CMMI - Jacobs Technology
CMMI - Jacobs Technology
CMMI - Jacobs Technology
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
The <strong>CMMI</strong> SM and the<br />
Bottom Line<br />
presentation to the<br />
<strong>CMMI</strong> SM <strong>Technology</strong> Conference<br />
and User Group<br />
Denver, CO<br />
November 12, 2002<br />
EPIC Advanced Systems Group<br />
Engineering Performance Improvement Center<br />
Jeffrey L. Dutton<br />
Technical Director<br />
Engineering Performance Improvement Center<br />
<strong>CMMI</strong> Tech Conf & User Group<br />
1<br />
3/05/00
What is NOT Included<br />
• Selection of quality model (<strong>CMMI</strong>, ISO,<br />
etc.)<br />
• Selection of <strong>CMMI</strong> model(s) or<br />
approaches<br />
– Domain models<br />
– TSP, PSP<br />
– Staged or continuous representations<br />
EPIC Advanced Systems Group<br />
Engineering Performance Improvement Center<br />
<strong>CMMI</strong> Tech Conf & User Group<br />
2<br />
3/05/00
What IS Included<br />
• Basic decision process for <strong>CMMI</strong> investment<br />
• Importance of quality or performance goals<br />
• Understanding of Value Domains<br />
• Understanding of Contract Types<br />
• Calculation of Return on Investment<br />
Presentation is based on Paper which is<br />
available in Conference Proceedings.<br />
EPIC Advanced Systems Group<br />
Engineering Performance Improvement Center<br />
<strong>CMMI</strong> Tech Conf & User Group<br />
3<br />
3/05/00
Basic Decision Process<br />
Specify<br />
Organizational<br />
Quality and<br />
Performance<br />
Goals<br />
Decide which<br />
engineering<br />
quality model<br />
is appropriate<br />
Plan structure<br />
and content of<br />
potential <strong>CMMI</strong><br />
Program<br />
Identify level<br />
of investment<br />
necessary to<br />
achieve <strong>CMMI</strong><br />
compliance<br />
Estimate multiyear<br />
ROI for<br />
type of contract<br />
expected<br />
Is Is ROI<br />
Sufficient?<br />
No<br />
Yes<br />
Consider<br />
Investment<br />
EPIC Advanced Systems Group<br />
Engineering Performance Improvement Center<br />
<strong>CMMI</strong> Tech Conf & User Group<br />
4<br />
3/05/00
Importance of Quality or Performance Goals<br />
(For equal levels of investment)<br />
Estimated ROI<br />
Sharp focus on organizational<br />
performance and quality goals<br />
Break-Even Line<br />
Opportunity Space<br />
Little or no focus on organizational<br />
performance and quality goals<br />
Level 2 Level 3 Level 4 Level 5<br />
Focus on Organizational Performance<br />
and Quality Goals<br />
EPIC Advanced Systems Group<br />
Engineering Performance Improvement Center<br />
<strong>CMMI</strong> Tech Conf & User Group<br />
5<br />
3/05/00
Value Domains<br />
Life Cycle<br />
Marketing<br />
Intrinsic<br />
Value<br />
Increased productivity, reduced<br />
time to market, higher product<br />
quality, reduced costs<br />
"Level 3 requirement", customer<br />
perception of schedule and cost<br />
predictability<br />
Responsive infrastructure, highly<br />
knowledgeable employees<br />
EPIC Advanced Systems Group<br />
Engineering Performance Improvement Center<br />
<strong>CMMI</strong> Tech Conf & User Group<br />
6<br />
3/05/00
Value Relationship to Contract Types<br />
3/05/00<br />
7<br />
Perceived Value<br />
FFP/Commercial<br />
Cost Plus Award Fee<br />
Time and Materials<br />
FFP/Commercial<br />
Cost Plus Award Fee<br />
Time and Materials<br />
FFP/Commercial<br />
Cost Plus Award Fee<br />
Time and Materials<br />
Life Cycle Marketing Intrinsic<br />
EPIC Advanced Systems Group<br />
Engineering Performance Improvement Center<br />
<strong>CMMI</strong> Tech Conf & User Group
Introduction to Life Cycle ROI<br />
• “Traditional” presentation of<br />
