Wipro: Best Practices in CMM-Based Software Delivery

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1 Case Studies, P. Iyengar Research Note 27 May 2003 Wipro: Best Practices in CMM-Based Software Delivery A successful Indian IT services enterprise with Capability Maturity Model Level 5 status has used an ongoing quality campaign to improve delivery capabilities, boost customer satisfaction and reduce the cost of services. Core Topic Application Development: Constructing Applications Key Issue What are effective programming languages, tools, techniques and processes for development in an increasingly complex application environment? Strategic Planning Assumption Incorporation of CMM- and CMMI-based quality procedures will significantly enhance the quality and productivity of the development process, resulting in best-inclass development processes, coupled with lower overall costs (0.8 probability). Wipro Technologies, a leading IT services enterprise based in India, has emphasized quality for more than a decade in its quest to improve services and productivity, and to reduce costs. Wipro's focus on quality began in 1995 with its bid to gain ISO 9000 certification. Quality initiatives at Wipro Technologies are driven completely from the top down. The chairman of Wipro Ltd. (Wipro Technologies' parent organization), Azim Premji, believes that quality is a key underpinning of all Wipro activities. Therefore, top management's continuous focus on quality has been a key driver for Wipro Technologies, and has achieved tangible results. Problem: Wipro Technologies sought to eliminate the perception in overseas markets, such as North America (primarily the United States) and Europe, that Indian offshore providers' quality and software delivery was inconsistent in the late 1980s and early 1990s. Objective: Bring continuous quality improvement to the software development process as an internal capability. Establish adequate quality credentials to develop credibility in key overseas markets, such as North America and Europe. Develop the "quality story" into an externally communicable competitive edge and differentiator in these marketplaces. Approach: It is obvious that Wipro takes quality seriously. In fact, nonconformance to quality measures is grounds for employee termination. Wipro has been at the forefront of the quality drive by Indian IT services enterprises. It was the world's first Capability Maturity Model Integration (CMMI) Level 5 and Gartner Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.

2 People Capability Maturity Model (P-CMM) Level 5 company, as well as the first Capability Maturity Model (CMM) Level 5 service company. It is also among the most devoted practitioners of Six Sigma as a quality initiative. The aggressive time frame of moving directly from Level 3 to Level 5 (see Figure 1) indicates the strong commitment of resources to the CMM initiative. Figure 1 Quality Evolution at Wipro Technologies Defects prevention Enterprisewide practices initiated at processes defined project level ISO 9000 CMM Level 3 Recertified twice Mature process metrics collection is begun CMM Six Sigma Level 5 Initiative Onthepathto continuous improvement Source: Wipro Technologies and Gartner Research (May 2003) P-CMM Level 5 World s first PCCM Level 5 company 2002 CMMI The quality philosophy at Wipro Technologies, branded as Veloci-Q (see Note 1), is a minimalist approach with maximum enforcement and constant feedback. Its Six Q's of Quality are: Can we do it better? Are we satisfying a customer need? Is it innovative? Does it provide superior value? Are we delivering what we commit? Can we do it better? These guidelines, coupled with a review of whether quality programs are actively contributing to corporate objectives (and whether they are measurable and quantifiable in this regard), keep the company's quality initiatives focused on the bottom line as well as the benefits to the customer. Results: Wipro's investments in quality have been substantial, with $3.1 million invested in the three-year period from 2000 to During this period, productivity improved by 40 percent, defects were reduced by 60 percent and on-time delivery improved from 82 percent to 93 percent. Going forward, the annual investment in quality initiatives is expected to be approximately $1.5 million. The impact of Wipro's quality initiatives can be gauged in detail from the following list of metrics that are tracked from year to year: 27 May

3 Note 1 Veloci-Q: A CMM- and Quality-Focused Development Process The project manager selects the life cycle for the project from one of 14 quality assurance (QA)-approved application development life cycles. A custom project plan is assembled for the selected life cycle, incorporating key elements of the CMM Level 5 process. It also ensures appropriate entry and exit points that are defined for each phase, and the identification of key metrics to monitor and manage the project. A formal project plan review is conducted, with the quality representative serving as a mandatory member of the review team. The metrics of the projects are captured monthly in the Project Data and Metrics Report, and project progress is monitored against the plan on a monthly basis by using the Project Monitoring Report. Compliance with the project-defined process is checked periodically by using the CMMI-Process Area Rating checklist. Additionally, internal and external audits are conducted once every quarter. The internal audit is conducted by trained Wipro Technologies internal auditors. The external audit is conducted by a third-party agency called DNV. Every project is audited at least once during the project life cycle. A mandatory configuration audit is performed before the release of each deliverable. The findings are recorded and tracked to closure in the Software Configuration Audit Report. A test audit is conducted to verify completeness of testing prior to the release of the software. At the close of the project, its performance is captured during the Project Performance Analysis (PPA), in the Project Performance Report, which includes a comprehensive postmortem of the project by all team members, including the quality representative. Customer feedback is also reviewed. On completion of the PPA and sign-off by the project manager and the QA manager, the project is closed and its information is placed on the company intranet for future reference. Defect reduction Phase containment The percentage of variation in effort (which is critical in minimizing cost overruns) The percentage of variation in schedule (which is critical in minimizing time overruns) Metrics are tracked on a "lines of code" (LOC) count, with internal targets for LOC metrics being set for each programming language that is used. Figure 2, Figure 3, Figure 4 and Figure 5 depict Wipro Technologies' progress in these four key metrics, which are of critical importance to customers Figure 2 Field Error Rate (Field error rate = defects per thousand lines of code) 88% 86% 84% 82% 80% 78% 76% 74% 72% 70% 68% Figure 3 Phase Containment 75% 81% 79% 87% 27 May

