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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
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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
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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
Pre-IAG Consulting Post-IAG Consulting
• 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
Source: IAG Performance Benchmark, 2002
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Cost
Reduction in Total Development Cost
Pre-IAG Consulting Post-IAG Consulting
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
Source: IAG Performance Benchmark, 2002
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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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Assessing Project Impact when Outsourcing
Business Requirements
ScoreCard Excellent Average
Quality •
Efficiency
(speed) •
Cost
•
Keep the metrics simple for this example
Can measure in layman terms
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Assessing Project Impact when Outsourcing
Business Requirements
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
Source: IAG Business Analysis Benchmark, 2008
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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
Source: IAG Business Analysis Benchmark, 2008
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
Source: IAG Business Analysis Benchmark, 2008
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
PDU Information:
PMI REP: 2858
Course: Outsourcing Requirements Discovery
Course #: IAG807