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息 LOCRIS Limited 2006息 LOCRIS Limited 2006
Uses and Abuses of ITUses and Abuses of IT
BenchmarkingBenchmarking
Outsourcing and ProcessOutsourcing and Process
ImprovementImprovement
John L. Evans John L. Evans  FCMI FIMC FIMIS MBCS CITP MID CIPSFCMI FIMC FIMIS MBCS CITP MID CIPS
Director  LOCRIS LimitedDirector  LOCRIS Limited
Software
Measurement and
2
息 LOCRIS Limited 2006息 LOCRIS Limited 2006
LOCRISLOCRIS
 DWPDWP
 Cap GeminiCap Gemini
 RS ComponentsRS Components
 Royal & SunAllianceRoyal & SunAlliance
 AXAAXA
 AT&TAT&T
 The PruThe Pru
 Wincor NixdorfWincor Nixdorf
 WoolworthsWoolworths
 Centrica / British GasCentrica / British Gas
 British Energy  PETBritish Energy  PET
 BTBT
 BABA
 Rover GroupRover Group
 BBCBBC
 Boots The ChemistBoots The Chemist
 LIFFELIFFE
 BNP ParibasBNP Paribas
 BSiBSi
 BG plc  TranscoBG plc  Transco
 SEMA GroupSEMA Group
 Legal Aid BoardLegal Aid Board
 Legal & GeneralLegal & General
 UK National LotteryUK National Lottery
 PA ConsultingPA Consulting
 United UtilitiesUnited Utilities
 GlaxoGlaxo
 INMARSATINMARSAT
 BACSBACS
Software
Measurement and
3
息 LOCRIS Limited 2006息 LOCRIS Limited 2006
Is there really value inIs there really value in
Outsourcing your issues?Outsourcing your issues?
 Outsourcing - a short cut to improvement?Outsourcing - a short cut to improvement?
 suppliers and their promisessuppliers and their promises
 customer's termscustomer's terms
 governance and objectivitygovernance and objectivity
 how will you ever knowhow will you ever know
 benchmark databenchmark data
 the ability to rapidly realise benefitsthe ability to rapidly realise benefits
Software
Measurement and
4
息 LOCRIS Limited 2006息 LOCRIS Limited 2006
"When you can measure what you"When you can measure what you
are speaking about, and express itare speaking about, and express it
in numbers, you know somethingin numbers, you know something
about it; but when you cannotabout it; but when you cannot
measure it, when you cannotmeasure it, when you cannot
express it in numbers, yourexpress it in numbers, your
knowledge is of a meagre andknowledge is of a meagre and
unsatisfactory kind; it may be theunsatisfactory kind; it may be the
beginning of knowledge, but youbeginning of knowledge, but you
have scarcely in your thoughtshave scarcely in your thoughts
advanced to the state of Science,advanced to the state of Science,
whatever the matter may be." -whatever the matter may be." -
Lord KelvinLord Kelvin
Software
Measurement and
5
息 LOCRIS Limited 2006息 LOCRIS Limited 2006
IT performance measuresIT performance measures
ineffectiveineffective John Riley 23 May 2006John Riley 23 May 2006
 current measures ineffectivecurrent measures ineffective
 fewer measuresfewer measures
 stop measuring cost and activitystop measuring cost and activity
 measure efficiency, output and outcomemeasure efficiency, output and outcome
 no value in value-add or ROIno value in value-add or ROI
 IT cost vs profit or turnoverIT cost vs profit or turnover
 cost reduction not a good indicatorcost reduction not a good indicator
Software
Measurement and
6
息 LOCRIS Limited 2006息 LOCRIS Limited 2006
IT performance measuresIT performance measures
ineffectiveineffective John Riley 23 May 2006John Riley 23 May 2006
 IT is (generally) not a revenue generatorIT is (generally) not a revenue generator
 IT provides things that cant be measuredIT provides things that cant be measured
 fewer, more effective measuresfewer, more effective measures
 dont leave a vacuumdont leave a vacuum
 others will set measurements for youothers will set measurements for you
 communicate with peerscommunicate with peers
 link to organisational objectiveslink to organisational objectives
 be credible to the top teambe credible to the top team
Software
Measurement and
7
息 LOCRIS Limited 2006息 LOCRIS Limited 2006
Scenario 1Scenario 1
 Suppose:Suppose:
 450 AMS / Development staff450 AMS / Development staff
 贈25M / annum cost base贈25M / annum cost base
 Demanding, rapidly changingDemanding, rapidly changing
organisation and customers (users)organisation and customers (users)
 Morbidity in the departmentMorbidity in the department
 No performance dataNo performance data
Software
Measurement and
8
息 LOCRIS Limited 2006息 LOCRIS Limited 2006
Scenario 2Scenario 2
 Suppose:Suppose:
 450 AMS / Development staff450 AMS / Development staff
 贈25M / annum cost base贈25M / annum cost base
 Demanding, rapidly changingDemanding, rapidly changing
organisation and customers (users)organisation and customers (users)
 Morbidity in the departmentMorbidity in the department
 Existing performance data  functionExisting performance data  function
point analysis going back some yearspoint analysis going back some years
Software
Measurement and
9
息 LOCRIS Limited 2006息 LOCRIS Limited 2006
ConsiderConsider
 2 scenarios2 scenarios
 Without performance dataWithout performance data
 With performance dataWith performance data
Software
Measurement and
10
息 LOCRIS Limited 2006息 LOCRIS Limited 2006
Once Upon a TimeOnce Upon a Time
 A companyA company
 With 5 years performance dataWith 5 years performance data
 UnhappyUnhappy
 Outsourced  because it didnt knowOutsourced  because it didnt know
how to improvehow to improve
Software
Measurement and
11
息 LOCRIS Limited 2006息 LOCRIS Limited 2006
The DreamThe Dream
 From day 1:From day 1:
 25% improvement in year 125% improvement in year 1
 Progressing to upper quartileProgressing to upper quartile
 From a standing startFrom a standing start
Software
Measurement and
12
息 LOCRIS Limited 2006息 LOCRIS Limited 2006
The RealityThe Reality
 Productivity  20% down in year 1Productivity  20% down in year 1
 And year 2And year 2
 Par by year 3Par by year 3
 Improving byImproving by
Software
Measurement and
13
息 LOCRIS Limited 2006息 LOCRIS Limited 2006
Sadness AboundsSadness Abounds
 The QueenThe Queen
shouted at theshouted at the
KnightKnight
 The KnightThe Knight
Laughed at Queen!Laughed at Queen!
