Measurement and Providing Value to the Business ISMA Keynote 2011
Here is a copy of my keynote talk at the 2011 ISMA measurement conference, Measurement and Management and Business Value. The real point is the IT and measurement personnel have the information, knowledge and skill set to provide value to the business, far beyond the costs generate. But the information needs to be communicated in terms leaders can understand rather than the techie language we all think and speak in… AND if IT starts showing how it contributes to the business and becomes a profit center instead of a cost center IT will get more money to apply to more valuable things.
UPDATE: Someone also asked for a reference communicating the language of management. I believe this publication on business case analysis to be helpful in that regard.
PS In my talk I referred to software and measurement people as geeks. To many the term geek is a source of pride. One person in the talk was offended by being called a geek. My sincere apologies. However modern vernacular often defines a geek as a lover of technology, a software developer or someone with an intense love of mathematics. I consider myself a geek. And my friend Paul Glen makes his living by “leading geeks.”
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The Planning Fallacy Revisited
This article is definitely worth a look: continuing studies that people underestimate the time and effort to perform all kinds of tasks.
This causes no end to issues in all kinds of systems: software, hardware, IT, manufacturing, student homework, you name it. One study did find that if people optimistically estimated the effort for a task and that task could be done in a single session, that productivity could increase.
Several factors reduce this planning fallacy. Preparing a risk management matrix can improve the underestimation of tasks. But planning fallacy is more prevalent in teams than with individuals.
The tendency to underestimate can be mitigated with estimation models.. so long as ranges and risks are defined.
Of course the reason we continue to study optimism in planning is to help ensure that people get good credible estimates from models – and when models and individual thinking disagree, that they are reconciled.
The paper covering procrastination and the planning fallacy is also a classic and worth a read.
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Establishing the ROI on Software Through Examination of Total Ownership Costs
I get so excited when an organization does a true business case and evaluates cost versus benefits of a software / IT system along with the risks. . Part of the key is thinking and analysing and communicating like a C llevel person rather than like a technical person. Here is a link to the PowerPoint I did a webinar on this topic during July 2011 Establishing the ROI on Software Through Examination of Total Ownership Costs. The full recorded webinar is available on the ITMPI site as well.
One might say that business case analysis is finance 101 and I would agree… Sometimes uncommon success is achieved by doing common things uncommonly well.
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DoD $150B Reinvestment of Efficiencies Savings
Secretary of Defense Gates announced design efficiencies that should reduce overhead costs, improve business practices and trim some defense programs.
“This Department simply cannot risk continuing down the same path – where our investment priorities, bureaucratic habits, and lax attitudes towards costs are increasingly divorced from the real threats of today, the growing perils of tomorrow, and the nation’s grim financial outlook.”
Tough decisions for tough times make cost estimating and analysis a key component. Gates stated his goal to have every defense dollar invested in the smartest manner. The efficiencies continue a process to reshape and re-balance the defense budget that has already saved the nation $300 billion.
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Seven Habits of Highly Effective Parametric Model Use
Be Proactive: Identify cost targets, Find ways of meeting conflicting goals, Acquire / Build and know your models
Begin With the End In Mind: Understand what the key cost and requirements issues are as well as the estimate goals
Put First Things First: Planning training, planning, substantiation
Think Win/ Win: Negotiate so costing/pricing/performance yield fair return Fixed price low bid may be a Lose/Lose Optimize alternatives for Cost Vs. Requirements & Performance
Seek First to Understand, Then to be Understood Don’t just throw model inputs at stakeholders; understand the problem
Synergize: Combine knowledge/Resources with COTS Models; Use integrated product team approach to provide cost model inputs and feedback
Sharpen the Saw: Spend some resources to improve processes & tools
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Alpha Acquisition Process And Impact On Cost Analysis
The Alpha Acquisition process may provide a cost savings to both government and contractors. The following is from the Defense Acquisition University website:
The alpha contracting process involves many activities performed jointly by the Government and contractor teams.
This process innovation offers a number of advantages and performance enhancements, such as:
- Improving communications
- Decreasing the number of formal RFP iterations
- Lessening revisions and rework required to correct misunderstandings
- Reducing errors and mistakes
- Shortening the cycle time (procurement administrative lead time or PALT) required for contracting
- More
The benefits of Alpha Acquisition are not limited to reducing procurement acquisition lead times.
Contractor Reduced Proposal Preparation Costs
The contractor benefits by significantly reducing proposal preparation costs. Alpha Acquisition is a framework for expediting the acquisition process. The purpose is to eliminate any unnecessary processes and reviews, and to streamline and conduct in parallel the required ones. Nevertheless, the same issues addressed in standard procurements are addressed in Alpha Acquisition, the same questions asked, and the same support provided. However, it is all done much more quickly and started earlier in the process.
DCAA Cost Savings
One benefit includes the early involvement of DCAA personnel in the immediate utilization of rate recommendations, rather than at some later date when significant updates would have occurred. This results in a cost and time savings for DCAA by precluding subsequent reviews.
DCMC Savings
DCMC receives a cost and time savings by performing one review rather than several as a result of proposal updates.
Additional Government Program Office Costs
See the comment attached to this BLOG entry from one working in a program office.
