Setting the Scene

© 2008 Hewlett-Packard Development Company, L.P.The information contained herein is subject to change without notice

Quality Management –Justifying Investments

Samu LehikoinenSolution ArchitectHP Software Finland


Setting the Scene

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.

APPLICATIONS OPERATIONSSTRATEGY

Business Outcomes

HP Software’s lifecycle approach to BTOOptimize IT efficiency and business value

Business &IT Services

BusinessNeeds

Automate end-to-end processesShare information and tools

Make right spending decisions

Deliver on time

Meet business SLAs

HP SOFTWARELIFECYCLE APPROACH

APPLICATIONS OPERATIONSSTRATEGY

Business Outcomes

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

Optimize business alignment by prioritizing utilization of IT resources –

capital, people and assets – inline with business priorities

Service lifecycleOptimize the services IT delivers to the lines of business

Project & Portfolio

Management Center

QualityCenter

PerformanceCenter

Business Availability Center

Service Management CenterChange & Configuration

Center

Operations CenterNetwork Management

Center

Application SecurityCenter

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.

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

Problem statement (Business 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?

36

Problem statement – QA Team Viewpoint

…throughout the Application lifecycle…


IT, Applications

and Business

Value Viewpoint

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

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 28.10.2008Taloussanomat 28.10.2008

… Post-Disaster Assessment


“40% of unplanned downtime is

caused 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

Ongoing Change Adds to the Problem …

Apr 12th, 12 noonInvoice module

not working; expensivemanual process instituted

Apr 19th, 1 amMaintenance team finally produces

patch that is expected to fixthe invoice module

Apr 12th, 1amMajor Application Update Rolled out

GoLive

Apr 19th, 12 noonPatch brings down

entire finance system

31

What is the Business Impact?

ReworkCosts

ReworkCosts

BrandDamageBrand

Damage

Loss of Existing

Customers

Loss of Existing

CustomersLoss of Potential

Customers

Loss of Potential

Customers

StaffMoraleStaff

Morale

Loss of RevenueLoss of Revenue

TriageCostsTriageCosts


Most IT organisations are focused on

what goes on inside the

IT organization.

29

They manage IT outcomes.

29

“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

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.

The questions remaining for QA …

27


How do we justify the QA

effort or investment ?


How do we communicate

Business Risk?


How Can I get to Home ?


How do we optimize QA

efforts ?

Application Layer

Infrastructure Layer

Development Production

ACCRUECOST

TA

KE R

ISKPROVIDE VALUE

26

Application Layer



REDUCECOST

TA

KE M

OR

E R

ISK

PROVIDE VALUE

25

Application Layer



INCREASECOST

TA

KE L

ES

S R

ISK

PROVIDE VALUE

Where is the ideal trade-off point?24

Where Are Defects Detected?

Req Dev Test Prod

3.5%

16.5%

59.5%

20.5%

Source: NIST 2002 RTI Project 7007.011

19

Req Dev Test Prod

Actual Cost

Costof

Defects

Req Dev Test Prod

Where Defects Are Detected

The Value of Fixing Defects Early

Req Dev Test Prod

Where Defects Are Introduced

Req Dev Test Prod

Relative Cost to Fix

Ideal Cost


X X

16

Req Dev Test Prod


The Value of Fixing Defects Early

Req Dev Test Prod


Req Dev Test Prod


Req Dev Test Prod

Actual Cost

Costof

Defects

Ideal Cost


X XPotentialValue ofEarlierTesting

15

Req Dev Test Prod


But Are You Measuring This?

Req Dev Test Prod


Req Dev Test Prod



? ? ?

14

Application Layer



ACCRUECOST

TA

KE R

ISK

PROVIDE VALUE

With the right approach …

13

Application Layer



REDUCECOST

TA

KE L

ES

S R

ISK

PROVIDE VALUE

… we can achieve this!