CMM/<strong>CMMI</strong> ROI<br />
– SEI data analysis<br />
– Data and Analysis Center for Software<br />
• Includes:<br />
– Productivity gains<br />
– Reduction in cycle time<br />
– Reduction in post-release defects<br />
– Reduction in calendar time<br />
EPIC Advanced Systems Group<br />
Engineering Performance Improvement Center<br />
<strong>CMMI</strong> Tech Conf & User Group<br />
8<br />
3/05/00
Life Cycle ROI<br />
FFP/Comm.<br />
Cost Plus<br />
T&M<br />
Relative ROI<br />
• 9 – 67% increase<br />
In productivity<br />
• 15 – 23% cycle time<br />
reduction<br />
• 10 – 94% reduction<br />
in latent defects<br />
• Life cycle ROI of<br />
400 to 800%<br />
Life Cycle Marketing Intrinsic Value<br />
EPIC Advanced Systems Group<br />
Engineering Performance Improvement Center<br />
<strong>CMMI</strong> Tech Conf & User Group<br />
9<br />
3/05/00
Introduction to Marketing ROI<br />
• Increased number of opportunities<br />
– <strong>CMMI</strong> “compliance gate”<br />
– Efforts where CMM/<strong>CMMI</strong> compliance is rewarded<br />
– Compliance in specific domains<br />
• Increased probability of win<br />
– Schedule predictability and adherence<br />
– Improved quality<br />
– Reduced costs<br />
– Faster time to completion<br />
EPIC Advanced Systems Group<br />
Engineering Performance Improvement Center<br />
<strong>CMMI</strong> Tech Conf & User Group<br />
10<br />
3/05/00
Marketing ROI<br />
Relative ROI<br />
FFP/Comm.<br />
Cost Plus<br />
T&M<br />
Approx. 150%<br />
ROI based on<br />
business case<br />
estimates<br />
Life Cycle Marketing Intrinsic Value<br />
E.G.: P(WIN)<br />
IS 80%,<br />
Contribution of<br />
<strong>CMMI</strong><br />
compliance<br />
est. at 25%.<br />
After win, 32%<br />
of contract<br />
profit attrib.<br />
to <strong>CMMI</strong><br />
Compliance.<br />
EPIC Advanced Systems Group<br />
Engineering Performance Improvement Center<br />
<strong>CMMI</strong> Tech Conf & User Group<br />
11<br />
3/05/00
Intrinsic Value<br />
Visioning & Leadership<br />
Marketing &<br />
Business Dev.<br />
Knowledge Mgt.<br />
& Dissemination<br />
Mission Processes<br />
& Technologies<br />
Quality<br />
Assurance<br />
Information<br />
Management<br />
Human<br />
Resources<br />
Process<br />
Engineering<br />
Financial<br />
Operations<br />
Technical<br />
Operations<br />
EPIC Advanced Systems Group<br />
Engineering Performance Improvement Center<br />
<strong>CMMI</strong> Tech Conf & User Group<br />
12<br />
3/05/00
Intrinsic ROI<br />
Relative ROI<br />
• Reduced turnover<br />
measurable<br />
• Contributions to marketing<br />
and engineering performance<br />
FFP/Comm.<br />
Cost Plus<br />
T&M<br />
Life Cycle Marketing Intrinsic Value<br />
EPIC Advanced Systems Group<br />
Engineering Performance Improvement Center<br />
<strong>CMMI</strong> Tech Conf & User Group<br />
13<br />
3/05/00
Calculation of Final ROI<br />
• Actuarial plan needed<br />
– Investment amortized over time frame<br />
– Life cycle, marketing, and intrinsic ROI applied to<br />
appropriate phase<br />
• Calculate individual ROI<br />
• Apply against investment across time frame<br />
• Sum ROI from all Value Domains across time frame<br />
EPIC Advanced Systems Group<br />
Engineering Performance Improvement Center<br />
<strong>CMMI</strong> Tech Conf & User Group<br />
14<br />
3/05/00
Sample “Bottom Line” Investment vs ROI<br />
FFP Software Contract<br />
CPAF Systems Engr. Contract<br />
Dollars<br />
<strong>CMMI</strong> Investment<br />
Marketing ROI<br />
Life cycle ROI<br />
Reduced Turn-Over<br />
Year 1 Year 2 Year 3 Year 4 Year 5<br />
EPIC Advanced Systems Group<br />
Engineering Performance Improvement Center<br />
<strong>CMMI</strong> Tech Conf & User Group<br />
15<br />
3/05/00
Change language