2. “Look, who is the most successful in attracting and holding good people? The nonprofits. The satisfaction has to be greater than in business because there is no paycheck.” Peter Drucker

3. “In addition to working with very large projects, however, we have found that the same methods are effective for smaller groups. In fact, in simplified form, they are even helpful for individual programmers. That, of course, is the key. If our methods do not serve the individual professionals, they will not endure.” Watts Humphrey

4. Watts Humphrey profiled in issue of December 6, 1999

5. Aligning Measurements To Strategy In A Small/Medium Enterprise Presentation - European SEPG 2000 June 7, 2000

6. Characteristics Of Successful Companies High quality products and services Motivated and skilled employees Responsive and predictable internal processes Satisfied and loyal customers

7. Characteristics Of Excellent Software Companies Products delivered on time with zero defects 90 to 95% of all defects detected early Most defects happen once (Defects are prevented) Employees’ goals aligned with business goals Have line of sight to company objectives Know excellent practices and use them Continuously improving internal processes Cost of quality is less than 5% Productivity doubles every 3 to 5 years Mature, defined, and measured processes Delighted customers

8. AIS Software Process Improvement A Tale of 3 Eras Without a model 1986 - 1992 Using the Capability Maturity Model (CMM ® ) 1992 - 1995 Using CMM and Personal Software Process (PSP ® ) 1996 - 1999

9. AIS Predictable Results for Schedule

10. AIS Predictable Results for Effort

11. AIS Predictable Results for Acceptance Test

12. AIS Time Spent in System Test

13. Strategic Impact of SPI Creating value for customers –On time delivery –Defect free delivery Enhanced organizational capabilities –Optimizing processes –Trained workforce Future financial performance enabled by –High quality products and services –Satisfied and loyal customers –New businesses driven by core competencies

14. SPI Issues Employee turnover –Core competencies walking out the door everyday at close of business with no guarantee of coming back Holding the gains –New technology, applications domain –Need to communicate strategic relevance to entire organization –Need to align individual goals with business, SPI goals Core metrics tracked –Schedule, effort, defects, PIPs along with investment in SEPG, SQA, SCM,and process training –Performance drivers not connected explicitly to core outcomes represented by financial measures

15. Business Strategy Strategy: Hypotheses about cause and effect If employees are motivated, skilled, and committed to excellence They will continually improve the AIS software process They will deliver products on time with few or no defects Customers will be delighted

16. Translating Strategy Into Operational Terms Financial “To succeed financially, How should we appear to our shareholders?” Internal Business Process “To satisfy our shareholders And customers, what business Process must we excel at?” Learning and Growth “ To achieve our vision, how Will we sustain our ability to Change and improve?” Customer “To achieve our vision, How should we appear To our customers?” Vision And Strategy Source: The Balanced Scorecard, Kaplan & Norton, Harvard Business School Press

17. AIS Balanced Scorecard

18. Products Delivered On Time With Zero Defects Strategic Objective: Engineers achieve the highest possible quality in the design, code phases of a component, module or program Core Outcome: Components, modules, programs with zero integration test defects Performance Driver: Components with target percent of defects removed before compile and test

19. Products Delivered On Time With Zero Defects 1998 – 1999 Number of components delivered 215 Number with zero integration defects 134

20. “When managers insist that their professional employees rigorously apply the recognized disciplines of their fields, they will do better work.” Watts Humphrey

21. Goals Influence Behavior Goal 1: Reduce test defects / KLOC Plan for A/FR between 1.5 and 2 Goal 2: Increase effectiveness of design and code reviews Plan for reviews of 100 – 150 LOC/Hour Goal 3: Increase process yield Plan for yields greater than 80%

22. Reduce Test Defects/KLOC

23. Increase Process Yield

24. Plan For A/FR Between 1.5 and 2

25. Quality Is Free

26. Continuously Improving Internal Processes Strategic Objective: AIS organization defined process is continuously improved Core Outcome: New products or product enhancements with documented quality better than its predecessor Performance Driver: Process Improvement Proposals (PIPs) submitted and implemented

27. Continuously Improving Internal Processes 1998 – 1999 Process Improvement Proposals (PIPs) Number of PIPs Submitted341 Number of PIPs Implemented254 PIPs to improve quality159 PIPs to reduce cycle time 53 PIPs to reduce risk 42

28. Employees’ Goals Aligned With Business Goals Strategic Objective: Investment in people, process, technology enables achievement of customer, employee, and shareholder satisfaction goals Core Outcome: Engineers improve productivity continuously Performance Driver: Engineers use the Personal Software Process

29. Connecting Business Objectives to Career Goals Balanced Scorecard (BSC) Strategic Objectives Financial Customer Employee Internal Bus. Proc. Learning & Growth Individual BA&A Goals Development Staffing Plan for BA&A Training Director Plan Position Knowledge & Skills Broadening Assignments & Activities Individual Training Goals Position Description BSC Position Objectives Position Accountability Employee Job Questionnaire Professionalism Accountability Position Attributes Improvement Goals/ Summary Rating Measurement of Core Outcomes & Performance Drivers Self Evaluation & Feedback Future: Individual Career Plan

30. Way Out Of Software Hell Products delivered on time with zero defects 90 to 95% of all defects detected early Most defects happen once (Defects are prevented) Employees’ goals aligned to business goals Have line of sight to company objectives Know excellent practices and use them Continuously improving internal processes Cost of quality is less than 5% Productivity doubles every 3 to 5 years Mature, defined, and measured processes Delighted customers CMM- Builds organizational capability TSP- Builds quality products on cost and schedule PSP- Builds individual skill and discipline

31. Contact Information Girish V. Seshagiri CEO Advanced Information Services Inc. Co-founder The Watts Humphrey Software Quality Institute Websites:www.advinfo.netwww.watts-sqi.orgwww.advinfo.netwww.watts-sqi.org E-mail:girish@advinfo.net