James Nowotarski 29 May 2008 IS 425 Enterprise Information Spring 2008.

James Nowotarski

29 May 2008

IS 425Enterprise Information

Spring 2008

2

Topic Duration 5/22 recap 30 minutes

IT project planning 50 minutes

*** Break 15 minutes

Current event reports 30 minutes

IT organization and governance 60 minutes

Today’s Agenda

What is a “service”?

Definition

“A service is a means of delivering value to customers by facilitating outcomes customers want to achieve without the ownership of specific costs and risks.” – Overview of ITIL v3, 2007, www.itil.co.uk

What is a “service level”?

Example: Target times for incident responses

Source: Goodyear, M. (1999). Netcentric and client/server computing. Boca Raton, FL: Auerbach Publishing.

Incident category Average Maximum (90%)

Category AFirst feedbackSecond feedbackFeedback frequency

.

.

.

5 min20 min30 min

10 min30 min1 h

Service levels are specified for a variety of service types

Disciplines

Performance Management

Configuration Management

Availability

Reliability

Response time

Application versions & enhancements

Accounting Management Reporting procedure

Fault Management Incident management, e.g., • database failure• workstation failure

Security Management

Recovery ManagementBackup

Recovery

Capacity Planning

Online Systems

Batch SystemsOutput handling

Schedule execution

Service Types

What is a “service level agreement”?

• Contract that details the level of service required from a service provider to the user of those services

• Specifies minimums, penalties, and incentives

• Requires an accurate way of measuring the service levels achieved

IT Information Library (ITIL)

Overview

•Best practices framework for IT service management•Resources include publications, tools, and accreditation/training •Most widely accepted approach, adopters include:

• Microsoft • IBM • Barclays Bank • HSBC • Procter & Gamble

SLAs and Service management

Users

Service Management (ITIL)

SLA

Vendors Developers

SystemsManagement• Network Mgmt• Server Mgmt• etc.

Internal SLAExternal SLA

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Key Trends of IT Infrastructure and Operations Management

Open ________ Virtualization/ROI Optimization Net-centric models of IT service delivery (vs.

in-house)Web services (e.g., Flickr, Google Maps)Cloud computing

• Run in the cloud• Develop in the cloud• ______ as a Service (__aaS)

Applications and Data

Middleware

Hardware/Network

System Software

______ as a Service

Public Infrastructure

Business processes

IT Infrastructure in the “Cloud”

• Amazon • EMC• Google• Microsoft

• WebEx• Netsuite• eCollege

Applications in the “Cloud”

Applications and Data

Middleware

Hardware/Network

System Software

______ as a Service

Public Infrastructure

Business processes

Ecosystem in the “Cloud”

• Salesforce.com

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Project management skills are critical in today’s business environment

“The whole discipline and art of project management is going to be the essence of management training, operational excellence, and value added”

- Tom Peters

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Discussion

1. What is a project?

2. Compare/Contrast project with process

3. Compare/Contrast project with program

IT project failure rates are high

14

Source: Standish Group, 2007

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Strategies are typically implemented through projects

Project Summit, Nov. 13, 2006

Existing Paradigmof Project Management

Value

Deliverables

ActivitiesTime

17

Keep eye on horizon (value)

Businessvalue

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• High-level executive who endorses and provides political support for the completion of a project

Key to project success:Project sponsor

19

Need for balance

Flamholtz Leadership Effectiveness Framework

EffectivenessLeadershipStyle

TaskProgrammability

Potentialfor JobAutonomy

Situational Factors

Situation determines the style that will most likely be effective

Optimal leadership style depends on degree of job autonomy and task programmability

Factors Affecting Optimal Leadership Style

Potential for Job Autonomy

Low High

Low

High

Task Programmability

Directive

Interactive

Interactive

Nondirective

Project Organization Structure

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Functional Organization

Marketing Engineering Manufacturing Customer Svc

Function 1

Function 1

Function 1

Function 1

CEO Project coordination

Project

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Function 1

Marketing Engineering Manufacturing Customer Svc

Function 1

Function 1

Function 1

CEO

Matrix Organization

PMO

SOX

Prod A Dev’t

IT sys dev’t

Prod A Dev’t Cust Svc

Prod A Dev’t Marketing

Prod A Dev’t Engineering

Prod A Dev’t Manufacturing

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Matrix Organization

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Matrix Organization

Advantages Disadvantages

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Need for balance

5/29

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Today’s Agenda

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Creating a project “work plan”

