1. 11 April 2007 CMM vs. ISO David S. Craft CIRM, PMP

2. 11 April 2007 CMM vs. ISO, Sarbanes Oxley Agenda Who Am I Software Systems Development ISO CMM Sarbanes Oxley

3. 11 April 2007 CMM vs. ISO, Sarbanes Oxley Who Am I VISTA Volunteer Industrial Engineer Chief Industrial Engineer Manager Production Planning & Control Inventory Control Manager Shift Supervisor Materials Manager Consultant Project Manager Team Leader Managing Consultant, Engineering and Manufacturing Services Internal ISO Auditor

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5. 11 April 2007 CMM vs. ISO, Sarbanes Oxley Process To Develop Software and Systems You Need A Process Anything goes Defined Structured

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8. 11 April 2007 CMM vs. ISO, Sarbanes Oxley Process, people and technology are the major determinants of project cost, quality and schedule.

9. 11 April 2007 CMM vs. ISO, Sarbanes Oxley Common Misconceptions I don’t need defined processes I have: – Really good people – Advanced Technology – An experienced manager Defined Processes: – Interfere with creativity – Equals bureaucracy + regimentation – Isn’t needed when building prototypes – Is only useful on large projects – Hinders agility in fast moving projects – Costs too much

10. 11 April 2007 CMM vs. ISO, Sarbanes Oxley Why We Need Standard Processes Estimating (History) Scope Cost Time Tools Deliver the Product to Estimate (Visibility) Time Cost Quality Handling/Controlling Changes Planned Unplanned Scope Creep

11. 11 April 2007 CMM vs. ISO, Sarbanes Oxley How to Achieve Quality Processes ISO CMM

12. 11 April 2007 CMM vs. ISO, Sarbanes Oxley ISO – CMM Differences ISO9001:2000CMMI-DEV International standard, applies to all types of organizations, supports both product and service oriented organizations Written specifically for software development companies A brief document – about 25 pages long, identifying the minimal requirements for a quality system A detailed document – over 500 pages long Emphasizes on a management of continuous improvement process, based on the PDCA (Plan-Do-Check- Act) model Emphasizes on achieving “maturity” and improving its process continuously One level of standard. The standard is based on recommendation Defines 5 maturity levels of the organization, covering 25 process areas (PAs) Netta Dotan, Quality Assurance & project management, Ronkal Office Technologies

13. 11 April 2007 CMM vs. ISO, Sarbanes Oxley ISO – CMM Differences – My View ISO 9000SW-CMMI Outwardly focusedInwardly focused Minimum requirements with implied continuous improvements Explicit continuous quality improvement Registration DocumentNo documentation Certification audit for a 50 employee organization will be executed by 1 -12 auditors during one day Certification audit for a 50 employee organization will be executed by 4 auditors during 4-5 days Netta Dotan, Quality Assurance & project management, Ronkal Office Technologies

14. 11 April 2007 CMM vs. ISO, Sarbanes Oxley Both require the organization be explicit about what their processes and quality systems are Say what you do; do what you say The organization records and tracks data for objective analysis Require strong management support to succeed Provide a structured and measured approach to quality improvement Require an outside audit for “certification” Both are refined/improved over time ISO – CMM Similarities

15. 11 April 2007 CMM vs. ISO, Sarbanes Oxley Meet ISO The International Organization for Standardization (ISO) is a worldwide federation of national standards bodies from some 162 countries, representing approximately 95% of worldwide production. ISO is a non- governmental organization established in 1947 to promote the development of standardization and related activities in the world with a view to facilitating international exchange of goods and services and development of cooperation in the spheres of intellectual, scientific, technological and economic activity ISO (International Organization for Standardization) is the world's largest developer and publisher of International Standards. ISO is a non-governmental organization that forms a bridge between the public and private sectors. On the one hand, many of its member institutes are part of the governmental structure of their countries, or are mandated by their government. On the other hand, other members have their roots uniquely in the private sector, having been set up by national partnerships of industry associations. Therefore, ISO enables a consensus to be reached on solutions that meet both the requirements of business and the broader needs of society.

16. 11 April 2007 CMM vs. ISO, Sarbanes Oxley ISO’s Impact In the global economy ISO 9001:2000 and ISO 14001:2004 have become thoroughly integrated with the world economy. ISO 9001:2000 is now firmly established as the globally accepted standard for providing assurance about the quality of goods and services in supplier- customer relations. The positive roles played in globalization by ISO’s standards for quality and environmental management systems include the following: a unifying base for global businesses and supply chains – such as the automotive and oil and gas sectors a technical support for regulation – as, for example, in the medical devices sector a tool for major new economic players to increase their participation in global supply chains, in export trade and in business process outsourcing; a tool for regional integration – as shown by their adoption by new or potential members of the European Union In the rise of services in the global economy – nearly 33 % of ISO 9001:2000 certificates in 2005 went to organizations in the service sectors.

