Enterprise Software Delivery:

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1 Enterprise Software Delivery: Balancing Agility and Efficiency in the Global Software Supply Chain Alan W. Brown IBM Rational CTO for Europe

2 Agenda Background and Context Globally Distributed Delivery The Global Software Supply Chain View How to be agile.not fragile Where to focus. Summary 2

Smarter Software-Driven Products Require a New View Global interconnection across products, systems, applications and networks System of Systems Fleet and traffic management systems Smart grid hybrid

3 Smarter Software-Driven Products Require a New View Global interconnection across products, systems, applications and networks System of Systems Fleet and traffic management systems Smart grid hybrid / electric vehicle recharging Emergency services, vehicle diagnostics, and GPS / location services Integration of vehicle subsystems into a functioning automobile Systems Engineering Collaboration and visibility across diverse teams and disciplines 360 degree surround vision Driver assistance safety alarms Hybrid and electric vehicle control Softwareintensive Subsystems Adaptive cruise control Intelligent navigation Predictive collision avoidance 3

4 Summary: Focus on balancing best practice to enhance customer value, improve quality, and increase efficiency Speed and Innovation Delivery Discipline Discipline Transparency and Reporting Strategy and Portfolio Mgt Risk Mgt Vendor and Supplier Mgt Financial Mgt Enterprise Architecture Mgt 4

5 Ten Major Trends Driving How Next-Generation Services are Discovered, Delivered, and Consumed 5

6 .and many more that may surprise us!! 6

Why Do Software Project Fail? Understanding the software engineering lifecycle 1. Unstable, changing requirements (95%) 2.

Inadequate cost and schedule estimating (80%) 5. False promises by marketing and sales personnel (80%) 6.

Inexperienced clients who can't articulate requirements (60%) 9. Inexperienced project managers (50%) 10.

7 Why Do Software Project Fail? Understanding the software engineering lifecycle 1. Unstable, changing requirements (95%) 2. Inadequate quality control and poor quality measures (90%) 3. Inadequate progress tracking (85%) 4. Inadequate cost and schedule estimating (80%) 5. False promises by marketing and sales personnel (80%) 6. Rejecting good schedule estimates for arbitrary dates (75%) 7. Informal, unstructured development (70%) 8. Inexperienced clients who can't articulate requirements (60%) 9. Inexperienced project managers (50%) 10. Inadequate tools for quality/analysis, lack of inspections (55%) 11. Reusing assets filled with bugs (30%) 12. Inexperienced, unqualified software engineering teams (20%) 7 From Caper Jones Visualization of change and complexity

8 Summary: Challenges to effective software delivery today Complexity Challenges More granular service functionality in composite business applications Large number of projects and assets including custom, outsourced and packaged Team Challenges Geographically dispersed teams that often include business partners Effective cross-organizational visibility and synchronization, sharing becomes an imperative Process Challenges Need for market experimentation Blind adherence to process insensitive to potential business trade-offs Need for agility at scale Tools Challenges Lack of standards impacts ability to collaborate, automate and report across teams and assumptions Frequent asset updates and changing interdependencies How do I understand this new world to gain advantage? 8

9 Globally Distributed Delivery Extensive globally distributed delivery models taking many forms. Evolving From Offshore labor primarily in India and China Evolving To Labor in multiple geographies around the globe Offshoring provides cheaper labor Offshoring provides efficient access to a larger talent pool and leading edge technologies Numerous tactical vendors 3-5 strategic outsourcing vendors Global delivery is a specialty Global delivery is the standard Dominantly technical programming Focus on maintenance projects and Large discrete units of work Consulting, BPO, SOA, and infrastructure Smaller global teams delivering based on components and features 9

10 Global Delivery of Software: An Example Analysis Design Construction Component Test Function & Performance Test Deployment Project Near-Shore (East Europe) 30% 40% 40% 20% 20% 70% 80% On-Site (Europe) 60% 100% 100% 60% 60% 20% Off-Shore (India/China) 10 Contractors/external staffing

11 Example: Global IT Delivery in Large Insurance Company Client Business Client Business Client AD&M Client AD&M AM AD Testing TCS IBM TCS CSC CSC Other 3rd Party client AM AD Testing TCS IBM IBM CSC Other 3rd Party client CM CM Service Integrator 11 Skills and time-based delivery Hours x rate card Utilisation measures Location-based model Global Delivery Centers Staffing levels-led Re-usable assets and automation-based delivery Outcome-based cost Performance-based value measures Virtual workflow across centers and geos with emphasis on local interaction and communities Globally integrated capability model with Centers of Competency Innovation-led