13


HP QM Approach

The Real Lifecycle of an Application

Plan DefineBuild

& TestLaunch Operate

NewDeployment or Major Upgrade

Full Quality process

Fix/ patch

Fix/ patch

Fix/ patch

Minor release

Minor release

Focus on fast turnaround

12

Bu

sin

ess S

erv

ice

Value provided to the business

Application Layer



ALM (as defined by certain industry experts)

Alternative view of ALM

ITIL Version 2

ITIL Version 3

HP Application LifecycleHP BTO

7

Ensuring quality of service-based applicationsThe future holds even greater risk

“Quote to cash”End-to-end business process

J2EE

SOA shared service library

Three Critical Pillars of Quality

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?

21


HP QM Approach ExamplesFunctional

Testing


Justifying investments:

Quantifying the Value of Quality

Assurance

HP Quality Model

Quality andperformance authority

Stage 4

Enforce and improve quality and performance standards across

the enterprise

Service utility

Stage 3

Centralized personnel help improve project

quality and performance

Product utility

Stage 2

Centralized product

available as a shared service

Project testing

Stage 1

Perform testing of individual

projects

ROIROI

ROIROI

Hardware and software

consolidation

Leverage Expertise

Enterprise impact

More efficient delivery of

applications into

production

The move toward centralized quality assurance

Value PropositionsAlign

InitiativesChallenges(Anecdotes)

InfrastructureBusiness

Applications

Discover

Benefit Models(ROI Scenarios)Model

Demand / CostModels

Customer Data

ROIResult

Deliver

Business Case Package

Building Business Case - HP’s Process

Examples Quantifiable value propositions

Reduce the level of effort associated with:

• Requirements management

• Test coverage management

• Test management

• Defect management

• Test automation

• Status reporting

Minimize cost(efficiency gains)

Reduce risk of application defects, leading to:

• Lower rework costs• Lower support costs• Fewer end user

minutes lost (end user productivity)

• Revenue protection• SLA or regulatory

non-compliance

Mitigate risk (quality

improvement)

Get revenue producing applications to market faster

Minimize time(faster time to

value)

Quality assurance

Example - Benefits Summary

Benefits Summary Year 1 Year 2 Year 3 Total

Total Benefits 74.022€ 197.193€ 283.295€ 554.510€

IT Cost Reductions

Configuration Management Process Efficiency 27.311€ 72.756€ 104.524€ 204.592€

Incident Management Process Efficiency 16.680€ 44.437€ 63.839€ 124.956€

Automated Relationship Mapping Process Efficiency

11.754€ 31.312€ 44.983€ 88.048€

Change Management Process Efficiency 10.922€ 29.096€ 41.800€ 81.818€

Availability Management Process Efficiency 5.566€ 14.827€ 21.301€ 41.694€

Service Level Management Process Efficiency 1.789€ 4.766€ 6.847€ 13.403€

Total IT Cost Reductions 74.022€ 197.193€ 283.295€ 554.510€

Business Operating Efficiency

Time to Value (Indirect) 0€ 0€ 0€ 0€

Compliance Penalty Risk Mitigation (Indirect) 0€ 0€ 0€ 0€

Mapping - Change Impact Risk Mitigation (Indirect)

0€ 0€ 0€ 0€

End User Outage Effect - Risk Mitigation (Indirect)

0€ 0€ 0€ 0€

Mapping - SOX Audit Efficiency (Indirect) 0€ 0€ 0€ 0€

Total Business Operating Efficiency 0€ 0€ 0€ 0€

Business Strategic Advantage

Total Business Strategic Advantage 0€ 0€ 0€ 0€

Direct Benefits 74.022€ 197.193€ 283.295€ 554.510€

Indirect Benefits 0€ 0€ 0€ 0€

Example - Benefits Summary

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• …

Ensuring application quality and business outcomesThe HP difference

• 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

Undisputed industry leadership

• Unparalleled support for your application environments

Greatest coverage of enterprise environments and platforms

• Rapid deployment through managed service deployments or packaged solution offerings

• Repeatable quality process designed to save time and cost over traditional approaches

• Ensures readiness of new application deployments and upgrades• Improves the speed and efficiency of quality efforts

Accelerated time to value

Quality methodology model

Lifecycle approach to quality


Thank-You!

Samu LehikoinenHP Software

Setting the Scene

Documents

Transcript of Setting the Scene