vector benchmarking suite · step 2: measure against the ... improvement projects fail productivity...

V1.1 | 2016-04-19

Christof Ebert, Vector Consulting Services

BenchmarkingExperiences and Guidelines for Improvement

© 2016. Vector Consulting Services GmbH. All rights reserved. Any distribution or copying is subject to prior written approval by Vector. V1.1 | 2016-04-19

… supports clients worldwide in improving their product development and IT and with interim management

… with clients such as Accenture, Audi, BMW, Bosch, Daimler, Ford, Huawei, Hyundai, IBM, Lufthansa, Munich RE, Porsche, Siemens, Thales, Toyota and ZF

… offers with the Vector Group a portfolio of tools, software components and services

… is as Vector Group globally present with 1500 employees and well over 300 Mio. € sales

www.vector.com/consulting

Vector Consulting ServicesWelcome

Railway

IT & Finance

Automotive

Aerospace

Industry

Medical

2/22


Welcome

Performance Improvement

Benchmarking

Case Study

Summary

Agenda

3/22


Product Development and the Business ImpactPerformance Improvement

Department Ping Pong

Added value30%

Overheads40%

Pure waste30%

Sources: Vector Benchmarking Suite, Ebert 2016

4/22


Optimizing Value – Balancing “Good Enough”Performance Improvement

Value

Effort

Target Realistic

Good enough

Insufficient quality

Technical debt

Over-engineering

5/22


Welcome


Benchmarking

Case Study

Summary

Agenda

6/22


Benchmarking is the structured and systematic learning from the best in class.

Benchmarking of IT and Software applies to different dimensions

Products (e.g., quality requirements, product complexity, variance, platforms, technical debt, architecture)

Processes (e.g., roles, methods, tools, value stream, productivity)

Projects (e.g., estimation, supplier management, interfaces)

People (e.g., competences, distributed teams, organization)

What is Benchmarking?Benchmarking

Prod

uctiv

ity

Time

Improvementneeds

SustainableImprovements

Learning, Transitition

7/22


Step 1: Understand needs and set goals Which strengths and gaps need to be addressed? Which products, services and practices need to be improved? What results are expected from a benchmark?

Step 2: Measure against the best in class Which performance indicators should be measured? What reference data is available?

Step 3: Implement sustainable improvements Which concrete actions will translate benchmarking results to benefits? How to avoid that benchmarking is a short-term hype?

Benchmarking Consists of Three StepsBenchmarking

Benchmarking means measurement and improvement.

If Benchmarking is misunderstood as mere data collection it will not yield any value.

8/22


Business Performance and ImprovementBenchmarking

Business Performance

BusinessPain Points

Marketing, Ops, Product Mgmt

(Customer Satis-faction, Prizing, Service, Revenues, Organization, Corporate Culture)

Sales, Marketing, Finance …

IT/Software Impact

Pain Points Performance

Change Program

Continuous Improvement

Vector Benchmarking Suite

Measurements(Gap analysis, Engineering and IT performance, contribution to business, improvement progress)

Industry benchmarks(Product, Defects, Rework, Complexity, Locations, Competences, People management, Processes)

Productivity levers: Value orientation, Waste reduction, People focus

Best practices for change

9/22


Vector Benchmarking SuiteBenchmarking

Organization rating and improvement suggestions• …• …

Strengths and weaknesses from benchmarks• …• …

Improvement Potentials

PerformanceRatingBenchmarksVector

DB

Client Data

Quantitative

Qualitative

Practices

Data

Dat

a an

dM

eta-

Dat

a

10/22


The role for measurement 80% of all life-cycle costs are (pre-)

defined in development, e.g., rework or variation

75% of companies don’t reliably measure their cost drivers

An average project accumulates 43% of unplanned costs before finished or aborted

Benchmarking needs MeasurementBenchmarking

Our recommendations:

Set up mandatory internal standard measurements

Do not just collect data, but analyze and use the data, such as trends

Compare apples and apples

Provide ways to learn and to improve from benchmarks

Evaluate contribution and pinpoint to external effects, e.g. changes, complexity

Dvmt cost

Cost of sales

Others

Waste: defects, rework

etc.

