Quality as a value arbitrage

“The value decade is upon us. The only way to keep customers is to constantly figure out how to give them more for less.” - Jack Welch

Current Demands from Organizations To understand what customer wants and to provide it immediately, on demand at lower cost To provide products & services of high quality and reliability consistently To keep up with pace of change, Technological as well as political and social To be one step ahead of the customer’s needs; that is to predict what the customer will want one year or ten years from now

Quality – Changing Views PastPresent Defects need not be revealed to customers Quality problems are product related Quality issues considered historical event Increased quality increases costs Improved quality reduces total cost of ownership Quality issues analyzed and contribute to product and process quality improvement Quality problems are engineering and process related “Known defects” need to be communicated to customer to insulate customer from surprises Quality is inward focusedQuality is customer focused Quality is inward focused Quality function adds value to organization and customer

Streamlined Processes Flattened Organizations Complex Technology Deliver Business Value Control Costs Sense and Respond Integrating people and processes for SUSTAINED COMPETITIVE ADVANTAGE The Changing World and IT’s Response

Business Differentiators

Process Tools People Code Review Tools PMP Knowledge Management Requirement Development/ Management tool PgMP Technical Certifications Domain Certifications Estimation Metrics Productivity Governance SDLC Design tools Release and Build tools CM Tools Project Management Risk Management

Business Imperative : Narrowing the gap for greater business capabilities Human Skills and Technology Complexity

QA Transformation

Building competitive advantage through people, Christopher A. Bartlett & Sumantra Goshal. People - as a Differentiator

Processes – as a Differentiator Figure, from Solution Selling, Michael Bosworth

Value creation and Service Innovation Customer’s Customer Customer VZ-1 VZ-2 VZ-3 CZ-1 CZ-2 Vendor’s Competition Customer’s Competition Vendor Create Value Value Quantification Define Value VZ- Value Zone CZ – Comparison Zone Communication Customer Business Objectives Vendor’s Business Objectives

VZ-1 talks about the first zone of adding value within the contractual obligations or achieving better results that what is expected by the customer. VZ-2 talks about adding value by understanding the expectations of the customer’s organizations or their clientele including internal (E.g. IT department) or external (users of the services). The challenge here is the access and domain knowledge. VZ-3 goes a step further to look at learn from the customers’ competition there by adding value or innovate services that could make our customer more competitive in their market space.

Objectives for Standardization PPT Transformation ensures Consistency in implementation of all required processes Increased usage of standard Tools Good Customer Connect and Governance Effective usage and analysis of metrics Engagement level benchmarking of Performance Standard Estimation models Good Knowledge Management Up skill and cross skill of resources

Cost of Quality Production Prevention Appraisal Failure Production Prevention Appraisal Failure Reduces Cost of poor quality S/w Development cost 44% 56%

Opportunity for Value Creation Through Quality Quality Growing Revenues Reducing Defects & Errors Improving Cycle Times Reducing reduced cost Improving Capability Reducing Variation Improving Operational Efficiency

Engineering CostCost of QualityMaintenance Regular development process 51 % Reduction Engineering Cost 13 % Reduction Cost of Quality Mainte nance Cost Development Process with Quality guided Greater Productivity Higher Productivity 51 % Increase Lower Cost Cost of Quality 13 % Reduction Assured In Process Quality Post Delivery Defects 51 % Reduction Reduced Maintenance Quality Processes – Ensuring Lower TCO 51 % Reduction Post Delivery Maintenance Lower TC0 – 30 %

"When you're out of quality you're out of business.” Thank You!