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Setting the Scene

Quality Management – Justifying Investments Samu Lehikoinen Solution Architect HP Software Finland. Setting the Scene. IT Inflicted Business Revolution. Online Trading Business Transformation from technology provider to service provider

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Setting the Scene

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  1. Quality Management –Justifying InvestmentsSamu LehikoinenSolution ArchitectHP Software Finland

  2. Setting the Scene

  3. IT Inflicted Business Revolution • Online Trading • Business Transformation • from technology provider to service provider • Strategic competitive advantage (IPTV, comes with content) • Efficiency and self service • mobile services • localization services, Tourism, online booking • … Business Processes are run on IT.

  4. STRATEGY APPLICATIONS OPERATIONS Business & IT Services Business Needs HP Software’s lifecycle approach to BTOOptimize IT efficiency and business value Business Outcomes Make right spending decisions Deliver on time Meet business SLAs HP SOFTWARELIFECYCLE APPROACH Automate end-to-end processesShare information and tools

  5. Service lifecycleOptimize the services IT delivers to the lines of business Business Outcomes Optimize business alignment by prioritizing utilization of IT resources – capital, people and assets – inline with business priorities STRATEGY APPLICATIONS OPERATIONS Business Availability Center QualityCenter Project & PortfolioManagement Center Service Management Center Change & Configuration Center PerformanceCenter Operations Center Network Management Center Application SecurityCenter Automate consolidation and prioritization of requests across strategy, apps and ops Gain visibility into planned and actual costs of application projects and IT servicesManage supply and demand based on operational data across strategy, apps and ops

  6. Definitions • Quality Management • method for ensuring that all the activities necessary to design, develop and implement a product or service are effective and efficient with respect to the system and its performance • three main components: quality control, quality assurance and quality improvement • Business Value – Generic term • Some examples: Customer Satisfaction, Revenue Growth, Profitability, Market Share, Wallet Share, Cross-Sell Ratio, Marketing Campaign Response Rates, or Relationship Duration.

  7. Problem statement (Business Viewpoint) How can we ensure that applications provided by IT to automate Business Processes actually provide value to the business and continue to do so throughout their useful life? 36

  8. Problem statement – QA Team Viewpoint How can we proof - with reasonable credibility - that further investments on QA will lead to increased business value of the Application or Application portfolio? …throughout the Application lifecycle… 36

  9. IT, Applications and Business Value Viewpoint

  10. TSE managing director Tomio Amano blamed the glitch on a software upgrade for processing data from securities companies which was introduced in October Quality - Who Cares? 35

  11. Measuring Value by… • Nordic bank could not claim service payments after unsuccessful integration – cost 10 M€ • Bank lost 40000 customers in the integration process Taloussanomat 28.10.2008

  12. … Post-Disaster Assessment

  13. “40%of unplanned downtime iscaused by application failures, costing an average of $100k per hour for mission-critical apps” - Industry Analyst Gartner, From Concept to Production, Software Changes and Configuration Management, April 2008

  14. Apr 19th, 1 am Maintenance team finally producespatch that is expected to fixthe invoice module Apr 12th, 1am Major Application Update Rolled out Apr 12th, 12 noon Invoice modulenot working; expensivemanual process instituted Apr 19th, 12 noon Patch brings downentire finance system Ongoing Change Adds to the Problem … GoLive 31

  15. Loss of Existing Customers Loss of Potential Customers Brand Damage Loss of Revenue Staff Morale Triage Costs Rework Costs What is the Business Impact?

  16. Most IT organisations are focused on what goes on inside the IT organization. 29

  17. They manage IT outcomes. 29

  18. “The single most important thing to remember about any enterprise is that results exist only on the outside.The result of a business is a satisfied customer. The result of a hospital is a healed patient. The result of a school is a student who has learned something and puts it to work 10 years later. Inside an enterprise there are only costs.” - Peter F. Drucker, The New Realities

  19. Maximizing Business Value • Balancing between strategic and “keep the light on” initiatives • IT Financials Management • Asset Management • Portfolio management • Project management • Business Service Management • And so on BTO - Aligning all IT operations to Maximize Business Value of IT.

