Process Improvement and Standardisation in IT - A Telecoms Organisation Example David Evans

The Challenges  Project variance was unpredictable with project overrun often resulting in a 40% + overspend with invoicing erratic and unchallenged.  Due to the lack of process and a time and materials engagement model suppliers were being rewarded for poor quality via the ability to ‘bill’ additional time to resolve issues  The suppliers were seen to be ‘in-control’ and perceived to treat their client as an ATM or ‘cash-cow’

Objective The initiative was underwritten by four objectives: 1. Improve the quality of the deliverables 2. Have a clear, repeatable process that is to be followed by all suppliers 3. To gain control of the project spend creating predictability and certainty 4. Assign accountability for project overruns

The method  Define the target high-level goals and methods supporting the capability behind the ability to deliver projects  Measure the existing capability in order to:  A:Define a resolution roadmap  B:Objectively evidence that objectives have been met  Analyse the results and set a remediation activity plan  Implement the improvement plan  Re-Measure the capability and implement a continuous improvement plan

The Measure  CMMI was formally implemented to measure the current capability and the results shared across the organisation Sample for Test Execution Sample for a Development Team

The Analysis  The CMMI process measurements enabled the team to develop a prioritised roadmap based upon an agreed Target Operating Model and Timeline.  Target Operating Model  Test Execution, Environment and CRM Development must be in a position to offer up a standardised SDLC/ Project Methodology that represents a CMMI Level 3 maturity level  The Timeline  All teams are to be re-measured on an 18 month timeline observing both process maturity availability and adherence

The Implementation  A new process based SDLC was developed on a team by team basis over a 12 month and € 1M budget that reflected:  Whole Lifecycle

The Implementation  A new process based SDLC was developed on a team by team basis over a 12 month and € 1M budget that reflected:  The Project Phase

The Implementation  A new process based SDLC was developed on a team by team basis over a 12 month and € 1M budget that reflected:  All Tools & Templates

The Results  CRM Development, Test Execution, Test Environment & the Billing Development Team achieved:  Full Process Documentation within 12 Months and all suppliers both following and being assessed against process adherence  All Teams achieved CMMI Level 3 ratings within 14 months  Project Slippage & budget variance reduced by 30%  Insight into quality issues doubled  Root cause analysis resulting from the process work enabled both future improvement initiatives but also helped to foster a culture of continuous improvement  A standardised process model enabled the transition from time and materials to a fixed cost model

Fixed Cost Model  Objective:  To transition the delivery model from a supplier Time & Materials to a Fixed Cost model with the objective of achieving  Reduced project delivery costs  Assigned Accountability  Predictable cash movements and project funding  Variance managed through sponsor approved change only  Further leverage of the defined process roadmap

Fixed Cost Methodology  Considerations  The implementation must be timely  It needs to accommodate all projects/ suppliers at a single point in time  The entry point was to align with a release management structure  Note. For non-release managed projects tollgate timings were used  To succeed it needs to represent a win-win between supplier and customer  The supplier needs to benefit from early completion  SOW’s were requested, reviewed, renegotiated and accepted by the supplier  The customer needs to benefit from late completion/ poor quality  Overruns were born by the supplier unless the root cause was the suppliers at which point a formalised change request process was to be utilised

Fixed Cost Methodology  Considerations (continued)  Competition is essential  Before each project commenced an RFP was issued to all five suppliers  The responses were reviewed and workshops were held to answer questions where all suppliers attended to ensure an even playing field  Once a project was accepted the suppliers were expected to adhere to the terms of business

Fixed Cost Implementation  All suppliers were addressed as one where it was made clear that if they did not wish to participate they were free to end their engagement  All suppliers participated in the process formation  Purchasing and legal were engaged at day one  All existing contracts were placed on notice  New contracts were draw under the same terms of reference for each supplier  The supplier-side management team was retrained in order to be in a position to effectively assess the SOW’s and to engage in and manage the change management process

Results Behind Fixed Cost Transition  The transition for all suppliers was completed in six weeks  Non-approved project variance was removed completely  Invoicing became end-of phase only and variances only paid where approved change requests were available and signed by the project sponsor/ budget holder  The organisation was able to forecast cash movements on a predictable cycle enabling better use of funds  Variance from schedule was reduced and quality rose as suppliers were accountable for their own variances  The fixed cost model enabled a full transition to a full, outsourced managed service delivery model after 24 months.