17. 11 April 2007 CMM vs. ISO, Sarbanes Oxley SectorStandardsPages Generalities, Infrastructure and Sciences1,60164,568 Health, Safety and Environment73429,491 Engineering Technologies4,937223,394 Electronics, Information Technology and Telecommunications 2,902506,057 Transport and Distribution of Goods1,95755,646 Agriculture and Food Technology1,05426,286 Materials Technology4,373114,269 Construction38014,632 Special Technologies1453,602 Total18,083737,345 Where are the Standards (12/31/09)

18. 11 April 2007 CMM vs. ISO, Sarbanes Oxley What are standards? Standards are documented agreements containing technical specifications or other precise criteria to be used consistently as rules, guidelines, or definitions of characteristics, to ensure that materials, products, processes and services are fit for their purpose. For example, the format of the credit cards, phone cards, and "smart" cards that have become commonplace is derived from an ISO International Standard. Adhering to the standard, which defines such features as an optimal thickness (0,76 mm), means that the cards can be used worldwide. International Standards thus contribute to making life simpler, and to increasing the reliability and effectiveness of the goods and services we use. Last modified 2002-07-17

19. 11 April 2007 CMM vs. ISO, Sarbanes Oxley ISO 9000 represents consensus on what requirements a quality system must meet but does no dictate how they should be met. The ISO 9000 series addresses quality management and quality assurance standards. It is designed to assist organizations in implementing and operating an effective quality management system (QMS). ISO 9001 defines what quality standards should be followed. It does not tell how. The ISO 9000:2000 series is based on 8 key principles: Customer Focus, Leadership, Involvement of People, Process Approach, System Approach to Management, Continual improvement, Factual Approach to Decision Making and Mutually Beneficial Supplier Relationships Which ISO Standards

20. 11 April 2007 CMM vs. ISO, Sarbanes Oxley Quality System Documentation QualityManual Level 1 Defines Approach and Responsibility Procedures Level 2 Defines Who, What, When Work/JobInstructions Level 3 Answers How Records/Documentation Level 4 Results: shows that the system is operating

21. 11 April 2007 CMM vs. ISO, Sarbanes Oxley ISO 9001:2000 Structure 4.Quality Management System 4.1 General requirements 4.2 Document requirements 5. Management Responsibility 5.1 Management commitment 5.2 Customer focus 5.3 Quality policy 5.4 Planning 5.5 Responsibility, authority, communication 5.6 Management review 6.Resource Management 6.1 Provision of resources 6.2 Human resources 6.3 Infrastructure 6.4 Work environment 7.Product realization 7.1 Planning of product realization 7.2 Customer-related processes 7.3 Design and development 7.4 Purchasing 7.5 Production and service provision 7.6 Control of monitoring and measuring devices 8.Measurement, Analysis & Improvement 8.1 General 8.2 Monitoring and measurement 8.3 Control of nonconforming product 8.4 Analysis of data 8.5 Improvement

22. 11 April 2007 CMM vs. ISO, Sarbanes Oxley Evaluation ISO is a certification model. Typically, an internal quality system assessment (audit) is performed, repairs made and the organization may then submit to a formal system audit lasting for several days performed by one of the ISO certification Bodies. The certificate usually is valid for three years and also requires that a system of Quality Management be in place, including performance of regular internal audits and intermediate external audits.

23. 11 April 2007 CMM vs. ISO, Sarbanes Oxley Meet CMMI CMMI® (Capability Maturity Model® Integration) models are collections of best practices that help organizations to improve their processes. These models are developed by product teams with members from industry, government, and the Software Engineering Institute (SEI). These models provides a comprehensive integrated set of guidelines for developing products and services. The CMMI-DEV model provides guidance for applying CMMI best practices in a development organization. Best practices in the model focus on activities for developing quality products and services to meet the needs of customers and end users. Other CMMI models: Acquisition and Services

24. 11 April 2007 CMM vs. ISO, Sarbanes Oxley Scope of CMMI CMMI is designed to help identify and prioritize process improvement opportunities and facilitate organizational change management. The model is used for internal process improvement, sourcing selection and benchmarking, rather than certification CMMI is organized as a process framework that cluster related practices into process areas that, when performed collectively, satisfy a set of goals. It requires that you define specific practices to meet specific goals but does not define how they are to be implemented. The CMMI provides two representations – staged and continuous. The staged view provides five maturity levels: Initial, Managed, Defined, Quantitatively Managed, and Optimizing and 22 process areas PAs). The PAs at each maturity level build on the previous level. Alternatively, continuous representation is used to focus on a process capability in a desired functional area (project management, process management, engineering and support) rather that maturity levels.