12 The Global Software Supply Chain In the beginning Typical Practice Advanced Practice Country-based delivery Utilization based Limited collaboration No workflow management No reuse Limited visibility None Standalone development and project management tools Onshore / Offshore Deliverables based Core team collaboration by project Limited workflow management Ad hoc reuse Visibility of standard project metrics Ad hoc improvement processes Technology Platform Limited tool integration and collaboration capability Networked Global Centers Outcome based Community Collaboration across process and technology Component-based workflow management Systematic reuse Pervasive transparency of all project artifacts Continuous improvement with Lean Integrated technology platform enabling real-time collaboration and AD/M automation 12

13 Example: An Insurance Client's Software Supply Chain View of IT Leading SE Practices / Methods Insurance Enterprise architecture frameworks, SOA Outcome based measurement Disciplined Agile Delivery (3-lane motorway) Application Rationalisation Personal Development Frameworks Skills & Capabilities Attract, develop and retain talent with the right skills, experience and attitude Target Architecture Driven by business criticality and simplicity to ensure change happens fast Talent Development and Retention Methods & Tools The right methods and tools to increase productivity and quality Culture Global Enterprise Operating Model End-to-end Design and Architecture A culture shifting from order takers to innovators, advisors and collaborators Sourcing & Alliances The right partners to provide on-demand capacity and value Quality Organisation & Governance A clear effective organisation and governance structure Processes The effective processes to manage AD&M and the interfaces with them Integrated delivery Managed Services Continuous Improvement Effective contracting Innovative Sourcing Systems/ Service Integration Collaborative Development Environment Integrated Software Development Tools Centres of Competencies (Agile) 13

14 Software Supply Chain Today s structure to govern IT It is time to look at the role of IT in a different way Banking Business Domains Unit Insurance Business Domains Unit Demand Transformation Solution Development Strategy Project/program Portfolio Quality IT Service Deployment Test Delivery and support Strategy Integrated Service Desk Business Operations End-to-end Service Transformation Deployment Strategy Service Supply Transformation Partner New Capability Delivery Transformation Partner Infrastructure Partner Transformation Partner Change Release Service Partner Application Service Partner Maintenance and Support Services Infrastructure Partner Service Partner Changing the Business Running the Business 14

15 Software Supply Chain Today s structure to govern IT Detailed view of activities Banking Business Domains Unit Insurance Business Domains Unit Demand IT Innovation Account & Demand Sourcing Office Policies & Standards Architecture Regulatory Quality Risk Business Operations Transformation Solution Development Strategy Project/program Portfolio Deployment Test Service Delivery and support Strategy Integrated Service Desk End-to-end Service Supply Transformation Capability Delivery Transformation Delivery Partner Project Transformation Delivery Partner Project Transformation Delivery Partner Project Infrastructure Partner Deployment Strategy Change Release Maintenence Service Services Application Service Application Service Application Service Maintenance Partner Partner Run Partner Infrastructure Partner Partner Changing the Business Running the Business 15

Agile@Scale in Software Delivery Doing Agile.Thinking Agile.

16 in Software Delivery Doing Agile.Thinking Agile.Being Agile Smaller scale agile development experiences need to be adapted to enterprise software delivery Economic governance Measured improvement Disciplined delivery There is a difference between: Scaling agile practices in collaborative teams Introducing agile practices to scaled collaborative teams Providing agile collaboration to scaled teams What are the practical implications? 16

17 Achieving Agility at Scale Agile development practices are now widely used Agile Development Agile Delivery Disciplined agile teams: 1. Produce working software on a regular basis. 2. Do continuous regression testing, and better yet take a Test-Driven Development approach. 3. Work closely with their stakeholders, ideally on a daily basis. 4. Are self-organizing, and disciplined teams work within an appropriate governance framework. 5. Regularly reflect, and measure, on how they work together and then act to improve on their findings in a timely manner. 17

18 Example: Agile Software Delivery in Large Telco Company A sense of pride and ownership in every aspect of software delivery! Energy and excitement about their work and the results! Openness and willingness to share experiences! 18

