Fortune 500 - Heavy Burden on Existing Processes

Customer Profile
Information Technology (IT) department for a top five Property and Casualty insurance provider in Canada (and Fortune 500 member).

Challenge
The IT department of a Fortune 500 company (250 staff) was experiencing significant problems. Through several iterations and attempts to implement various process management frameworks and governance they had become over-saturated in process and process management. One third of the project teams were applying practices of the SEI/CMMI, and were deemed to be living in "the world of academia". One third of the project teams were semi-applying a hybrid form of CoBit - they recognized that some form of methodology was required but were not prepared or interested in the full-blown and disciplined SEI/CMMI world. They viewed themselves as the "conscientious worker bees" and were not ready to take the initiative. The other third of the organization had thrown up their hands in defeat and were designing, constructing, testing and implementing applications on the fly without internal client approval. These workers took great pride in their reputation as "the cowboys".

As these various application delivery models were applied, it became evident that consistent delivery across the department was not possible. Without a consistent delivery model there was no way to predict and implement application delivery schedules and costs. Without a consistent delivery model, organizational governance and quality were inadequate. Without a consistent delivery model, metric and measurement information was unavailable or irrelevant. Without a consistent delivery model, project risks and issues, as well as re-work, increased to the point that the rest of the organization had no confidence that they could effectively deliver.
 
The development side of the IT Department was being assessed for its ability to consistently deliver operational efficiency across the organization. They knew that the only way to make things more effective was to harmonize the IT delivery capability; they needed to do something smarter.

Solution
QAIassist Snapshot was deployed to determine the IT operational areas that were inefficient. The results indicated that there was a particular weakness in the area of project management. Schedules were not being prepared or monitored. Nor was the project status being communicated to project stakeholders. Other inefficiencies existed as well. Immediate relief (bang for buck) would come from introducing a number of PM processes into the organization.

The results of the QAIassist Snapshot exercise were communicated to IT project teams and an internal project team (cross functional) was created to define and implement the solution. The project team utilized the QAIassist Headstart processes  (Project Management specific) to kickstart the development of their new processes. Using the structure of the Headstart tool, the project team was able to incorporate many of their existing practices while leveraging the pre-defined Headstart processes. Once the new system was introduced, the project team was able to develop and deliver training material based a more efficient methodology.

Results
As a result of implementing their new processes, the IT organization now has a consistent delivery model which they apply to deliver applications/projects. The new delivery model provides more consistent delivery costs and timeliness for all projects.

Tangible Benefits
Prior to implementing the solution, it was estimated that the IT department or this company was delivering an average of 4 new applications per year (total function point average for new applications of 15,000) as well as delivering addition functionality to existing applications  (total function point average for existing applications of 10,000). The total function point count total of 25,000 divide by the 250 staff of the department provide a function point quotient (average number of function points per staff) of 100. At an average annual salary of  $60,000 per IT staff this translated into a productivity factor of  .00167.

Upon implementing the solution, the IT department was delivering an average of 6 new applications per year (total function point average for new applications of 22,000) as well as delivering addition functionality to existing applications  (total function point average for existing applications of 18,000). The function point count of 40,000
(divided by the 250 staff of the department) provided a function point quotient (average number of function points per staff) of 160. At an average annual salary of $60,000 per IT staff, this translated into a productivity factor of  .00267.

Intangible Benefits
Several by-products have been gained by implementing this solution.

First, as part of the solution (project management processes), the project team incorporated the identification and collection of metrics for the process. In this way, both the result and the projects can be measured during implementation and upon completion.

Second, by virtue of having implemented a consistent delivery model, the organization was able to introduce a corporate "QA/ Governance" function, and in this way they could monitor how the project management was being performed by all of the project teams.
 
Utilizing QAIassist Snapshot and Headstart, the organization now routinely delivers quality applications on time and within budget and the user community is very pleased with the applications, maintenance and support being delivered by the IT organization.

ROI Analysis
The annual productivity factor increased from .00167/per employee to .00267/per employee.

The annual IT resource budget remained constant at $15,000,000 (250 X $ 60,000). However, the solution has enabled the existing staff to deliver an additional 15,000 function points. Due to the increasing demand for added functionality (existing operations and new legislative functionality), the organization successfully delivered the added functionality without having to increase its IT staff.

By increasing the average function points per staff by 60 (from 100 to 160) points - the IT department increased its productivity by 37.5 %. This increase in productivity saved the company from having to hire an additional 93 staff, translating into savings of  $ 5,580,000.

The cost to implement the solution was $ 1,008,000 - 6 consultants for a period of 8 months (21 days per month) at a rate of $1000 per consultant/per diem.