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CMMI Models, Benefits, Problem Areas, and Future

January 29, 2009 | Author: PM Hut | Filed under: Miscellaneous

CMMI Models, Benefits, Problem Areas, and Future
By ExecutiveBrief Staff

Ensure your company doesn’t find itself behind the eight ball in today’s competitive marketplace. Learn how CMMI can help you stay ahead of the game!

“Many clients are increasingly requiring CMMI appraisals and ratings as criteria to bid for new business,” says David Greer, director of software process improvement for American Systems. As a company that focuses on CMMI consulting, training, staffing, and appraisals, American Systems maintains that using the Capability Maturity Model Integration (CMMI) as a process improvement approach makes good business sense.

Which CMMI Model Is Best?

When working with clients, Greer’s company has the responsibility of determining which CMMI model the client company will follow: staged representation or continuous representation. In the staged representation model, there are preselected business process areas that should be covered first. Clients build on one stage to the next stage. There are four levels in this model: 2, 3, 4, and 5. Those organizations that have an appraisal and fail it are placed on Level 1.

In the continuous representation model, there are six levels: 0, 1, 2, 3, 4, and 5. In this model, a Level 1 placement indicates that the company did what was required, but didn’t have good strategies for estimating or staffing. Levels 2, 3, 4, and 5 represent the same designation in both models.

Financial Benefits

CMMI can yield a phenomenal return on investment. In the software business, costs typically are organized into a number of categories (e.g., cost, schedule, productivity, quality, customer satisfaction, ROI), which are collectively referred to as “business value.” The business value of CMMI has remained relatively stable at 4:1; that is, if you invest $1.00 in CMMI-based process improvement, you will realize a $4.00 return in value. For nearly 20 years, companies implementing the approach have been seeing these positive results.

“Rather than replace existing business practices, CMMI serves to categorize and organize business practices for efficient access and utilization,” Greer adds. “The model is designed to address the major components of running an organization, including managing business-related processes, technology-related processes, and projects. CMMI also describes an infrastructure within which projects can be managed and executed, as well as interfaces with other external partners.” Project planning encompasses the creation of schedules, budgets, task lists, risk identification, and resource requests and the execution of specific functions that convert input into output according to defined standards for producing results that can be profitably sold to clients.

Is CMMI for Everyone?

Greer believes that CMMI can generally be a good fit for any organization developing a product or providing a service. Ultimately, all projects have a set of defined requirements that must be met within a framework of development practices, schedule, cost, and quality. “This is all accomplished by tracking progress, making small adjustments along the way, collecting data, and managing all the smaller sub-projects,” he says. “For this reason, CMMI is applicable for a very wide range of organizations.”

While success with a CMMI initiative is not specifically dependent on the size of the organization, Greer notes that is does seem to be a more difficult undertaking for smaller organizations (with less than 25 employees) to manage the initial overhead associated with CMMI adoption. The overhead costs involved with developing the policies, processes, training, and other elements associated with CMMI may exceed the benefits of implementation for some of these companies. “The model does seem to be more valuable for large, complex projects,” he points out.

Usage Modes and Problem Areas

There are two principle modes companies employ when using CMMI as a basis for their process improvement initiatives:

  • Process Improvement. When a company determines that having repeatable processes will improve its competitive posture, the company may mandate the CMMI’s usage through internally imposed initiatives or policies. When multiple organizations are bidding for work, the company that has a CMMI Maturity Level rating may have the advantage over the other bidders when the selection criteria are considered and therefore may well have a better chance of winning the work. When a company decides to subcontract a portion of their own projects, CMMI can help with effective management of suppliers.
  • Contractual. When a client levies a contractual obligation on a company through contracts, laws, or standards, the company must comply if it wants to retain the client’s business. When a client stipulates that the only way to win a valuable contract is to comply with an industry-recognized quality model, the decision is an easy one if there is a desire to keep the work.

Several areas that have historically proven problematic are as follows:

  • Estimating: The establishment of credible estimates based on historical data that subsequently can serve as the foundation for creating a project plan.
  • Measurement and Analysis: The creation of a database of information that allows management by fact rather than feeling.
  • Process and Product Quality Assurance: This area deals with the process improvement precept that the quality of the products of a system is heavily influenced by the quality of the processes used to develop them.

Case Study

Based on work with his company’s clients, Greer presents a case study scenario applicable for a software, aerospace, telecom, or healthcare-related organization environment. For the purpose of this case study, the process improvement scenario will be addressed.

Company A was experiencing difficulty meeting its scheduled commitments. American Systems served as facilitator during the company’s analysis of the problem. American Systems initially came to the conclusion that the problem was related to overly optimistic estimates. “Using the model in process improvement mode, we looked at the components that specifically addressed their issues,” explains Greer. “The model suggests making estimates based on historical data gathered from past similar projects. Using this data, we determined that the original estimates were actually quite accurate; however, senior management—focused on time to market—was reducing the estimates to force a delivery schedule that the data didn’t support,” he adds.
The software management team approached management with the conclusion that since the data (gathered objectively through a measurement program) reflected a certain productivity level, it was an unreasonable expectation for them to realize significant improvements in productivity using their current processes. American Systems conducted a brainstorming session to come up with several alternatives. The possible changes suggested were to use more skilled resources, reduce the contents of a typical delivery, reduce the number of deliveries per year, or follow an abbreviated process. Each of these choices carried with it a particular risk.

“Using the model further, the risk management process allowed us to categories and prioritize the risks attendant with each suggestion and determine a specific strategy,” Greer explains. “Quarterly releases were an industry standard, so the delivery schedule had to be maintained. Using more highly skilled resources would have resulted in greater costs and, consequently, reduced profits, a non-starter with senior management. An abbreviated process had the potential for allowing more defects to be delivered and therefore was rejected as a possible solution. The option of slightly reducing the functionality included with each release met all criteria and was ultimately the strategy selected.”

CMMI is intended as a means of ensuring that an organization is implementing and maintaining best practices that have been developed and proven over time. Organizations that follow their own best practices during times of high stress can avoid missed delivery dates, budget overruns, and poor quality deliverables and will be equipped to make better decisions and recover more quickly than organizations that make hasty decisions due to lack of the essential elements of effective processes.

Benefits of CMMI

Simply put, the key benefits that can be realized through implementing CMMI as a process improvement approach are as follows:

  • If you have effective, proven processes in place, you will deliver quality products and/or services.
  • Satisfied customers will bring repeat business and referrals, contributing to improvement of your bottom line.
  • Increased efficiency will benefit the company financials, as you accomplish more for less money.
  • Organizational risk is reduced, with less chance that money and other resources will need to be spent to bail out a failing project.

The Future of CMMI

Greer notes that the Software CMM (CMMI’s predecessor) was originally developed to aid in the development of complex software systems. “When other CMMIs were released, they needed a name, and people started referring to the additional ones as constellations,” he says. CMMI for Acquisition was recently released to support organizations whose main business model includes the acquisition and integration of products and services from a third-party vendor that is to be further refined and delivered to a client (supply chain management, acquisition, and outsourcing processes in government and industry). CMMI for Services, only released in draft form so far, addresses the guidance for delivering services within an organization and to external customers. Regardless of the model implemented, the unique business objectives should be considered and the CMMI best practices should be adapted to the individual organization in order to realize the greatest benefit from the improvement initiative.

ExecutiveBrief, the technology management resource for business leaders, offers articles loaded with proven tips, techniques, and action plans that companies can use to better manage people, processes and tools - the keys to improving their business performance. For more information visit us at: www.executivebrief.com.

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