Custrequirements 1

Negotiatereqts

negotiatedrequirements

2

Decom-pose

workbreakdownstructure

4

Estimateresources

workmonths

3

Estimatesize

deliverablesize

5

Developschedule

schedule

Iterate as necessary

30

Work breakdown structure (WBS)

Analogous to a table of contents Hierarchical Ensures clarity and completeness of

planning Can be deliverable-oriented, activity-

oriented, or (most common) a combination

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Deliverable-oriented WBS: Building a bicycle

Develop a WBS for a project in which you are going to build a bicycle. Try to identify all of the major components and provide 3 levels of detail

32

Sample WBS (deliverable-oriented)

Bicycle

Frame Gears Wheel Brakes

HandleBars

Body Seat Sprocket Shifter Tires Rim Spokes Front Back

WBS for Bicycle

Copyright Copyright © © 2006 The 2006 The McGraw-Hill Companies. All McGraw-Hill Companies. All rights reserved. rights reserved.

Deliverable-oriented WBS

34

1. Breaks project into a hierarchy.

2. Creates a clear project structure.

3. Avoids risk of missing project elements.

4. Enables clarity of high level planning.

Sample WBS (activity-oriented)

Copyright Copyright © © 2006 The 2006 The McGraw-Hill Companies. All McGraw-Hill Companies. All rights reserved. rights reserved.

Activity-oriented WBS

36

Usersrequirements 1

Negotiatereqts


2

Decom-pose


4

Estimateresources

workmonths

3

Estimatesize

deliverablesize

5

Developschedule

schedule


productivity rate

Planning process

37

Units of software size

Lines of code (LOC)

Function points (FP)

Components

38

LOC

How many physical source lines are there in this C language program?

#define LOWER 0 /* lower limit of table */#define UPPER 300 /* upper limit */#define STEP 20 /* step size */

main() /* print a Fahrenheit->Celsius conversion table */{ int fahr; for(fahr=LOWER; fahr<=UPPER; fahr=fahr+STEP)

printf(“%4d %6.1f\n”, fahr, (5.0/9.0)*(fahr-32));}

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LOC

Need standards to ensure repeatable, consistent size counts

Include Exclude

1. Executable 2. Nonexecutable3. Declarations 4. Compiler directives 5. Comments6. On their own lines 7. On lines with source

. . .

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Estimation of LOCCAD program to represent mechanical parts

Estimated LOC = (Optimistic + 4(Likely)+ Pessimistic)/6

Major Software Functions

Opt-imistic

Most Likely

Pess-imistic

Estimated LOC

User interface and control facilities UICF 1,500 2,300 3,100 2,300

Two-dimensional geometric analysis 2DGA 3,800 5,200 7,200 5,300

Three-dimensional geometric analysis 3DGA 4,600 6,900 8,600 6,800

Database management DBM 1,600 3,500 4,500 3,350

Computer graphics display features CGDF 3,700 5,000 6,000 4,950

Peripheral control PC 1,400 2,200 2,400 2,100

Design analysis modules DAM 7,200 8,300 10,000 8,400

Estimated lines of code 23,800 33,400 41,800 33,200

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LOC

“Lines of code is a useless measurement in the face of code that shrinks when we learn better ways of programming” (Kent Beck)

Computing Function PointsMeasurement parameter Count Sim-

pleAvg Com

-plex

Number of user inputs X 3 4 6 =

Number of user outputs X 4 5 7 =

Number of user inquiries

X 3 4 6 =

Number of files X 7 10 15 =

Number of external interfaces

X 5 7 10 =

Count (Unadjusted Function Points) UFP

5

8

10

8

2

15

32

40

80

10

177

43

Function Points

A measure of the size of computer applications

The size is measured from a functional, or user, point of view.

It is independent of the computer language, development methodology, technology or capability of the project team used to develop the application.

Can be subjective

Can be estimated EARLY in the software development life cycle

Two flavors: Delivered size = total application size delivered,

including packages, assets, etc. Developed size = portion built for the release

Calculate Degree of Influence (DI)0 1 2 3 4 5

No influence

Incidental Moderate Average Significant Essential

1. Does the system require reliable backup and recovery?2. Are data communications required?3. Are there distributed processing functions?4. Is performance critical?5. Will the system run in an existing, heavily utilized operational environment?6. Does the system require on-line data entry?7. Does the on-line data entry require the input transaction to be built over multiple

screens or operations?8. Are the master files updated on-line?9. Are the inputs, outputs, files, or inquiries complex?10. Is the internal processing complex?11. Is the code designed to be reusable?12. Are conversion and installation included in the design?13. Is the system designed for multiple installations in different organizations?14. Is the application designed to facilitate change and ease of use by the user?

