CMMI® – The Current State

Presented by Gregory SheltonCorporate Vice PresidentEngineering, Technology, Manufacturing & Quality

3rd Annual CMMI Technology Conference & User Group18 November 2003

Technology and Acquisition ChangesAre Driving CMMI• System complexity is ever increasing

– Moore’s law at the system scale

• Balance between Government and Industry associated with systems development is shifting without due diligence

• Network centric, spiral development, extension of system applications, are driving higher levels of integration

• High percentage of prime contractor costs are in Supply Chain

Integrating disciplines (Engineering, Supply Chain, Program Management) is needed for successful

program execution and predictability

CMMI Facilitates Development and Delivery ofComplex DoD Systems

Complex Systems/

System-of-Systems

Support CMMI Provides forMulti-Company Systems

• More Disciplined Systems Engineering Process

• Requirements Development

• Integration/Test

• Emphasis on Measurements for Decision Making in all Processes

• Common Vocabulary for describing Product Development Processes

• Increased Emphasis on Supply Chain as a Critical Discipline for Success

DD(X)

• Company-wide commitment at the top level of leadership• Deploying uniformly to all sites

– Leader/Follower sites

• Tying into IPDS and Raytheon Six Sigma– Sharing of best practices– Cultural Change

• Corporate-wide funding for key training and appraisal – Enterprise Steering team– Expert Consulting team

• Extending to hardware and other disciplines

Raytheon’s Approach to CMMI

Our mechanisms for process andtechnology enterprise integration

Capability Model Maturity Integration (CMMI) provides the

process requirements and appraisal methods for creating, measuring,

managing, and improving specific

processes.

Integrated Product Development System (IPDS) provides an

integrated set of best practices for the entire product development

life cycle through a program tailoring

process.

Raytheon Six Sigma guides us to use CMMI

and IPDS as tools to deliver value to customers

and integrate industry best practices.

Our technology will flourish with process discipline

Prod

uctiv

ity

FixPrograms

IntegratedSupply Chain

Raytheon’s Process Journey – Improving Productivity

CustomerFocused

Marketing

EVMS

HR Processes StrategicPlanning

Annual Operating

Plan

RISE *

* Raytheon Integrated Synthetic Environment

Innovation will flourish on the bedrock of discipline

Improvement is Evident to Our Shareholders and Customers

179 180

194

217

235

150

160

170

180

190

200

210

220

230

240

250

1999 2000 2001 2002 2003P

4-year CAGR = 7%($000)

Sales Per Employee

0.880.9

0.920.940.960.98

11.021.041.061.08

1.11.121.141.16

0.88 0.9 0.92 0.94 0.96 0.98 1 1.02 1.04 1.06 1.08 1.1 1.12 1.14 1.16

20002001

2002

1999 ??

Target Area

SPI

CPI

Earned Value Performance History

Example Recent Process Improvement Results

• Early defect containment rate increased by 100%. ROI of 6:1. Site now CMMI Level 3

• CMM Level 5 site reduced CPI variability by 32%; SPI variability by 67%

• CMMI Level 3 site reduced rework costs by 42% over several years

3.03.54.04.55.05.56.06.57.07.58.0

1999 2000 2001 2002 2003P

turn

s

Avg. Working Capital Turns (G&D)

1998 1999 2000 20022001 2003

IPDS/R6S/CMMI Deployment Across

RaytheonOVER

UNDER

AT

CO

ST

EARLYLATE ON-TIME

SCHEDULE

OVER

UNDER

AT

CO

ST

EARLYLATE ON-TIME

SCHEDULE

IPDS/R6S/CMMI: The Results !

In Summary

• Advances in technology and systems integration are driving CMMI implementation

• True adoption will improve our program performance in Cost, Schedule, and Risk

• CMMI at Raytheon involves our whole Enterprise with leadership support

• Raytheon has demonstrated productivity successes with the SW-CMM. Similar (greater) successes are expected with CMMI.

• CMMI is our model for process excellence and will be our Customers’ model