19 The text book version of agile is not aligned with the realities seen in software supply chains... Global transparency ignores need for multiple, customizable layers of visibility, privacy, security, etc. Lack of strong focus on contracts and formal agreements Limited need for high-level and multi-level planning No sub-contracting of deliverables (incl. off-shore) User and acceptance test can be performed in each sprint No need for a project manager, resource manager, etc. Product owner is one person Limited focus on reusable platforms and services Etc. etc. 19

20 A Framework for Analysis Gartner Adoption Curve Visibility (energy) Peak of inflated expectations 1 MyProj Agile Chasm Slope of enlightenment Plateau of productivity FSS Agile Adopters 1 Investment bank 2 Major Life Insurer 3 FS Service Provider 4 Retail Bank 5 Banking Software Provider 6 Insurance Company Technology trigger Trough of disillusionment Time Agile Maturity Stages Single project trial Agile projects Multiple independent projects Pilot programme Agile governance Agile programme Multiple programme portfolio Agile governance + Agile transformation Organisational transformation Agile culture Agile governance + Agile beyond the hype As organisations learn how they can really benefit from Agile, they evolve from projects, to programmes to organisation wide transformation. In short, they mature from Agile practices to an Agile mindset. MyProj Increasing Agile maturity 20 Today Target

21 The Focus for Agility from a Software Supply Chain View Collaboration Improve communication on priorities and improve workforce empowerment across teams, organizations Automation Lower costs and improve quality by automating workflows based on real-time information Optimization Continuously improve by measuring progress against desired business outcomes Governance and Measurement is focused on Outcome over Output Empowered teams over Resourcing Prioritizing over Planning Features over Projects 21

22 Experiences with Seven habits of successful agile adoption Be explicit about you agile goals Understand the dimensions of scale up/out Use measures to govern behaviour Focus early on quality as a team issue Re-skill your project/program planners Grow with a clear adoption plan Think globally, act locally! 22

23 Agile Practices Form Part of a Broad Improvement Effort 23

24 Focus Practices on Goals and Measurable Results 24

25 Agile Performance Metrics: Core Answers (all reported by common reporting period) Delivery Rate vs. Plan Burndown/Velocity % h t ig 120 Are we on schedule? e 100% W If not, how far behind? y 100 b When will we complete? 80% s 80 re 60% tu 60 F e a 40% % g a te g re 0 0% A Reporting Period Velocity: Plan Optimistic Best Guess Pessimistic Planned Features Delivered Features % of Plan To-Date Actual Burndown (Features Remaining) Delivered in Period t 160 h ig 140 e W120 y b s 100 re 80 a tu F e 60 te 40 g a re 20 g A 0 Are scope changes overwhelming our ability to deliver? Scope Change Rate (Add, Modify, Remove) Reporting Period Baseline Features Added / Modified Features Removed Features 350% 300% 250% 200% 150% 100% 50% 0% Delivery / Labor Cost Performance Are our estimates good? Do we have enough staff? What will it take to complete? Reporting Period % of Plan To-Date % of Plan Spend Rate Cost EAC % Projection 140% 120% 100% 80% 60% 40% 20% 0% Integration Test Quality (High Severity Defects) Do we have enough test coverage and execution? Is the quality of our deliveries good enough? Reporting Period % Defects Open Defect / Test Run Ratio % Test Cases Run In Period Feature / Test Run Ratio Here are the key management questions answered by each chart. An inability to answer any of these questions serves as a source of fundamental risk. 25

26 Rational and the Global Software Supply Chain Optimize Enterprise Assets Transform Information Technology Deliver Smarter Products Business Planning & Alignment Product & Project Governance, Metrics and Reporting Collaborative Lifecycle Requirements and Architecture IBM and Business Partner Ecosystem 26

27 Summary: Focus on balancing best practice to enhance customer value, improve quality, and increase efficiency Speed and Innovation Delivery Discipline Discipline Transparency and Reporting Strategy and Portfolio Mgt Risk Mgt Vendor and Supplier Mgt Financial Mgt Enterprise Architecture Mgt 27

28 For more information see this new book! Available now! 28

Innovating at Internet Speed: How to balance speed and efficiency in the digital age

Innovating at Internet Speed: How to balance speed and efficiency in the digital age Alan W. Brown Professor of Entrepreneurship and Innovation Surrey Business School University of Surrey, UK alan.w.brown@surrey.ac.uk