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Dan Galorath Presentation at SEER / Tracer Seminar In Tysons Corner October 2009
It was exciting to participate in a seminar with Computer Aid and their ITMPI recently. Here we discussed concepts of software management and how Galorath’s SEER with project estimation, planning and control supports CAI’s Tracer product witch does root level process and task management.
Jim Ryan first spoke and discussed how the manufacturing revolution worked and how much of the success in manufacturing process and process measurement can be applied to software development. And excellent presentation that made a lot of points really apparent.
Next Dan Galorath went through software management techniques (click link to view presentation) that most likely yield successful projects, including estimation (cost estimating, schedule estimating, defect insertion/ removal estimation an more), planning, control, measurement, commitment and other items.
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Have We Lost Our Ability to Estimate Software Size?
Following is an update to Galorath’s David DeWitt’s article on software sizing:
Have We Lost Our Ability to Estimate Software Size?
by David DeWitt
“I’ve Been Slimed!” – Dr. Peter Venkman, Ghost Buster
I can clearly remember that day I arrived at work – towards the end of the year 2003 – it was easily before 6am. I was leading a small team tasked with prototyping a test environment for a NASA proposal. I stood there amazed as I watched my two programmers demonstrate a completely reengineered satellite simulation environment. Wait – let me be clear – within only a few days – they rewrote close to 30,000 lines of FORTRAN and another 4,000 lines of assembly code. How did they do it? They called it “goop.” “The hand cleaner?” I asked – rather befuddled. No, they were referring a new development language by LabVIEW (National Instruments) called “GOOP” – short for Graphical Object Oriented Programming.
That was the day I decided to stop being a programmer. I was, at my ‘age,” no longer really interested in keeping up with the latest programming paradigms (and vernacular – such as “paradigm”). I decided to abandon the past and embrace my role as a program manager. But now, looking back I wish I had asked a few more questions.
Measuring Failure
In 1995 the Boston, Mass. – based IT project management research and consulting firm The Standish Group released their first CHAOS Summary report. The report quickly became an industry score card for measuring the success or failure of IT projects; due mostly in part to the astounding percentage of failed projects disclosed in the report. The report served as a wake-up call that appears to have been heard – the 10th anniversary CHAOS report announced that the percentage of failed projects had been reduced by more than half. But alas, within a mere five years, the number of failed projects is back on the rise; the 2009 Standish Group CHAOS report indicates that nearly 1 in 4 projects are doomed. But why?
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The Sooner You Fall Behind, The More Time You Have To Catch Up
I received an email from the Josephson Institute of Ethics today that included this quote from a well known comedian: “The Sooner You Fall Behind, The More Time You Have To Catch Up.”
As I pondered the absurdity of the statement my mind focused on the many projects I have seen where this might have been taken seriously. I recall, many years ago, preparing an estimate for a new project, an in-house typesetting system. While this was not the most complicated software in the world, it took a lot at that time to do a decent job of typesetting with hyphenation, justification, kerning, leading, etc. all having to be implemented by hand generated code (how big is Knuth’s TEX application?). The customer had received a proposal from a trusted supplier (who did business reporting software) to build an entire system in just months. When confronted with the implausibility, the vendor’s only response was, “I just know I can do this.” Thank goodness the customer didn’t go for it. If they had, what would have happened… After the original target day came and went there would have been a flurry… a descoping… more promises that “we are almost done, I just know it”… and after a year or two the project would probably have been canceled.
I recall another time, very early in my career… before parametric estimating, when we had a 4 terminal cluster system to develop. We had a functional spec and a (probably poor) estimate. We saw an ad in a computer magazine that said this particular programming language would cut costs to 10%. The supplier came out and guaranteed it: even bidding fixed price and just a few weeks for the entire job. I must admit I wondered how the vendor would do it… an assembly line type of setup where a team would pass information and where a chief programmer would allocate tasks or what. When the big day came one guy showed up. He worked about 24/7. The deadline came and went. Still no worries… it was the world’s answer to software and it was fixed price. Six months came and went. Now the vendor came in and said they couldn’t do it. Four employees plus the vendor and 5 months later it was complete.
I have heard it said that if a cost performance index was below .95 or so, the project cannot catch up. While no one wants their projects to be in trouble, isn’t it valuable to understand what you can’t catch up?
Viable plans help make successful projects.
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New Survey Casts Shadow On Cloud Computing Adoption
15% of corporate customers planning to use cloud in the next year.
A network world article shared results of a survey:
About 15% of corporate customers are considering cloud computing over the next year
The survey of 300 corporations worldwide found that 38% are undecided or unsure about whether they will adopt cloud services, and another 47% said they are not considering implementing cloud in the next year. Security is the biggest roadblock.
85% of corporate customers will not implement a private or public cloud in 2009 due to security concerns.
The findings may be surprising given the industry’s current obsession with cloud computing, but the numbers aren’t too far off the findings of other surveys. Forrester recently found that 25% of enterprises with at least 1,000 employees are using or plan to use hosted virtual server offerings such as Amazon EC2, and that fewer than 20% of smaller companies plan to do so.
Earlier this year, Gartner said that cloud application infrastructure technologies are not yet mature and that adoption right now is limited mostly to “pioneers and trailblazers.”
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Project Prediction Infographic