4 25% Figure 4 Average Percentage of Deviation in Effort 20% 15% 10% 5% 0% 25% 20% 15% 10% 5% 0% Figure 5 Average Percentage of Deviation in Schedule Wipro Technologies attributes the strong positive trend in these key metrics to the effectiveness of its quality programs. While it is understandably difficult to compartmentalize and match the specific contribution of a particular quality initiative to an improvement in a metric, it is critical to have at least a qualitative process of ensuring that each quality investment has a positive impact on the bottom line. The trends and indicators uncovered by the metrics clearly demonstrate that this is the case for Wipro. Critical Success Factors/Lessons Learned: "Impact on engagements" insights demonstrate how Wipro's quality capabilities have been used to affect end deliverables, and are actionable guidelines for enterprises that are attempting to leverage the CMM for internal benefit (internal application development organizations) or for external use (service providers). Quality Is Perceptual: Wipro clearly recognizes that "quality lies in the eye of the beholder," and that the enterprise must ensure 27 May

5 that the customer is closely aligned with this quality and can perceive its value. This must be accomplished without compromising the enterprise's internal, certification-driven process capabilities. Recognizing that quality is perceptual is a big step in identifying the most-appropriate mechanisms to leverage the enterprise's quality capabilities, directly and visibly, for the benefit of the customer. Impact on Engagements: An upfront review attempts to align the customer's process capabilities (or lack thereof) with Wipro Technologies' capabilities to reach a consensus on a project's process structure. This might include creating documentation standards for the project that combine the customer's processes with those used by Wipro, or, in some cases, making a case that the customer could benefit from adopting Wipro's standards directly. The key factor here is the upfront effort to reconcile quality-related issues with the process of project execution and administration. Certification initiatives are often launched with a clear eye on the sales and marketing boost that certification would provide. Wipro's level of quality certification is used aggressively by its sales and marketing team to achieve a strong competitive differentiation in the marketplace. However, Wipro's quality efforts do not end with certification, which provides additional benefits to the company. Quality Is Measurable: Wipro does not undertake quality initiatives that cannot be measured in a quantifiable manner. Similarly, any metric that is not quantitatively measurable is not tracked as part of the quality initiative. Impact on Engagements: The "CIO dashboard" available to customers as a standard part of any engagement enables a high level of "drill-down" to provide a near-real-time assessment of a project's status. The ability to customize the dashboard with specific metrics that a customer wishes to track is a useful capability that effectively supports "management by exception" at the customer end. Customers have a high degree of assurance that quality initiatives applied to their projects are focused and meaningful, and are not just adding overhead to the development process with no measurable returns. A concerted attempt is made to squeeze identifiable costs out of the development process through the use of sophisticated quality measures. This reduced "cost of services sold" (COSS) is worked back into the overall pricing 27 May

6 structure in the following year, which raises the benchmark for competitors regarding pricing. Quality Is Relative: Quality initiatives and achievements are constantly redefining the scale and benchmark, with last year's achievements typically becoming this year's baseline for further incremental improvements. Impact on Engagements: COSS reductions, achieved through implementation of quality measures, are worked back into the new baseline pricing structure as part of an annual review. By treating last year's achievements as this year's baseline, there is constant management focus and pressure on continual process improvement through the application of suitable quality measures. Wipro balances and augments CMM projects with Six Sigma initiatives. (See "Balancing Six Sigma and the Capability Maturity Model," available from Gartner Measurement at icles/2002_10/six_sig.jsp, for information on the best ways to combine and position CMM/CMMI and Six Sigma initiatives.) Acronym Key CMM Capability Maturity Model CMMI Capability Maturity Model Integration COSS cost of services sold LOC lines of code P-CMM People Capability Maturity Model PPA Project Performance Analysis QA quality assurance Bottom Line: The entire development process used within Wipro's application sourcing practice revolves around quality in general and CMM/CMMI in particular. Through a single-minded but judicious emphasis on quality as a guiding principle throughout its delivery processes, Wipro has shown impressive improvements in delivery capabilities, client satisfaction, and the ability to continually reduce the cost of services, which it aggressively passes on to its customers. This "closed loop" cycle, which leads to a continued reduction in cost of services while increasing quality, is a key guideline for application development groups within end-user organizations, as well as for service providers. 27 May