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- Dave Walden
- General Dynamics
- Advanced Information Systems
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2
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- Why Perform a Business Case?
- Business Case Process
- Key Considerations
- Business Drivers/Inputs
- Costs
- Benefits
- Outputs
- Business Case Lessons Learned
- Summary and Conclusions
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3
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- Do our process improvement goals make sense from a business perspective?
- What is the benefit of being “assessed at” a level vs. “operating at” a
level?
- What is the benefit of moving from CMM/CMMI Level m to Level n?
- What is the relative return on the SW CMM vs. the CMMI?
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4
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- Collaborative team effort to:
- Identify business drivers and inputs
- Define alternative scenarios
- Identify costs of scenarios
- Identify benefits of scenarios
- Evaluate results
- Prepare presentations
- Benefits structured around a Balanced Scorecard
- Organizational and industry data applied where appropriate and available
- Output is team consensus
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5
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- Just maintaining a CMM/CMMI level requires investment
- Benefits result from operating at an improved level of maturity, not
from just getting there
- Some benefits may not be financial, but can still can be “valued”
- Weaknesses at lower levels of maturity increase risk and cost of
achieving higher levels of maturity
- Attractiveness of alternatives depends on actions of current and
potential competitors and customers
- Costs and benefits must be determined separately for each scenario
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6
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- External Factors
- Table Stakes
- Marketplace Competitiveness
- Industry Standards Superceded
- ISO 9001:1994 to :2000 (Dec 2003)
- SEI SW CMM to CMMI (Dec 2003)
- Competition
- Customer Expectations and Satisfaction
- Internal Factors
- Enabler to Meet Company Financial Commitments
- productivity
- delivery/ performance
- quality
- Support Projected Growth Objectives
- Company Integration
- Internal Customer Satisfaction
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7
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- Each business unit answered the following questions:
- 1. What are the major business areas involving engineering?
- 2. What types of contract vehicles are used?
- 3. How much engineering development and support activity goes on?
- 4. How much new business opportunity depends on engineering?
- 5. What are the current levels of performance?
- 6. What is the current level of employee satisfaction?
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8
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- Candidates depend on where you are and where you want to go. Some options:
- Do not invest -- agree to regress
- Maintain existing CMM/CMMI levels
- Advance to SW CMM Level n [operating at, assessed at]
- Advance to CMMI Level n [operating at, assessed at]
- Others? (e.g., ISO 9001:2000, 14000, 18000)
- Select scenarios carefully
- Determines the magnitude of the business case task
- Determines the presentable outputs
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9
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- Process improvement activities
- SEPG, EPG, CMM, CMMI, etc.
- CMM/CMMI External Assessments
- External assessment team (both fees & costs)
- Internal assessment participants
- Training
- Ongoing development, delivery, and maintenance
- Project Impact
- Cost of adopting on projects
- Management Attention
- Involvement and participation
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10
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11
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12
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- Financial performance
- Profits ®Adjust Current
Margin
- Sales/Market Share ®
Increased Probability of Win
- Customer
- Cost/Schedule Performance ®
Increased Predictability
- Internal Business Processes
- Productivity ® Increased
Productivity
- Quality ® Decreased Delivered
Defects
- Cycle Time ® Decreased
Elapsed Time
- Learning and growth
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13
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14
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15
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16
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- Financial return based on costs and benefits converted into a series of
annual cash flows
- Annualized Return on Investment (ROI)
- Net Present Value (NPV)
- Internal Rate of Return (IRR)
- Calculated for each scenario of interest
- Operating At
- Assessed At
- CMM vs CMMI
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17
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- Business case process from the SPC was invaluable
- Take the time to provide solid inputs and cost estimates
- Inputs from the LRSP and SBUs take time and effort
- Industry expert from the SPC was key
- Team consensus and organizational buy-in critical
- Use a conservative benefits model with a Balanced Scorecard approach
- Leverage industry data for SW CMM, derate some factors
- Estimate conservative CMMI improvements over SW CMM
- Delete questionable benefits factors
- Derate the realized benefits (e.g., 25%, 50%, 100% by year)
- Work with the intended audience in advance
- Senior leadership
- Don’t neglect Finance
- Use concise presentation material, be flexible
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18
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- GDAIS used a business case to validate our process improvement goals
from a business perspective
- GDAIS partnered with the SPC to produce the business case
- The business case was a success
- Allowed all the key questions to be answered
- Showed positive returns
- Was accepted by the senior leadership team
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