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Outsourcing Requirements

Discovery

Tips and Traps for the Senior Project Manager

Keith Ellis

Sr. Vice President

IAG Consulting

1 800-209-3616

[email protected]

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What Are We Going to Talk About?

• FACTS!

• A model for assessing performance

• Strategic projects – where automation is involved

• Positive actions to help you be proactive

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Who is IAG Consulting?

• We are solely focused on business and software requirements discovery and management

• Core Competency: Elicitation

• A deliverable from IAG is:Clear, Accurate and Complete

• Work with clients in 4 modes:• Requirements Discovery and Management

• Analyst Professional Development

• Best Practices Implementation

• Turn-key Center of Excellence

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About IAG:

14 Years of living requirements excellence:

• Completed over 1,200 requirements projects

• Worked with over 300 of the Fortune 500 companies

• Trained well over 15,000 analysts

• Somewhat in excess of 700 clients using our methods

• 50 staff members all 100% focused on business requirements

• Annually invested 10% of our revenue in developing our methods, processes and techniques to assure that these are harmonized and industry best practices

• Developers of the Requirements Discovery ProcessTM

• Developed Xtreme AnalysisTM for agile and XP development method

http://programs.rational.com/partner/SearchResults_Company.cfm?CMP=1903

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Learning Objectives

• Effective engagement models that drive value

• Red flags in the review cycle – Signals that you

will have problems

• Setting targets for timetable and turnaround –

what are the metrics of outsourcing

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Why Outsource

Requirements

Discovery?

Getting an Effective Engagement Model for Outsourcing

Requirements Discovery Starts with a Personal

Question…

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Asking:

Why Outsource

Requirements

Discovery?

1. Set your business objectives…

2. Be frank about the strengths and weaknesses of your organization…

3. Know the project impact you want to achieve…

Determines:What is the effective

model for us to use?

To Determine the Right Model:

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Business Objectives

Determine the focus of your vendor Discussion to Tune

the Engagement

Your Business Objectives

(Single Project)

Tune the Engagement

Cardinal Rule: Success to the PMO (in this project) means what?

Complex stakeholder issues Requirements discovery plan

Mentoring the organization Training & development capabilities

Achieve a high degree of process change Facilitation approachReduce project risk (past quality issues) Standard deliverable content

Deal with a problem project Skill with similar complexity projects

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Case Study: Global Food Manufacturer• Implement major change to the business model/Deal with complex

project

• Reduce order to delivery from 7 days to 36 hours

• Transform supply-chain management, traffic and transport, CRM, production planning, forecasting, marketing, and sales operations

• Reduced number of warehouse inventory touch points from 11,000 to 2,000

• Engaged IAG at the pre-project scoping stage to drive project momentum

• Led facilitation for total redesign of warehouse and inventory management processes

• 2 weeks to scope project: carved into 12 complex projects to be run by IAG

• IAG executed on detailing the business and software requirements for the 12 projects taking 1 to 3 weeks for each.

“You know that list of 7 high priority issues… I don’t think we’d have caught number 2 until testing, and I figure number 5 wouldn’t have been

caught at all. Thanks, you guys just saved us a few million.” SVP Operations

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Being Frank about Strengths and Weaknesses Determines

the SCOPE of your contract

Scope

& Plan

Business

Requirements

Discovery

Detailed

Specification

Preparation

Manage

Requirements

Validate

Requirements

Delivery

Discovery

Session

Facilitation

Skill

Requirement

Elaboration

Process &

Capability

IT Requirement

Management

Practices

Testing/QC

Facility

Possible

hand-off

point

Possible

hand-off

point

Possible

hand-off

point

Possible

hand-off

point

Possible

hand-off

point

Organize

Stakeholders

& determine

scope of

analysis

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Example Engagement Model

Michigan Department of Transport

Scope

& Plan

Business

Requirements

Discovery

Detailed

Specification

Preparation

Possible

hand-off

point

Possible

hand-off

point

Discovery

Session

Facilitation

Skill

Requirement

Elaboration

Process &

Capability

Possible

hand-off

point

IT Requirement

Management

Practices

Not complex

for IAG – did

over phone

2 weeks –

facilitated group

session, 1

location

6 weeks – trace

and document

all variations,

business rules

etc.

