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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
© 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
Welcome
Performance Improvement
Benchmarking
Case Study
Summary
Agenda
3/22
© 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
Product Development and the Business ImpactPerformance Improvement
Department Ping Pong
Added value30%
Overheads40%
Pure waste30%
Sources: Vector Benchmarking Suite, Ebert 2016
4/22
© 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
Optimizing Value – Balancing “Good Enough”Performance Improvement
Value
Effort
Target Realistic
Good enough
Insufficient quality
Technical debt
Over-engineering
5/22
© 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
Welcome
Performance Improvement
Benchmarking
Case Study
Summary
Agenda
6/22
© 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
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
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© 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
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.
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© 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
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
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© 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
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
© 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
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
© 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
Welcome
Performance Improvement
Benchmarking
Case Study
Summary
Agenda
12/22
© 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
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
© 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
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
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© 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
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
© 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
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
© 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
Welcome
Performance Improvement
Benchmarking
Case Study
Summary
Agenda
17/22
© 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
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
© 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
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.
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© 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
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
© 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
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
© 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
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 consulting-info@vector.com
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