25. 11 April 2007 CMM vs. ISO, Sarbanes Oxley Evaluation This is not a certification model, but ratings may be announced and published. The SEI publishes ratings provided the company gives it permission. Formal appraisals are typically 5 – 10 days and led by SEI- authorized internal or external lead appraisers, using trained teams and a formal methods. The method is named SCAMPI (Standard CMMI Appraisal Method for Process Improvement).

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27. 11 April 2007 CMM vs. ISO, Sarbanes Oxley SCAMPI – Standard CMMI Appraisal Method for Process Improvement

28. 11 April 2007 CMM vs. ISO, Sarbanes Oxley Process Areas Requirements ManagementOrganizational Process Definition Project PlanningOrganizational Training Project Monitoring & ControlIntegrated Project Management Supplier Agreement ManagementRisk Management Measurement & AnalysisIntegrated Teaming Process & Product Quality Assurance Integrated Supplier Management Configuration ManagementDecision Analysis & Resolution Requirements DevelopmentOrganizational Environment for Integration Technical SolutionOrganizational Process Performance Product IntegrationQuantitative Project Management VerificationOrganizational Innovation & Deployment ValidationCausal Analysis & Resolution Organizational Process Focus

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30. 11 April 2007 CMM vs. ISO, Sarbanes Oxley EIA – Electronic Industries Alliance Interim Standard

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40. 11 April 2007 CMM vs. ISO, Sarbanes Oxley StagedProcess AreaContinuous L2Requirements ManagementEngineering L2Project PlanningProject Mgmt L2Project Monitoring and ControlProject Mgmt L2Supplier Agreement ManagementProject Mgmt L2Measurement and AnalysisSupport L2Process and Product Quality AssuranceSupport L2Configuration ManagementSupport L3Requirements DevelopmentEngineering L3Technical SolutionEngineering L3Product IntegrationEngineering L3VerificationEngineering L3ValidationEngineering L3Organizational Process FocusProcess Mgmt. L3Organizational Process DefinitionProcess Mgmt. L3Organizational TrainingProcess Mgmt. L3Integrated Project ManagementProject Mgmt L3Risk ManagementProject Mgmt L3Integrated TeamingProject Mgmt L3Integrated Supplier ManagementProject Mgmt L3Decision Analysis and ResolutionSupport L3Organizational Environment for IntegrationSupport L4Organizational Process PerformanceProcess Mgmt. L4Quantitative Project ManagementProject Mgmt L5Organizational Innovation and DeploymentProcess Mgmt. L5Causal Analysis and ResolutionSupport CMM Process Areas

41. 11 April 2007 CMM vs. ISO, Sarbanes Oxley Examples of CMMI Impact: ROI 5:1 ROI for quality activities (Accenture) 13:1 ROI calculated as defects avoided per hour spent in training and defect prevention (Northrop Grumman Defense Enterprise Systems) Avoided $3.72 M in costs due to better cost performance (Raytheon North Texas Software Engineering) as the organization improved from SW-CMM level 4 to CMMI level 5 2:1 ROI over 3 years (Siemens Information Systems Ltd, India) 2.5:1 ROI over 12st year, with benefits amortized over less than 6 months (reported under non disclosure) (reported by the American Society for Quality)

42. 11 April 2007 CMM vs. ISO, Sarbanes Oxley Sarbanes-Oxley Implications With its more than 300 discrete points of enforceable law, this is the most significant piece of account legislation passed since the formation of the SEC in 1933 SOX was passed with the specific intent of increasing accountability and attempting to install ethical behavior in financial reporting and business operations. With this increase spotlight on reporting, companies must invest resources and focus into their internal control process The Act created the Public Company Accounting Oversight Board (PCAOB) to oversee the activities of the auditing profession and mandated reforms to enhance corporate and criminal fraud accountability. A goal of SOX legislation is to continually improve the transparency of financial and business events that can impact the accuracy and future validity of financial statements. Projects to improve processes and regular review of controls will become common-place activities as compliance evolves. Tools that simplify project completion and track status will better enable organization to cost- effectively undertake these projects.

43. 11 April 2007 CMM vs. ISO, Sarbanes Oxley SOX Major Section 302 – Corporate Responsibility for Financial Reports Requires Executives to certify the accuracy of corporate financial reports 404 – Management Assessment of Internal Controls Requires executives and auditors to confirm the effectiveness of internal controls for financial reporting 409 – Real Time Issuers Disclose Requires any material changes in financial state of issuer be communicated quickly and with supporting data to the public

44. 11 April 2007 CMM vs. ISO, Sarbanes Oxley Implications for IT Configuration management is now a must Change controls must be handled more carefully Security, security, security All system changes must be verifiable by a clear audit trail Reduce reliance on batch processing, update data warehouse more frequently Interfaces from any financial system must be documented and controlled IT activities must be aligned with the company’s governance and risk policies