• $1 million client-side

spend

• SafeStat: Monitor

and track the

progress of traffic

and safety projects

• Wanted to test –

“What happens if

we drive far better

quality requirements

into our

development

process?”

Possible

hand-off

point

Organize

Stakeholders

& determine

scope of

analysis

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Case Study: Michigan DOT

• RFP – Outsourced Development

• SafeStat: Monitor and track the progress of traffic and safety

projects

• RFP responses from domestic vendors were +/- $30K (IBM,

EDS, etc)

• Able to use precision in requirements to secure performance

guarantees

• Brought project in 33% under budget

• Reduced ongoing maintenance costs

“Without this process, we would have spent the entire $1m we had budgeted. Plus, we may have encountered scope

creep that could have pushed the costs up even higher”

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Keys to Success

• Be frank about your organizational capability at

the hand-off point

• Strengthen the hand-off points with tuning of

deliverables or additional vendor activities

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Know the Project Impact you Want to

Achieve through Outsourcing

• Better Quality

• Faster

• Cheaper

(clear, accurate, complete)

(More efficient use of time

for all stakeholders)

(requirements + development)

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Measuring Requirements Quality

• Look at sample deliverables:

Is it as good or BETTER than

your current standard?

• Look at the content: Does the

content capture process flow,

data flow business rules in

addition to structured

statements of system

capability?

• Investigate the elicitation

process: how does it engage

stakeholders to bring them to

consensus?

Vendor Assessment PointsReduction in Changes to Requirements

Pre-IAG Consulting Post-IAG Consulting

Source: IAG Performance Benchmark, 2002

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Be Faster: Make more efficient Use of

People’s Time

Total Time Needed to Complete

Requirements


• Average project (client side spend of

about $1-$2 Million) should be 1 to 2

weeks to get to a mid-level use case

in detail.

• When in front of stakeholders, should

be able to elicit and document about

20 to 30 use cases a week to a mid-

level use case detail.

• Should be able to do project

estimation +/- 10% for elicitation

based on reasonable understanding of

scope.

Targets for Turnaround


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Cost

Reduction in Total Development Cost


0 % 1 0 % 2 0 % 3 0 % 4 0 % 5 0 % 6 0 % 7 0 % 8 0 % 9 0 % 1 0 0 %

Definition

10.0%Analysis13.1% Design

15.8%

Coding23.0% Systems/

Integration Testing10.3%

AcceptanceTest 6.7%

Documentation5.4%

Implementation7.1%

Support8.5%

Source: META Group, 2003 Worldwide IT Benchmark Report

Average Project Spending by Phase


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There is a Steep Premium to be Paid for Poor Quality

Requirements

Premium

paid

BUSINESS REQUIREMENTS PREMIUM*

N=109

Source: IAG Business Analysis Benchmark, 2008

* Average increase in the overrun on time or cost versus projects that used high quality requirements

1 52 3 4

Low Quality

Requirements

High Quality

Requirements

0%

10%

20%

30%

40%

50%

60%

70%

Time

Budget

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Assessing Project Impact when Outsourcing

Business Requirements

Better

Faster

Cheaper

How do you assess the project impact?

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ScoreCard Excellent Average

Quality •

Efficiency

(speed) •

Cost

•

Keep the metrics simple for this example

Can measure in layman terms

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ScoreCard Excellent Average

Quality

• At or better than the best

requirements document you

can find internally.

• Got consensus

• Looks like the average

requirements document you

can find internally.

• Consensus took a while to get.