Value: Regular project

cost

Focus

Product cost Dvmt cost

Businessimpact

11/22


Welcome


Benchmarking

Case Study

Summary

Agenda

12/22


Vector Case Study: Qualitative AnalysisCase Study

Focus on value

Continuouslyimprove

Empowerpeople

Eliminatewaste

Optimize value streams

Agile development

Requirements valuation (e.g., Kano)

Earned value management

Variant reduction

Review culture

Test-oriented requirements engineering

Defect root cause analysis

Reduce and manage require-ment changes

Early defect detection

Criticality analysis

Train people on key competences, e.g. project managers, product managers

Core teams with business ownership

Empowered feature teams

Less site distribution of projects

Vector 3-S approach for each improvement: Set-up, Success, Sustain

Client practices and data are continuously benchmarked

Reduce interface frictions

Combined design / test teams

Higher process maturity

Case Study Focus

13/22


Always7%

Often13%

Sometimes16%

Rarely19%

Never45%

Vector Case Study: Set a Clear FocusCase Study

Feature UsageSources:

Vector Benchmarking Suite, Microsoft, Daimler, BITKOM 2012,

Ebert 2016

Our recommendations:

Set a clear goal: Reduce waste

Analyze waste in work flows such as requirements value, requirements changes, duration of open defects, defect detection effectiveness.

Learn from industry best practices and extract concrete prioritized actions

Project: Use quality gates as defined thresholds and to ensure transparent governance.

Product: Reduce technical debt such as insufficient architecture with concrete refactoring actions.

Case Study Focus

14/22


Vector Case Study: Quantitative AnalysisCase Study

Prod

uctiv

ity

# Tasks allocated per person

Optimum: 2-3 tasks or projects

Prod

uctiv

ity

# Sites per project

Optimum: 2-3 sites

Prod

uctiv

ity

Project complexity

Optimum: < 1year duration< 10 PY effort< 1000 FP size

Prod

uctiv

ity

Effort for requirements and architecture

Optimum: 10-15%

Prod

uctiv

ity

# Requirements changes

Optimum: <40%

Prod

uctiv

ity

# Project delaysat handover

Optimum: 5-10%

Sources: Vector

Benchmarking Suite,

Ebert 2016

Focus

15/22


Vector Case Study: Implement the Change ProjectCase Study

From Classic Development

Client Benefits

25% reduction of lead time and effort before project start

Reduction of hand-offs and ping-pong between project functions

20% reduction of project lead time by concurrent engineering

To Lean Agile

Vector Contribution Streamlined development

processes and interfaces

Value-orientation end-to-end

Product line engineering from requirements onwards

Efficient yet effective safety processes and governance

16/22


Welcome


Benchmarking

Case Study

Summary

Agenda

17/22


Two thirds of productivity improvement projects fail

Productivity improvement is a substantial culture change

Change is often underestimated and handled ad-hoc

Reasons No management leadership Insufficient communication Lack of internal know-how

Performance Improvement Is Not EasySummary

Sources: Vector Consulting Services 2016

48%

Internalresistance

Insufficient know-how

Pressurewithoutownership

Other reasons

22%

17%

13%

Benchmarking needs top-down improvement focus.18/22


Consider business impacts Start with strengths and weaknesses Set improvement targets

in line with your business needs Start benchmarking top down

to achieve sustainable results

Learn from best in class Consider value, waste, people

– and your ability to improve Don’t just collect and compare measurements

Use benchmarking to grow Continuously challenge your performance

RecommendationsSummary

Benchmarking must be supported by experts to avoid number-crunching without sustainable improvement.

19/22


Concrete Benchmarks and MeasurementsSummary

Software MeasurementEstablish, Extract, Evaluate, Execute

Christof Ebert and Reiner DumkeThird edition, Springer, 2007www.vector.com/books

“Few organizations have really institutionalized measurement of their products and processes. This book is bang up-to-date in both fields and packed with practical advice. For every software engineer."

Charles R. Symons, Inventor of Function Points

20/22


Optimizing Global Projects and TeamsSummary

Global Software and IT

Christof Ebert2. extended Edition, Wiley, 2011 Discount: http://bit.ly/cSjZgD

"This book stands out as the best source of information on distributed software development. Seldom do we see a book with the concepts completely backed by industry experiences and views. Software developers and managers benefit from the broad case studies.“S M Balasubramanian, Vice President, Wipro Technologies

21/22


Vector Consulting Services

For more information about Vector Consulting Services please visit

www.vector.com/consulting

Your Partner in Achieving Engineering ExcellencePhone +49 711 80670-0 www.vector.com/consultingFax +49 711 80670-444 [email protected]

vector benchmarking suite · step 2: measure against the ... improvement projects fail productivity...

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