 The Knight had aThe Knight had a
ContractContract
 What could theWhat could the
Queen do?Queen do?
Software
Measurement and
14
息 LOCRIS Limited 2006息 LOCRIS Limited 2006
The Happy EndingThe Happy Ending
 With Performance Data enabled:With Performance Data enabled:
 measurement of the actual changemeasurement of the actual change
 measurement of the actual lossmeasurement of the actual loss
 prediction of the actual prognosisprediction of the actual prognosis
 Renegotiation of the contractRenegotiation of the contract
 achievement of the intended savings /achievement of the intended savings /
productivity improvementsproductivity improvements
 stay out of courtstay out of court
Software
Measurement and
15
息 LOCRIS Limited 2006息 LOCRIS Limited 2006
Enlightenment?Enlightenment?
Software
Measurement and
16
息 LOCRIS Limited 2006息 LOCRIS Limited 2006
MineseekerMineseeker
 It will take hundreds ofIt will take hundreds of
years and 贈B to clearyears and 贈B to clear
 70 countries affected70 countries affected
 Man takes a day to surveyMan takes a day to survey
404022
mtrsmtrs
 Mineseeker airship take 1Mineseeker airship take 1
second to survey 100second to survey 10022
mtrsmtrs
 www.mineseeker.comwww.mineseeker.com

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  • 1. 息 LOCRIS Limited 2006息 LOCRIS Limited 2006 Uses and Abuses of ITUses and Abuses of IT BenchmarkingBenchmarking Outsourcing and ProcessOutsourcing and Process ImprovementImprovement John L. Evans John L. Evans FCMI FIMC FIMIS MBCS CITP MID CIPSFCMI FIMC FIMIS MBCS CITP MID CIPS Director LOCRIS LimitedDirector LOCRIS Limited
  • 2. Software Measurement and 2 息 LOCRIS Limited 2006息 LOCRIS Limited 2006 LOCRISLOCRIS DWPDWP Cap GeminiCap Gemini RS ComponentsRS Components Royal & SunAllianceRoyal & SunAlliance AXAAXA AT&TAT&T The PruThe Pru Wincor NixdorfWincor Nixdorf WoolworthsWoolworths Centrica / British GasCentrica / British Gas British Energy PETBritish Energy PET BTBT BABA Rover GroupRover Group BBCBBC Boots The ChemistBoots The Chemist LIFFELIFFE BNP ParibasBNP Paribas BSiBSi BG plc TranscoBG plc Transco SEMA GroupSEMA Group Legal Aid BoardLegal Aid Board Legal & GeneralLegal & General UK National LotteryUK National Lottery PA ConsultingPA Consulting United UtilitiesUnited Utilities GlaxoGlaxo INMARSATINMARSAT BACSBACS
  • 3. Software Measurement and 3 息 LOCRIS Limited 2006息 LOCRIS Limited 2006 Is there really value inIs there really value in Outsourcing your issues?Outsourcing your issues? Outsourcing - a short cut to improvement?Outsourcing - a short cut to improvement? suppliers and their promisessuppliers and their promises customer's termscustomer's terms governance and objectivitygovernance and objectivity how will you ever knowhow will you ever know benchmark databenchmark data the ability to rapidly realise benefitsthe ability to rapidly realise benefits
  • 4. Software Measurement and 4 息 LOCRIS Limited 2006息 LOCRIS Limited 2006 "When you can measure what you"When you can measure what you are speaking about, and express itare speaking about, and express it in numbers, you know somethingin numbers, you know something about it; but when you cannotabout it; but when you cannot measure it, when you cannotmeasure it, when you cannot express it in numbers, yourexpress it in numbers, your knowledge is of a meagre andknowledge is of a meagre and unsatisfactory kind; it may be theunsatisfactory kind; it may be the beginning of knowledge, but youbeginning of knowledge, but you have scarcely in your thoughtshave scarcely in your thoughts advanced to the state of Science,advanced to the state of Science, whatever the matter may be." -whatever the matter may be." - Lord KelvinLord Kelvin
  • 5. Software Measurement and 5 息 LOCRIS Limited 2006息 LOCRIS Limited 2006 IT performance measuresIT performance measures ineffectiveineffective John Riley 23 May 2006John Riley 23 May 2006 current measures ineffectivecurrent measures ineffective fewer measuresfewer measures stop measuring cost and activitystop measuring cost and activity measure efficiency, output and outcomemeasure efficiency, output and outcome no value in value-add or ROIno value in value-add or ROI IT cost vs profit or turnoverIT cost vs profit or turnover cost reduction not a good indicatorcost reduction not a good indicator
