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 :

How to: Manage Vendor Performance

DavidThere are a variety of reasons why we outsource our application development and maintenance activities to third-party vendors. There are an equal number of ways that the contractual arrangements for these are drawn up and executed. In the majority of these engagements, the primary service-level measure that is most often present focuses on vendor performance. How effectively we apply these measures usually makes a difference in how well we govern the engagement and how accurately we measure the value received.

Vendor performance may include measures such as on-time delivery, quality, productivity, and cost. In practical terms, all measures of vendor performance can be summed up into three dimensions: Cost, quality, and value. A successful outsourcing arrangement is one that is competitively priced (cost), delivers a working software product (quality), and meets the needs of the business (value). Service-level agreements and measures need to be established to take these three dimensions into account.

As you might suspect, the challenge is to be able to properly measure the value dimension. One could successfully argue that value equates to delivering within budget and/or producing a quality deliverable. Cost and quality measures are easily defined and measured. But what about the measure of value delivered to the business? Furthermore, how do you equate cost to value? How can we ensure that we are getting a good price for the value being delivered?

A Metric to Measure Cost and Value

An ideal scenario would be to have a metric that would measure both cost and value. For example, in manufacturing, output is often measured as a cost per unit of work (a unit of work representing a high quality delivered product that brings value to the business). So, what is our cost per unit of work for software?

If we can agree that software delivers value to the customer in the form of business functionality, then our “unit of work” measure for software can equate to a measurement of functionality being delivered to the business. Fortunately, there is an industry standard measure called function points that does exactly that. Function points are a measure of the features and functions being developed and delivered to an end user. Function Point Analysis defines features and functions as they relates to things, such as input transactions, output displays and reports, inquiries on data values, groupings of maintained data, and interfaces to other applications.

Using the function point measure, coupled with a measure of cost, we can easily produce a cost per function point, which serves as our cost per unit of work. Using some historical performance measures, we can develop a standard cost per unit of work and then use that standard as a benchmark to measure third-party vendor bids and deliverables.

A Sound Negotiating Position With Vendors

With this information available, an organization now has the basis for a sound negotiating position with an outsourcing vendor, with deliverables based on this cost per unit of work. The function point size metric can also be used to effectively measure the quality of the software deliverable. There are several common function-point-based quality metrics, the most notable one being defect density. This is often calculated as the number of delivered defects per 1000 FPs.   

In conclusion, an ADM outsourcing arrangement that includes service-level agreements measuring both quality and value (cost per unit of work) are more likely to be successful and well governed. It is to both parties’ advantage to consider these metrics. The value for the client is an assurance that value deliverables are priced right. The value for the provider is to be able to demonstrate that what was promised was delivered within budget. 

David Herron
VP, Software Performance Management

Written by David Herron at 05:00
Categories :

The #1 Metric is Function Points, Says ISACA

Interesting and great news came out last week via the International Function Point Users Group (IFPUG)!

Function points are the top metric in use today!

The ISACA (Information Systems Audit and Control Association) recently announced its results from a survey of 126 managers, developers, and metrics coordinators in the U.S. on metrics utilization and awareness.

Function points came on top as the #1 metric with 39% of the total, followed by Lines of Code with 21%.

Use Of Metrics

This information is available here.

Of course, we're obvious advocates of FPs, but it's exciting to see that function points are gaining traction in the industry and that more organizations are able to reap the benefits of their use!

If you're interested in function points, we offer a variety of training classes, consulting and solutions to assist you. Questions? Just ask!


Written by Default at 05:00
Categories :

Functional Size Estimation

DavidIn a recent IEEE Software article*, the authors (Christof Ebert and Hassan Soubra) provide a comprehensive overview of estimating techniques for software maintenance. In particular they focus on the use of functional size measurement (FSM) as a key parameter for successfully estimating a software project.

What may be most refreshing about the article is the candid observations made regarding the realities of project estimating. For example, they make note of the fact that estimates are often confused with goals or plans and failure to understand the gaps among goals, plans and estimates is often the cause of failure. Additionally, they note that FSM can be "tedious and time-consuming" for organizations with a larger number of projects to measure and go on to introduce a selection of automated tools that support FSM.

The article also does a nice job of introducing the COSMIC method of measuring software’s functional user requirements (FUR) for both the business and real-time applications. This supports their premise that estimation has moved away from being about size and is moving towards a greater focus on functional estimates. Our experience at DCG, seeing the widespread use of IFPUG function points, would underscore that premise.

Finally, the authors included a mini case study that helps to further advance the reader's understanding of the use of FSM. All in all, this article is a good read and provides some useful observations and information that anyone interested in sizing and estimating should know.

If you find yourself intereste in more information about COSMIC and Function Point Analysis, look no further, we have an article comparing the two.

David Herron
Vice President, Software Performance Management

* Functional Size Estimation Technologies for Software Maintenance, IEEE Software, 11/2014

Written by David Herron at 05:00

"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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