  20. The questions remaining for QA… 27

  21. How do we justify the QA effort or investment ?

  22. How do we communicate Business Risk?

  23. How Can I get to Home ?

  24. How do we optimize QA efforts ?

  25. Application Layer ACCRUE COST TAKE RISK PROVIDE VALUE Infrastructure Layer Production Development 26

  26. Application Layer REDUCE COST PROVIDE VALUE Infrastructure Layer TAKE MORE RISK Production Development 25

  27. Application Layer INCREASE COST Infrastructure Layer Where is the idealtrade-off point? TAKE LESS RISK PROVIDE VALUE Production Development 24

  28. Where Are Defects Detected? 59.5% 20.5% 16.5% 3.5% Test Req Dev Prod Source: NIST 2002 RTI Project 7007.011 19

  29. Where Defects Are Introduced Where Defects Are Detected Relative Cost to Fix Req Dev Req Dev Req Dev Test Test Prod Test Prod Prod Cost of Defects Actual Cost Ideal Cost Req Dev Test Prod The Value of Fixing Defects Early X X 16 Source: NIST 2002 RTI Project 7007.011

  30. Where Defects Are Introduced Where Defects Are Detected Relative Cost to Fix Potential Value of Earlier Testing Req Dev Req Dev Req Dev Test Test Prod Test Prod Prod Cost of Defects Actual Cost Ideal Cost Req Dev Test Prod The Value of Fixing Defects Early X X 15 Source: NIST 2002 RTI Project 7007.011

  31. Where Defects Are Introduced Where Defects Are Detected Relative Cost to Fix Req Dev Req Dev Req Dev Test Test Prod Test Prod Prod But Are You Measuring This? ? ? ? 14 Source: NIST 2002 RTI Project 7007.011

  32. Application Layer ACCRUE COST TAKE RISK PROVIDE VALUE Infrastructure Layer With the right approach … Production Development 13

  33. Application Layer REDUCE COST PROVIDE VALUE Infrastructure Layer … we can achieve this! TAKE LESS RISK Production Development 13

  34. HP QM Approach

  35. New Deployment or Major Upgrade Fix/ patch Fix/ patch Fix/ patch Minor release Minor release Full Quality process Focus on fast turnaround The Real Lifecycle of an Application Build& Test Plan Define Launch Operate 12

  36. Value provided to the business Application Layer Business Service Infrastructure Layer ALM (as defined by certain industry experts) Alternative view of ALM HP BTO HP Application Lifecycle Production Development ITIL Version 2 ITIL Version 3 7

  37. The future holds even greater risk Ensuring quality of service-based applications “Quote to cash” End-to-end business process J2EE SOA shared service library

  38. Will my Application work in Production? Will it do what it is intended to do at all times? Will it be Secure? Are you sure that it cannot be compromised for personal or financial gain? Will it be Responsive? Will it continue to deliver value under load, with acceptable degradation and no functional failures? Three Critical Pillars of Quality 21

  39. HP QM Approach ExamplesFunctional Testing

  40. Justifying investments: Quantifying the Value of Quality Assurance

  41. HP Quality Model The move toward centralized quality assurance Stage 4 Stage 3 Quality andperformance authority Service utility Stage 2 Enforce and improve quality and performance standards across the enterprise Centralized personnel help improve project quality and performance Product utility Stage 1 Centralized product available as a shared service Project testing Perform testing of individual projects ROI ROI Enterprise impact ROI Leverage Expertise ROI Hardware and software consolidation More efficient delivery of applications into production

  42. Discover Challenges (Anecdotes) Initiatives Align Value Propositions BusinessApplications Infrastructure Benefit Models (ROI Scenarios) Demand / Cost Models Model Deliver ROIResult Customer Data Business Case Package Building Business Case - HP’s Process

  43. Minimize cost(efficiency gains) Mitigate risk (quality improvement) Minimize time (faster time to value) • Reduce the level of effort associated with: • • Requirements management • • Test coverage management • • Test management • • Defect management • • Test automation • • Status reporting • Reduce risk of application defects, leadingto: • Lower rework costs • Lower support costs • Fewer end user minutes lost (end user productivity) • Revenue protection • SLA or regulatory non-compliance • Get revenue producing applications to market faster Examples Quantifiable value propositions Quality assurance

  44. Example - Benefits Summary

  45. Example - Benefits Summary

  46. Why commercial solution ? • Integrated requirements management • Efficiency gains for individual tester • estimation of application maturity • Project customizations are easy • Out the box metrics for leading QM initiatives • Enables cross project quality metrics • Enable the organization to move toward centralized QA • Integrations to test automation, security- and loadtesting tools • Life cycle integrations to HP BTO software • Skilled Resources available, Large User Group • …

  47. The HP difference Ensuring application quality and business outcomes Lifecycle approach to quality • Ensures readiness of new application deployments and upgrades • Improves the speed and efficiency of quality efforts Greatest coverage of enterprise environments and platforms • Unparalleled support for your application environments Quality methodology model • Repeatable quality process designed to save time and cost over traditional approaches Undisputed industry leadership • 58.8% market share in distributed automated quality software – IDC, “Worldwide Distributed Automated Software Quality Tools 2005-2009 Forecast and 2004 Vendor Shares,” Doc #33771, Jul 2005 • 77% market share in performance testing – “Application Load Testing Market Is Poised for Growth” by George Hamilton, July 2005, Yankee Group Accelerated time to value • Rapid deployment through managed service deployments or packaged solution offerings

  48. Thank-You!Samu LehikoinenHP Software

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