© Copyright QinetiQ limited 2007 Open innovation – A paradigm shift in defence project management? Ryan Hood QinetiQ Technology Leader 03 October 2007

QinetiQ Proprietary © Copyright QinetiQ limited Overview 01 Project management and system development 02 Open innovation 03 Cisco and Lucent (and Bell Labs) 04 Analogy with Defence? 05 Innovation and projects 06 Agile project management, agile development 07 Boehm’s spiral model 08 DSDM 09 Summary

QinetiQ Proprietary © Copyright QinetiQ limited Project management and system development significant shared execution of life cycle processes between disciplines Enterprise Processes Project Processes System Development Processes Technology Processes

QinetiQ Proprietary © Copyright QinetiQ limited Open innovation In the commercial world there is a significant shift in how businesses deliver and evolve. ‘Open’ business models are triumphing over closed ones. Markets needs are changing faster than ever before Most innovation goes on external to the firm Rapid ‘clock speed’ of innovation Cost of technology development is increasing And, innovation is hard to control. In such circumstances organisations are becoming more agile, they are including the user in the development process and are adopting external innovations. Examples include: Proctor & Gamble, IBM and Cisco

QinetiQ Proprietary © Copyright QinetiQ limited Cisco and Lucent Technologies (and Bell Labs) Using an agile and open approach Cisco surpassed perhaps the finest industrial R&D establishment in the World, without doing much fundamental research of its own. In the fast moving network and communications market Cisco competed with Lucent Technologies (and Bells Labs) By using modular design Investing or partnering with external companies and start-ups Working closely with users Going early to market, gaining feedback And rapidly iterating to fit users needs. Cisco market value$200Bn Lucent Technologies $20Bn (bought by Alcatel)

QinetiQ Proprietary © Copyright QinetiQ limited Analogy with Defence? The ‘business models’ of terrorists and insurgents are very much an agile and open approach. They do not have thick internal R&D establishments, and are willing to take knowledge and technologies from anywhere to achieve their goals. Insurgents continue to compete using Cells of ‘users’ and ‘technicians’ Lessons from previous conflicts e.g. Israel Networks, state information, media, internet Weapons and commercial technology Rapid development through application.

QinetiQ Proprietary © Copyright QinetiQ limited The link with projects Business models, projects, risk and innovation are intertwined. Projects deliver solutions, generally innovative solutions. Thus, successful innovation depends on the project management approach. Much as we did during the Cold War we need to: Get inside the mind of the opponent. Focus more on the adversary rather than “our system”. Match and better our project management approach. But the adversaries approach is Agile And open to external innovation We need agile approaches. Motivation A requirement, timeline and reward Ability Resources, processes, knowledge and skills hot-bed for innovation Source: The Innovators Dilemma

QinetiQ Proprietary © Copyright QinetiQ limited Agile project management, agile development Agile development has a number of specific techniques. Examples are: Boehm’s spiral model DSDM They value user-innovator interaction and prototyping over heavy and formal documentation. Other key characteristics are early delivery, iteration and adaptable design. Traditional Agile LightHeavy People and prototype focus Process focus Source: adapted from ‘Standards, Agility and Engineering’, IEEE

QinetiQ Proprietary © Copyright QinetiQ limited Boehm’s spiral model Spiral development is a ‘risk-driven’ approach. At a basic level it is an OODA* loop. Meets user needs and reduces technical risk through an iterative approach: Inclusion of user in development process Identify risks Develop prototypes to reduce technical risks Modular design to facilitate change Integrate external innovations. Requires: Dedicated user involvement in project team, proving facilities and CONDO** Rapid integration of external technologies. Source: Cross-talk. *OODA = Observe Orientate Do Analyse **CONDO = Contractors on Deployed Operations

QinetiQ Proprietary © Copyright QinetiQ limited Boehm’s spiral model Spiral development is a ‘risk-driven’ approach. At a basic level it is an OODA* loop. Meets user needs and reduces technical risk through an iterative approach: Inclusion of user in development process Identify risks Develop prototypes to reduce technical risks Modular design to facilitate change Integrate external innovations. Requires: Dedicated user involvement in project team, proving facilities and CONDO** Rapid integration of external technologies. Source: Cross-talk. *OODA = Observe Orientate Do Analyse ObserveOrientate Do Analyse **CONDO = Contractors on Deployed Operations

QinetiQ Proprietary © Copyright QinetiQ limited Spiral model – an example [1] Requirements, development plan, other plans [2] Identify and prioritise risks P,T,C (technical, financial etc.) [3] Develop architecture, develop prototype, other risk reduction, “spin in” [4] Test with select group of users, “spin-out” [5] Incorporate feedback, review requirements and plans [6] Identify and prioritise risks [7] Develop prototype, other risk reduction, “spin in” [8] Test with users, “spin out” … Source: Cross-talk. OODA = Observe Orientate Do Analyse CONDO = Contractors on Deployed Operations ObserveOrientate Analyse Do “Spin out” “Spin in”

QinetiQ Proprietary © Copyright QinetiQ limited Dynamic Systems Development Methodology (DSDM) Source: “DSDM in a nutshell”, Keith Richards Like the spiral model, DSDM focuses on reducing risk through strong use- innovator interaction, early deliver and rapid iteration. Real functionality is valued over heavy and formal documentation. Key principles are: Time-boxing and Pareto 80/20 rule MoSCoW rules Modular adaptable design Just a time-boxed OODA loop? Identify requirements and risk Prototype Test Feedback and iterate Key principles: Time-boxing MoSCoW rules Pareto 80/20 rule

QinetiQ Proprietary © Copyright QinetiQ limited DSDM – key principles Prioritised requirements MoSCoW rules: Must have Should have Could have Won’t have (but Would like in future) As well as user-innovator interaction and prototyping, key principles are time- boxing, the rule and MoSCoW rule. Timeboxing: Decompose into bit-size chunks, easier to manage Fixed deadline, fixed cost Minimum box includes ‘Must have’ requirements Each box must deliver usable functionality 80/20 rule: 80% functionality delivered in 20% of the time (Likewise, the other 20% of functionality is delivered in 80% of the time)

QinetiQ Proprietary © Copyright QinetiQ limited DSDM – an example Joint Data Network Backbone project, a TADL IPT initiative and DACP A3 pilot. Approach Users embedded in the development team Focus is delivering functionality rather than documentation Time and cost ‘boxed’ – hard deadline Prioritised requirement, MoSCoW rules Competitive, parallel time-boxes Modular design Test with user in real operational scenario Feedback Iterate …

QinetiQ Proprietary © Copyright QinetiQ limited Summary In the commercial world and in defence, agile and ‘open’ models are triumphing over closed ones. To manage risk in changing scenarios, projects must : Value user-innovator interaction and prototyping over heavy and formal documentation Utilise modular design and integrate external technologies Deliver early prototypes, feedback and iterate.

© Copyright QinetiQ limited 2007