Martian Metrics

Mike HarrisI don’t often write blog posts here discussing works of fiction. But, my recent vacation was an opportunity to get through some non-business-related books for a change. For this audience, I’d like to pass along a recommendation, “The Martian,” by Andy Weir. There is a movie out (as of October 2nd), based on the book, but you should read the book first. Why? And why mention it here?

To start, it’s a well-written book. I enjoyed it so much that I read it in 48 hours (fast for me). Afterwards, I discussed it with my daughter, a mechanical engineer, who bought it for me, and she mentioned that some of her friends had complained that there was too much math in it.

My first reaction was incredulity – what math? There really wasn’t any! But I realized that, as an engineer, I had just processed the numbers automatically without thinking about the pain that others might feel.  

A lot of the main character’s (who is also a mechanical engineer) story is about developing hypotheses, working out ways to test those hypotheses, making estimates, measuring actuals and working out how to change plans based on the differences (negative or positive) between the estimates and actuals.

So, this is why I’m recommending this book to all of you. In the software industry, we rely on estimates to set realistic expectations regarding delivery costs and to appropriately allocate time and resources to the work. It’s interesting to see this type of situation play out in a different atmosphere – especially in space!

While it is a work of fiction, it was interesting to see business-related concepts collide with a compelling, fictional story.

If you read it, I hope you enjoy it! If you enjoy it and are having trouble getting your boss to understand the value of estimating and measuring actuals, have them read it too.

Mike Harris
DCG President

Written by Michael D. Harris at 05:00

Finding the Right Service-Level Measure

David HerronThere is a recent trend in outsourcing towards smaller, shorter-term deals and an increase in using multiple vendors (usually referred to as multi-sourcing). But, while outsourcing arrangements may be changing and customers continue to look for greater efficiencies, there is still much that remains the same in regards to contract governance challenges. Proper service-level measures are a necessary in outsourcing (and especially in multi-sourcing) contracts to mitigate such challenges.

Typically, these contracts are priced on the basis of labor cost. But an effective contract takes other dimensions into consideration as well. A successful outsourcing arrangement is one that delivers a high quality product that meets the needs of the business (value) for a reasonable price. Thus price, value and quality should serve as the focus.

If you're interested in learning more about these measures and how to create a successful outsourcing arrangement, download "Finding the Right Service-Level Measure in a Changing Outsourcing Landscape" here.

David Herron
VP, Software Performance Management

Written by David Herron at 05:00

Join DCG at ISMA 10!


We're excited to share that next week we'll be attending the 10th annual International Software Measurement & Analysis conference (ISMA), “Creating Value from Measurement."

As an industry leader in software analytics and software sizing, ISMA is a conference we look forward to attending every year. The conference, put on by the International Function Point Users Group (IFPUG), provides a forum to discuss the most recent advances in planning and sustaining measurement programs, from both practical and theoretical perspectives.

ISMA runs for four days - the conference portion of the event is held on the the 4th day. The first three days include workshops and a Certified SNAP Practitioner (CSP) exam.

We will host a workshop, "Applying Function Points to Emerging Business Technologies," on April 27-28th. This workshop will apply the latest IFPUG counting practices and rules in advanced situations and to a variety of technologies and environments, including Agile software development. This class will feature intensive instruction, lively conversation and hands-on practical application.

So there you have it! We'll have representatives at the conference all week. We look forward to learning more about how others are using function points and sharing our recent discoveries as well.

More information on the conference is available here. See you in Charlotte!

Written by Default at 05:00
Categories :

Common Pitfalls of Analytics

Mike Harris 2014The Baseline article, “11 Common Pitfalls of Analytics,” is an important one. The premise for the article is that if the analytics you’re tracking aren’t having a meaningful impact on your organizational strategy, then you’re running into some common issues – and you should remedy them.

The article lists the 11 common pitfalls of analytics, as well as how to avoid them. I’ll go over them briefly here, and you can read the article yourself if you’re interested in more!

