1. IBM Software Group ® Systems and Software Trends Critical Success Factors in Process Walker Royce IBM Software Group

2. IBM Software Group | Rational software Geographic distribution of business - The new norm  Work aligned to markets and customers  Evolution of right-sourcing  Leveraging distributed development Modular systems - Greater flexibility  Maximize investments: Reuse components  Increase flexibility: Interoperable systems  Accelerate initiatives: Scalable and agile Accommodating compliance - The new necessity  Management reporting, audit support Sarbanes Oxley, HIPAA, 21CFR11, Basel II, EASHW  IT, systems, project and product level accountability ITIL, COBIT, COSO, ISO 900x, Six Sigma  Development compliance level Change management of assets, traceability CMM/CMMII, RUP, DODAF Open computing - A new route to collaboration and innovation What we see …

3. IBM Software Group | Rational software PROJECT DRIVEN BUSINESS DRIVENTRADITIONALCURRENT REALITY Co-located teams Technology led Vendor lock-in Application silos Geographically distributed Compliance Open computing Modular systems (SOA) Right-sourcing Standards BUSINESS TRENDS Business Driven Development Enabling organizations to govern the business process of software and systems development Evolving software and systems delivery

4. IBM Software Group | Rational software System Cost/Time Estimation

5. IBM Software Group | Rational software Business Driven Development Increased revenues  Better quality  Differentiated products, systems or services  Earlier time to market Better Business = Revenue Cost Growth * Reduced costs through SOA, GDD, Automation  Better software economics  Smaller development teams  Faster development cycles  Rightsized processes and skills  Effective architectures and reuse Improved Reputation  Better Governance  Attractiveness to customers  UL stamp  Attractiveness to workforce  “Best company award”  SOx, CMMI, ISO 9000, HIPPA, CFR11  Openness, Standards  Track record of performance

6. IBM Software Group | Rational software Software Governance Proprietary Not Integrated 100% Custom Ad-hoc Mix of Proprietary and Commercial Not Integrated 30% Reused Assets 70% Custom Repeatable Commercial Integrated Processes-Tools Managed and Measured Tools Complexity Process 1960s-1980s1990s-2000s2005+ Project Performance PredictableUnpredictablePredictable 70% Reused Assets 30% Custom over budget, over schedule Infrequently on budget, on schedule Frequently on budget, on schedule Collocated OJT Collocated Software Skills Distributed Systems/Software Professionals Team 10%25%-33%50% + Success Rate

7. IBM Software Group | Rational software Development Governance Definition  Application of governance to  Development organization  Development programs  Context  May be part of IT Governance  May be part or whole of product development  May be service Governed Processes  Program  High Variance Analysis Design Development planning  Medium Variance Implementation Iteration planning Version control Build/Integration/test  Low Variance Maintenance/Test UCM Product Data Management  Organization  Portfolio Management Qualitative  Estimation  Service delivery  Asset management

8. IBM Software Group | Rational software Four Patterns of Success  Scope management  Asset based development  Solutions need to evolve from user specifications AND user specifications need to evolve from candidate solutions. As opposed to getting all the requirements right up front.  Process management  Rightsize the process  Process and instrumentation rigor evolves from light to heavy. As opposed to the entire project’s lifecycle process should be light or heavy depending on the character of the project.  Progress management  Honest assessments  Healthy projects display a sequence of progressions and digressions. As opposed to healthy projects progress to 100% earned value with a monotonically increasing and predictable plan.  Quality management  Incremental demonstrable results  Testing needs to be a 1st class, full lifecycle activity. As opposed to a subordinate, later lifecycle activity.