3

3

33

1

4

4

35

1

2

1

2

1

The FP Calculation:Inputs include:

Count TotalDI = Fi (i.e., sum of the Adjustment factors F1.. F14)

Calculate Function points using the following formula:FP = UFP X [ 0.65 + 0.01 X Fi ]

In this example:FP = 177 X [0.65 + 0.01 X (3+4+1+3+2+4+3+3+2+1+3+5+1+1)FP = 177 X [0.65 + 0.01 X (36)FP = 177 X [0.65 + 0.36]FP = 177 X [1.01]

FP = 178.77

TCF: Technical complexity factor

Reconciling FP and LOC

http://www.theadvisors.com/langcomparison.htm

LANGUAGEAVERAGE SOURCE STATEMENTS PER FUNCTION POINT

1032/AF 16

1st Generation default 320

2nd Generation default 107

3rd Generation default 80

4th Generation default 20

5th Generation default 5

Assembly (Basic) 320

BASIC 107

C 128

C++ 53

COBOL 107

JAVA 53

Visual Basic 5 29

47

Components

Simple Medium Hard

# Database tables

# Reports

Etc.

48

Usersrequirements 1

Negotiatereqts


2

Decom-pose


4

Estimateresources

workmonths

3

Estimatesize

deliverablesize

5

Developschedule

schedule


productivity rate

Planning process

49

Bottom-up estimating

Estimate = #units x time per unit For example, a report design task:

10 reports3 hours per reportEstimate = 30 person-hours (aka

“workhours” Most projects are estimated in this way,

once details are known about units

Using FP to estimate effort:

If for a certain projectFPEstimated = 372

Organization’s average productivity for systems of this type is 6.5 FP/person month

EffortEstimated = ???

Burdened labor rate of $8000 per person month

Total project cost $???

Cost per FP $???

51

Other estimating techniques

Expert judgment Analogy Algorithmic

General model:E = A + B x (ev)c where E is effort in person months

A, B, and C are empirically derived constantsev is the estimation variable (either in LOC

or FP)

52

LOC-Oriented Estimation Models

E = 5.2 X (KLOC)0.91 Walston-Felix Model

E = 5.5 + 0.73 X (KLOC)1.16 Bailey-Basili Model

E = 3.2 X (KLOC)1.05 Boehm simple model

E = 5.288 X (KLOC)1.047 Dot Model for KLOC > 9

FP-Oriented Estimation Models

E = -13.39 + 0.0545 FP Albrecht and Gaffney Model

E = 60.62 X 7.728 X 10-8 FP3

Kemerer model

E = 585.7 + 15.12 FP Matson, Barnett, Mellichamp model

Software size estimation formulae

53

Top-down vs. Bottom-up

Communication project initiation requirements

Modeling analysis design

Construction code test

Deployment delivery support

Planning & Managing

Top-down “approximating”:- Expert judgment- Analogy- Algorithmic

Bottom-up “estimating”

54

Estimating accuracy improves over time

http://sunset.usc.edu/research/COCOMOII/index.html




55

Usersrequirements 1

Negotiatereqts


2

Decom-pose


4

Estimateresources

workmonths

3

Estimatesize

deliverablesize

5

Developschedule

schedule


productivity rate

Planning process

56

GANTT Schedule

• View Project in Context of time.

• Critical for monitoring a schedule.

• Granularity 1 –2 weeks.

57

One of the primary jobs of a project manager is to manage these tradeoffs

58

Some Courses at DePaul SE 468: Software Measurement and

Estimation Software metrics. Productivity, effort and defect models.

Software cost estimation. PREREQUISTE(S):CSC 423 and either SE 430 or CSC 315 or consent

SE 477: Software and System Project Management Planning, controlling, organizing, staffing and directing

software development activities or information systems projects. Theories, techniques and tools for scheduling, feasibility study, cost-benefit analysis. Measurement and evaluation of quality and productivity. PREREQUISTE(S):SE 465 or CSC 315

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Today’s Agenda

IT Organization

The business situation will drive the degree to which IT is weighted toward business users vs. IT concerns

Business user concerns• Responsiveness• Customization• Innovation

IT concerns• Efficiency • Standards• Control

Business situation

Unresponsive

No business unit (BU) ownership

Doesn’t meet every BU’s needs

Economiesof scale

Sharedstandards

Critical massof skills

Compliancecontrol

Purely centralized

Organizational design challenge: Centralized hierarchies support control and efficiency . . .