Efficiency

(speed)

• +/- 1 day of estimate for

reqm’ts

• Project delivered on-time

• Stakeholders participated

• Under typical time over-run

• Had to go back to the

stakeholders 3 or 4 times.

Cost

• +/- 3% of plan for reqm’ts

• < 23.1% of total project for

requirements versus budget

• Total project cost estimate (set

after detailed requirements)

varied more than 20% from

final delivery cost

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Summarize:

Elements of The Engagement Model

Ask the question – Why outsource?

• Business Objectives: Tune the engagement

• Strengths & Weaknesses: Determine scope

• Know the Impact: Have a Score Card

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Red FlagsHow do you know you’re about

to get into trouble… 3 Critical

Issues to Assess

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Red Flag #1: Ability to Scope the amount of effort

needed for requirements on a project that is very

ambiguous

Process for setting scope of analysis should be formal and adaptive:

• Scoping session

• Requirement work plan (schedule for stakeholders)

• Requirement Plan• Stakeholders

• Scope/Estimate of time

• Strategy

• Tools (technologies involved)

• Level of detail in documentation

• Documents to be produced

• Formats for documents

• Special needs on chart types

• Etc.

The Relationship Between Scope

Control and Elicitation Skills

• Having very poor elicitation

capabilities, will likely lead to very

poor scope control (55% of cases)

• Analysts which excel at elicitation

will also have excellent scope

definition and control in 95% of

projects

• Companies excelling at both were successful in 80% of projects

N=109


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RED FLAG #2: You’re not sure every member of the

requirements discovery team will be BOTH excellent and

using a common methodology

0%

5%

10%

15%

20%

25%

1-10 11-20 21-30 31-40 41-50 51-60 61-70 71-80 81-90 91-100

Skill Level - Measured on a scale of 1-100 (12 underlying competencies)

N=109


Average competency in

requirements discovery for

companies that reported their

project +/- 10% of estimated

time, +/- 10% of estimated

budget, and on function

Average 190% of budget

A

“Good”

BA

Team

Used

Every member

of the team

needs to be in

this zone

AVERAGE BA Skill Used

58

Average

121% of

budget

Average

163% of

budget

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Red Flag #3: Approach proposed does not

adequately discover data flow and document

interdependencies

9.4%

25.0%

46.9%

18.8%

0.0%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Project is

failure or

almost failure

Project is

neither

successful

nor

unsuccessful

Project is

Unqualified

Success

Projects with Poor Quality in these Three Areas

0.0% 1.5%

46.3%

38.8%

13.4%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Project is

failure or

almost failure

Project is

neither

successful

nor

unsuccessful

Project is

Unqualified

Success

When Companies Eliminate Poor Quality in these Three Areas

Companies that DID NOT focus on

Interdependencies, Data Flow &

Having Unambiguous Objectives


Companies that DID focus on

Interdependencies, Data Flow &

Having Unambiguous Objectives

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Closing Thoughts

1. Set your business objectives…

2. Be frank about the strengths and weaknesses of your organization…

3. Know the project impact you want to achieve…

BUT:

Outsourcing effectively requires only that you:

1. Set a scorecard for yourself to measure outcome

2. Be wary… and have a clear measuring stick when assessing companies

3. Make sure the approach taken leads to CLEAR, ACCURATE and

COMPLETE requirements

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Recap: Learning Objectives

• Effective analyst engagement models that

drive value

• Red flags in the review cycle

• Setting targets for timetable and turnaround

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Typical next steps

• 1:1 conversations about your projects

• Start leveraging the IAG assets to help you

with your stakeholders

• Let us help you scope the business

analysis effort

• Tell us about your ugly ducklings

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Thanks

Keith Ellis

Sr. Vice President

IAG Consulting

1-800-209-3616

[email protected]

PDU Information:

PMI REP: 2858

Course: Outsourcing Requirements Discovery

Course #: IAG807