CMM Level-5 Generic Testing training to resources Generic Human Capital Readiness Differentiator Organization culture Differentiator Testing certifications Generic Knowledge Management Generic Innovation Labs Differentiator

11 3. Determine Strategic Gaps & Readiness Identify the QA Value adding assets Identify QA Process Assets Analyze the organizations Internal Competencies and Capabilities Determine the strategic fit between the assets, competencies, capabilities, processes etc with the Clients Business Objectives Determine firms QA performance with the Benchmark Performance

12 4. Align QA Strategy Map to Business Strategy Clear alignment of QA and testing with business strategy. Notice the alignment across the various strategic perspectives

13 5. Develop a QA Balanced Score Card

14 How do we measure the contribution of Intangible assets

15 Case Study Customer Background Netherlands Headquartered International Bank Annual IT budget of over 2.2 B Euros Outsourced IT services as part of global outsourcing deal Wanted to lower the total cost of application ownership Regain customer mindshare through E-Channels Support integration of its US acquisition Ensure regulatory compliance in each country of operation OTSP Delivered Approach/Activities QA organization of the OTSP restructured Performance measures aligned to client KRA s Customer shared the IT Strategy Map of enterprise OTSP presented solutions that were aligned in each BU OTSP trained associates on Dutch banking Setup a regression test lab offshore OLA s to manage multi-vendor collaborations Benefits Realized by Customer 39% testing cost reduction over 3 years and cost savings of 5.8 MUSD through elimination of a test region E-Channels rolled out across Benelux region customers Customer satisfaction ratings increased by 21.3% in 2 years Faster resource ramp ups realized for time critical projects In compliance with the SEPA, MIFID and BASEL II regulatory requirements Benefits Realized by Service Provider Penetrated newer Business Units & Geo s of customer Grew to become a 700+ member testing engagement Operating margins went up by 19% through use of automation solutions Rebranded itself as Large TCV testing service provider Testing facilitated new client acquisition for the provider

16 Summary & Conclusion The current set of metrics and measures are tactical in nature Adopt a strategic set of measures and realign it to clients business outcome Analyze the organizations Gaps (& readiness) and bridge those Incorporate structural changes to facilitate the interplay between the various strategic perspectives Use strategy maps to get a visual representation of the organizations strategy Balanced score card is a strategic tool to be used to ensure sustainable competitive advantage

17 THANK YOU