  1. Not knowing how to measure success. Goal-driven metrics are key!
  2. Lacking a data-driven decision culture. You must be able to change your course based on the data.
  3. Lacking an executive sponsor. At least one major influencer needs to support your data efforts!
  4. Asking the wrong questions. Insight is only valuable if you’re gathering the right information.
  5. Trying to measure everything. Focus on what matters and leave the rest.
  6. Not prioritizing. Rank your metrics according to which will deliver the most value to the business.
  7. Not embedding analytics with business. The analytics team and the business must partner for optimum impact.
  8. Reacting rather than transforming. The team must be proactive in setting a course for change.
  9. Shutting out stakeholders. Stakeholder input is necessary to prevent surprises later on!
  10. Not customizing a presentation. Only present what will matter to the group that you are speaking to – acceptance will follow!
  11. Viewing analytics as magic. Analytics, like most things, have their limits. Understand that in order to achieve maximum potential.

At DCG we firmly believe in the power of analytics. From code analytics to software metrics and estimation, we can help you implement an analytics program that will impact your business, streamline your vendor processes and deliver value.

Read the article here.

Mike Harris
DCG President

Written by Michael D. Harris at 05:00
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How Should We Read Industry Data?

MikeOne of the publications that I keep an eye on in the software industry is a quarterly report published by Software Equity Group, L.L.C.; the “The Software Industry Financial Report.” The report is about 70 pages long and it contains information on the financial performance of software companies aggregated into three “indexes” (software, SaaS and Internet). Each Index is divided into subdivisions. For example, the software index includes such things as billing software, gaming and healthcare. The data in the report is reported at the subdivision and index level.

So, with the context out of the report out of the way, I thought I’d share some of my observations on the 2Q14 report:

  • In 2014, Forrester forecasts that software will be 26 percent of the technology spend, leading all other categories!
  • A number of on-premises software companies are shifting their revenue models to offer SaaS pricing, but, for most of the larger, more stable companies in the software index, the revenue contributions from these changes are not sufficient to justify a move to the SaaS index.
  • Gaming providers were stars of the indexes about a year ago, but now that sector seems to be slumping – apparently as they lose business and react to the boom in Internet and mobile games

As I thought about the implications of the data in this report, I asked myself just how valuable industry data is in our industry as it ages. I read this report every quarter, but does the state of the industry really change that much every quarter? What would I miss if I only read every other report? Is a great or poor performance by one industry sector in one quarter truly significant? 

Of course, it depends. Sometimes one data point can be very meaningful – the canary in the coal mine. However, generally, what we really need to look at are trends that demand action.

To be able to spot a trend, we need a frequency of data sampling that will allow us to see a trend before it does serious damage. Too frequent sampling can cause us to waste time reacting to changes that are just natural, random oscillation around a trend. 

The same is true of the metrics in the day-to-day running of our software development and/or IT departments. How often do we need to update the burndown chart of an Agile team? I would say daily because on a 10-day sprint we need to be able to spot a three-day trend, and a trend demands at least three data points to be observable. 

How often do we need to benchmark ourselves against our industry peers? Annually is probably sufficient because the data from an aggregate of our peers will probably only change quarterly. But what about benchmarking ourselves against a baseline of our own performance while we are implementing an organizational change (e.g. transitioning to Agile or implementing SAFe)?  Here I would argue that a monthly benchmark is appropriate because that would mean having the minimum three data points to detect a trend every quarter, which would be important if the transition was going off course or not meeting ROI goals. 

In sum, it pays to stop and think about whether your review frequency for a set of metrics is consistent with the likelihood of a trend emerging sufficiently for you to make a decision to change your behavior. Not sure? Give me a call!

Mike Harris
DCG President

Written by Michael D. Harris at 05:00
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"It's frustrating that there are so many failed software projects when I know from personal experience that it's possible to do so much better - and we can help." 
- Mike Harris, DCG Owner

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