Integrating CMM & Six Sigma

For a
Competitive edge

-Paddy Rao
Associate VP , Infosys

1
 The India Image
HI • Ireland • Israel

• Singapore

• Mexico
•India seen as Cost &
Quality Leader by the
Cost

• Hungary
• Malaysia World
• Phillipines
• India

• China
• Russia

LO Quality HI
Pricing Tier Hourly Billing Rate Selected Companies
US Developers: High-End $240 to $310 Diamond; Scient
Mid Range to High Range $180 to $210 Agency.com; Lante; xicom;
Razorfish;
Low Range to Mid Range $150 to $180 Answerthink; Digitas;iXL;
Sapient
Overseas Developers $35 to $80 Cognizant Technologies;
Covansys; IMRglobal;
InfoSys
pub. 5/01
© 2001 Jupiter Media Metrix, Inc.
© McKinsy Study 2
 Segment Analysis
Out Source Proximity Source On site

HI
•Applcn maint • Ireland • Israel
Cost sensitive
•Core rewrite • ERP

• Mexico
• Data
Project Effort

cleansing

• New Screens

Do not Source
• Hungary
Bundle Source

• Database tuning • Custom Patches

• E Comz
ON SHORE ?
• China
• Russia personalization

LO Interaction needed HI

•‘On Shoring’ to provide ‘On Site’ coupling with

‘Off Shore’ economy
• Costs will continue to drive ‘Off Shoring’
© McKinsy Study 3
 The India advantage
Labor 7 50

Statutory 3 15

Mark up
8 18

Others 7 17
25 100
Percentage costs for India & US

X4 factor in costs !
© McKinsy Study 4
Indian Recipe :Building a Global IT Powerhouse
Step 1: Build a Solid Foundation
- Start with a compelling model: low-cost, high-quality,English-speaking, labor
force

- Add processes and methodologies to create enhanced delivery and

quality capabilities
Step 2: Develop Advanced Technology Capabilities
- Accept entry projects with leading technology customers
- Build industry / project-specific skills
- Leverage existing projects and internal R&D to migrate up the technology curve
- Transfer gained knowledge throughout employee base
- Concentrate on larger, more advanced technology projects
Step 3: Create Strong Relationships to Leverage Technology and Delivery
Capabilities
- Use integration skills to partner with consulting and other outsourcing
companies
- Partner with product companies for new product development
© 2001 Merrill Lynch 5
Current Reality

• SW is the new “all pervading ether”

• I.T propels efficiency in all Segments
• It is the ‘Ganga’ of business opportunity
• I.T industry will swing
• I.T Industry .. to be adaptable & resilient
• Cost Leadership will drive sustenance

SW Process to recognize the ‘way we do business’

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 Offshore Outsourcing Models
Model #1 Complete “offshoring” by hiring a firm based
“Indian Offshoring” in India. This is the riskiest model for most
Global 1000 companies.
Model #2 Vendor brings offshore resources to the
“Indian Onshore relevant local geography through H1B Visas
Outsourcing” or the equivalent.
Model #3 Combination of offshore/onshore. The
“Transparent Indian vendor/systems integrator places analysts,
Outsourcing Model” architects, strategists and project managers
onshore. Programmers code in India
through an almost 24 hour time frame. The
client company only deals with onsite
resources and the India relationship is
“transparent”. This is the most effective
model.

© 2001 Giga Information Group, Inc. 7

 Objective : Drive sustainable business value

TCO • Align initiatives to

focus TCO

Sustainable
Business
Speed
to market Value

• Assess speed Vs Rigor

• Value add drives process

Strategic use
of technology
• Leverage existing tools
• Introduce innovative
technology

How do we project manage a Remotely offered service ? 8

1.Moving work to Low cost areas of the globe
Europe: Stockholm
Brussels
Amsterdam
Canada: Toronto London
Frankfurt
Paris

Japan: Tokyo
USA: Atlanta, Australia: Melbourne
Boston, Sydney
Chicago, Hong Kong
Dallas, Singapore
Los Angeles,
New York,
Fremont,
Seattle

India: Bangalore,
Chennai, Pune
Bhubaneswar,
Hyderabad,
Mangalore,
Mohali, Mysore
Delhi, Mumbai

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…Inventing & perfecting the Global Delivery Model

Client Location / PDC Offshore Development Centers

Discovery
Intelligent
Project Project
Project
Analysis and planning Project management breakdown
High level design Detailed design
User interface design Coding
Project co-ordination Testing
Onsite testing Documentation
Implementation
Leverage
extended
Post implementation
workday
support
Post implementation
support
Bug fixes
Warranty support
Maintenance Leverage cost
Rapid reaction support efficiencies

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2.Customer CTQs: Quality, Cost & Timely delivery

Reduce Reduce
Increase
Project Maintenance
Productivity
Cost Cost

Reduce Reduce
Strengthen
Time Life cycle
Partnership
To Market Cost

Reduce
Increase Increase
Response
Reliability Predictability
Time

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3. Getting a handle of TCO

Maintenance
Life time costs
Cost

Financial
overheads
Admin
Input Costs

Overheads A simplified
Travel TCO Model
Communication
HW & SW
Purchases
Base Variable

COQ Are we getting there ?

Cost Cost

(rev+rew
+test+trg)

Work content
Effort
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Margin View of work flow Price
Pressure

Costing Other Pricing

RE RA Model Costs Model

Change Effort Process Adhoc Contract

Mgmnt Model Capability Process Revenue

Life Cycle
Process

COQ Cost of
Revenue

Contribution Gross Margin

Margin

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4. Six Sigma as a Strategic tool

Issue Classical Six Sigma

Outlook Short term Long term
Analysis Point estimate Variability
Tolerance Worst case design RMS
Process Tweaking SPC
Problem Fixing Preventing
Behavior Reactive Proactive
Reasoning Experience Statistics
Aim Organization Customer
Direction Seat of Pants Benchmarking
Improvement Automation Optimization

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5.CMM : SW Engg model
Measurement @ Maturity Levels

Optimizing (5) Level 5—improvement

Focus on process and cost/benefit data

DFSS improvement
Managed (4) Level 4—process and
Process measured and product quality data
controlled
DMAIC

Defined (3)
Level 3—process data
Process characterized,fairly
well understood
ISO

Repeatable (2)
Can repeat previously Level 2—planning and
mastered tasks tracking data
Heroism

Initial (1) Level 1—haphazard data

Unpredictable / poorly
controlled 15
6.Management paradigm for IT Industry

• Keynes made the Demand Elastic …..

• a fatalistic View

• Taylor broke work into elements …..

• ignored synergy

•Maslow created a Pyramid of needs …..

• overlooked dynamism due to prosperity

• Sloan created classical Management hierarchy ……

• seeding bureaucracy & silos

Need something different ?

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Wish List

• Align CMM to ‘Global Work Flow’

• Integrate CMM & Six Sigma
• Evolve ‘e Management Structure’
• Drive Cost Leadership
• Business folks to drive ‘Process & Quality’
• Convert ‘Police state’ into ‘Commune’
• Dismantle ‘Ivory Towers’

Can CMM deliver this ?

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Thank You

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