Tips for Leveraging Process Optimization (CMMISM ML 5)with Strategic Planning

Dr. Mary Anne HerndonScience Applications International Corporation (SAIC)November, 2004

CMM, Capability Maturity Model, and Capability Maturity Modeling and SCAMPI areregistered in the U.S. Patent and Trademark Office.

2

0246810

1214161820

A B C D E F G H I J K L M N O P

Strategic Planning Question:

“ Where are we now and where do we need to be to achieve ourfuture performance goals?”

Issues & Concerns

Key Process Performance

1. What are the performance ranges can we expect from ourexisting key processes?

2. What resources do we need to “improve” our performancerange to achieve future performance goals?

3. How much can we afford/must to invest to achieve our improvements?

4. What is our multi-stage campaign to implement our improvements?

3

� Strategic Planning Overview:

- Key Factors Across the Organization -

Quality

Cash Flow Revenue

Profit

Cash Flow

Enterprise Efficiency

Rework(Scrap)

AssetsInvestments Market share

� Balancing of the investment versus potential profit of achieving performance goals

Investment Profit

4

� Keys to leveraging equityinclude:

� Inventory organization’s existingmanagement practices.

� Gain an “early” quantitative understandingof existing key processes performanceacross the organization.

� Set effectiveness goals for ALL of theorganization (including SE/SI/SW technicalservices).

� Apply the CMMI model practices andSCAMPISM appraisal methods as acommon framework to implement theeffectiveness goals across theorganization.

� Challenge: How do we leverage existingprocess performance equity during strategicplanning?

5

The team uses thePEP baseline to planand launch pilotprojects across theorganization andleverage the transfer oftechnology usingexisting processassets.

CAR, DAR, IT, IPM,OID, OPP, OT, PMC,PP, PPQA, QPM,RSKM

3. Prioritize andScheduleOrganizationalRe-alignment Targets

The team conducts aninventory to establishthe baseline of theProcess Equity Profile(PEP) containing thecurrent equity levels ofprocess assets acrossthe organization.

M&A, IPM, OEI, OID,OPD, OPF, OPP, PP,PMC, PPQA, RSKM

2. Maintain theOrganization’sUnderstanding ofCurrentInformational Needs

Develop a teamcharter, analyze futureinformation needs anddevelop appropriatekey measurements.

CAR, DAR, IPM, M&A,IT, OEI, OID, OPD,OPF,OT, PPQA, RD,RM, RSKM

1. Develop StrategicProcess ImprovementPlan with DefinedKey ProcessPerformance Goals

� FocusMajor Process Areas(PAs)

� Tip

Overview: Three Tips for Leveraging Process Optimization Viathe CMMI with Strategic Planning

6

IT, M&A, OIE, OPD, OPF, PPQAPlan for Sarbanes-Oxley compliance.

CAR, DAR, IT, OID, OIE, OPP, OTPerform competency-based forecast.

CAR, DAR, IT, M&A, OID, OPP, OPD,OT

Perform investment (technology)analysis.

IT, M&A, OID, OIE, OPP, OTDevelop multi-year performance goalsand leading indicators.

M&A, OPP, QPM, RDDevelop Process Equity Profile baselineto document existing infrastructure andaccount performance analysis.

DAR, IPM, OEI, OPD, OPF, PPQA,RD, RM

Develop governance processes.

Major CMMI Process Areas*(PAs)

� Key Planning Activity

Tip 1: Develop Strategic Process Improvement Plan with DefinedKey Process Performance Goals

*Capability Level (CL) 3 implementation highly recommended.

7

PP, RSKMPrepare risk management plan,emphasizing mitigation activities,schedules and costs.

CAR, M&A, OEI, OID, OPD, OPF, OT,PP, PMC, RD, RM, RSKM

Develop gap analysis report and staffpilot projects to implement action plans.

IT, M&A, OPD, OPF, OIE, RMPopulate PEP by inventorying existingpolicies, guidance and processdescriptions for infrastructure servicesand line organizations.

M&A, OPD, OPF, OT, PMC, PPQAInventory current leading businessindicators collected, reported andanalyzed for infrastructure services andprofit/loss centers.

Major CMMI Process Areas*(PAs)

� Key Planning Activity

*Capability Level (CL) 3 implementation highly recommended.

Tip 2: Maintain the Organization’s Understanding of CurrentInformational Needs

8

0102030405060708090

100

Services Account 1 Account 2 Account 3

RevenueProfitEfficiencyQuality

0102030405060708090

100

Services Account 1 Account 2 Account 3

RevenueProfitEfficiencyQuality

0

2

4

6

8

10

12

14

16

18

20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

0

2

4

6

8

10

12

14

16

18

20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Process Equity Profile for Infrastructure and Three Accounts forFour Leading Indicator Categories

Per

cent

of P

erfo

rman

ce G

oals

Ach

ieve

d

- Current -

- Forecast -

LeadingIndicatorCategory*

LeadingIndicatorCategory*

* Revenue and profit N/A for services

9

17% 45% 33%

Major Accounts

Infrastructure

Finance ProgramControl Contracts HR

Organizational ProcessEquity Inventory

Legend(% gaps)

20%

30%

40%

GapAnalysisReport

10

Tip 3: Prioritize and Schedule Organizational Re-alignmentTargets

M&A, PPQAImplement objective evaluation ofdeployment campaigns.

M&A, OPP, PMCConduct executive periodic reviews ofdeployment campaigns.

CAR, DAR, IPM, M&A, OID, OPP, OT,PP, PMC, QPM, RSKM

Plan the deployment campaigns oftechnologies from “effective” pilotprojects across the organization.

Major CMMI Process Areas*(PAs)

� Key Planning Activity

*Capability Level (CL) 3 implementation highly recommended.

11

� Planning the Outreach Campaign

- Key Factors Across the Organization -

Quality

Cash Flow Revenue

Profit

Cash Flow

Enterprise Efficiency

Rework(Scrap)

AssetsInvestments Market share

� Balancing of the investment versus potential profit of achieving performance goals

Investment Profit

12

Three Stage Outreach Campaign

Stage Activities

1. Resource multi-year outreach campaign Account analysisMulti-year performance goalsInvestment (technology) analysisStaff training & resourcesSarbanes-Oxley (SOX)

2. Resource & implement tactical plans Identify pilot projectsTransfer technologiesAssess investmentsReview & replan

3. Outreach campaign completion Lessons LearnedOutreach Campaign Effectiveness(quality, revenue, profit, customersatisfaction, efficiency)

� Optimize Performance Intelligently across the Organization

13

Stage 1:ResourceOutreachCampaign

� Plan for internal audits ofstandard processes.

� Compliance with Sarbanes-Oxley (SOX).

� Perform trade study of CMMI,ISO 9000, People CMM, Six Sigma,etc. for key customer accounts.

� Select process improvementmodels.

� Identify human resourceimprovements (recruiting andretention) and technology infusions;equity plan for building cadre ofexpertise.

� Focus on investments inimproving human resources.

� Perform technology analysis bycustomer accounts; participant intechnology thrusts via academia oracquisitions.

� Evaluate best methods to investin emerging technologies andstandards.

� Forecast growth goals bycustomer accounts and projectedbudgets.

� Set realistic multi-yearperformance goals.

� Focus on profit/loss centers forkey customer accounts.

� Understand business forecasts.

� Major Activities� Key Planning Challenges