  • 6. Software Measurement and 6 息 LOCRIS Limited 2006息 LOCRIS Limited 2006 IT performance measuresIT performance measures ineffectiveineffective John Riley 23 May 2006John Riley 23 May 2006 IT is (generally) not a revenue generatorIT is (generally) not a revenue generator IT provides things that cant be measuredIT provides things that cant be measured fewer, more effective measuresfewer, more effective measures dont leave a vacuumdont leave a vacuum others will set measurements for youothers will set measurements for you communicate with peerscommunicate with peers link to organisational objectiveslink to organisational objectives be credible to the top teambe credible to the top team
  • 7. Software Measurement and 7 息 LOCRIS Limited 2006息 LOCRIS Limited 2006 Scenario 1Scenario 1 Suppose:Suppose: 450 AMS / Development staff450 AMS / Development staff 贈25M / annum cost base贈25M / annum cost base Demanding, rapidly changingDemanding, rapidly changing organisation and customers (users)organisation and customers (users) Morbidity in the departmentMorbidity in the department No performance dataNo performance data
  • 8. Software Measurement and 8 息 LOCRIS Limited 2006息 LOCRIS Limited 2006 Scenario 2Scenario 2 Suppose:Suppose: 450 AMS / Development staff450 AMS / Development staff 贈25M / annum cost base贈25M / annum cost base Demanding, rapidly changingDemanding, rapidly changing organisation and customers (users)organisation and customers (users) Morbidity in the departmentMorbidity in the department Existing performance data functionExisting performance data function point analysis going back some yearspoint analysis going back some years
  • 9. Software Measurement and 9 息 LOCRIS Limited 2006息 LOCRIS Limited 2006 ConsiderConsider 2 scenarios2 scenarios Without performance dataWithout performance data With performance dataWith performance data
  • 10. Software Measurement and 10 息 LOCRIS Limited 2006息 LOCRIS Limited 2006 Once Upon a TimeOnce Upon a Time A companyA company With 5 years performance dataWith 5 years performance data UnhappyUnhappy Outsourced because it didnt knowOutsourced because it didnt know how to improvehow to improve
  • 11. Software Measurement and 11 息 LOCRIS Limited 2006息 LOCRIS Limited 2006 The DreamThe Dream From day 1:From day 1: 25% improvement in year 125% improvement in year 1 Progressing to upper quartileProgressing to upper quartile From a standing startFrom a standing start
  • 12. Software Measurement and 12 息 LOCRIS Limited 2006息 LOCRIS Limited 2006 The RealityThe Reality Productivity 20% down in year 1Productivity 20% down in year 1 And year 2And year 2 Par by year 3Par by year 3 Improving byImproving by
  • 13. Software Measurement and 13 息 LOCRIS Limited 2006息 LOCRIS Limited 2006 Sadness AboundsSadness Abounds The QueenThe Queen shouted at theshouted at the KnightKnight The KnightThe Knight Laughed at Queen!Laughed at Queen! The Knight had aThe Knight had a ContractContract What could theWhat could the Queen do?Queen do?
  • 14. Software Measurement and 14 息 LOCRIS Limited 2006息 LOCRIS Limited 2006 The Happy EndingThe Happy Ending With Performance Data enabled:With Performance Data enabled: measurement of the actual changemeasurement of the actual change measurement of the actual lossmeasurement of the actual loss prediction of the actual prognosisprediction of the actual prognosis Renegotiation of the contractRenegotiation of the contract achievement of the intended savings /achievement of the intended savings / productivity improvementsproductivity improvements stay out of courtstay out of court
  • 15. Software Measurement and 15 息 LOCRIS Limited 2006息 LOCRIS Limited 2006 Enlightenment?Enlightenment?
  • 16. Software Measurement and 16 息 LOCRIS Limited 2006息 LOCRIS Limited 2006 MineseekerMineseeker It will take hundreds ofIt will take hundreds of years and 贈B to clearyears and 贈B to clear 70 countries affected70 countries affected Man takes a day to surveyMan takes a day to survey 404022 mtrsmtrs Mineseeker airship take 1Mineseeker airship take 1 second to survey 100second to survey 10022 mtrsmtrs www.mineseeker.comwww.mineseeker.com