Cons Pros

Redundant functions/costs

Proliferation of data, platforms

Variable quality, control

Lack of synergy and integration

Speed

Promotes risk, innovation

Responsive to BU’s needs

Purely decentralized

. . . while the decentralized model supports flat organizations with responsibility on the “edges”

Pros Cons

Hybrid/Federal IT model

Unresponsive

No business unit (BU) ownership

Doesn’t meet every BU’s needs

Redundant functions/costs

Proliferation of assets, delivery vehicles, rollouts

Variable quality, control

Lack of synergy and integration

Economiesof scale

Sharedstandards

Critical massof skills

Control

Speed

Promotes risk, innovation

Responsive to BU’s needs

Shared vision &

leadership

Consistent quality

Synergy &Integration

Mutual trust & commitment

Purely centralized IT Purely decentralized IT

The “hybrid” or “federal” model is the best structure for balancing business user and IT concerns

Source: MIT

Director - CIO

Director, IS Planning

Director, Software Engineering

Manager, Production

Director, Business Technology

Manager, Administration

Director, Technical Services

• Enterprise Arch• Security• S/W Evaluation

• Business analysts• Program managers• Data warehouse

• Developers• Development tools

• Operations• Help desk• Application support

• Network• PC technicians

• $4B revenue company• 400 person IT shop, $70M

• IT HR• IT Finance

Purely centralized ITCEO

Corporatemanagement

and users

Purely decentralized IT

CEO

CIO

VP Finance VP Marketing VP Product A VP Product B

Function 1

Finance IT

Function 1

Marketing IT

Function 1

Function 1

Prod. B ITProd. A IT

Hybrid/Federal IT

CEO

VP Finance VP Marketing VP Product A VP Product B

Function 1

Sys dev’t Finance

Function 1

Function 1

Function 1

CIOArchitecture

Operations

Sys dev’t Marketing

Sys dev’t Product A

Sys dev’t Product B

Sys. dev’t

68© James W. Nowotarski

IT Outsourcing

• On average, outsourcing accounts for roughly 20% of the IT budget (Source: CIO Insight, March 2006)

• More than 90% of [government officials responding to a survey] deemed outsourcing as important or absolutely critical to their missions of delivering services to citizens

• “Outsourcing is one of the greatest organizational and industry structure shifts of the [20th] century” -- James Brian Quinn, Amos Tuck School, Dartmouth

Information technology (IT) outsourcing is widely accepted by most commercial and government organizations


IT Outsourcing

• Cost reduction.

• Cost predictability.

• Improved performance levels. For example, speed of delivery, customer satisfaction, quality, etc. These are especially relevant for seasonal businesses where volume fluctuates widely.

• Desire to refocus on corporate core competencies.

• Desire to have in-house IT resources focus on strategic systems and/or technology.

Information technology (IT) outsourcing is a multiyear contract/relationship involving the purchase of one or more IT services

Drivers


IT Outsourcing

• Lack of in-house IT resources. This includes personnel resources and computing resources such as hardware capacity.

• Desire to become and stay technologically current.

• Financial factors. Outsourcing typically involves the outsourcing firm making up-front payment to the customer firm for a transfer of people and/or computing assets. This improves the balance sheet and short-term cash flow.

• Desire to overcome internal inertia and resistance to change.

• Increased recognition of the strategic benefits of alliances.

Information technology (IT) outsourcing is a multiyear contract/relationship involving the purchase of one or more IT services.

Drivers (continued)


IT Outsourcing

“[g]et rid of context and focus on core” - Billy McCarter, former CIO of Fireman’s Fund, who reduced IT staff from 1,100 to 600 with much of the work outsourced to offshore workers

A desire to focus on core competencies is frequently the strongest driver to outsource

“[a]llows me and my staff to focus on fun areas . . . be more productive, more visible to the business, understand what the business needs versus worrying about whether one of the servers needs additional RAM” - Daniel Sheehan, CIO at Advo, Inc.


IT Outsourcing

• Total outsourcing. Outsource a large percentage of the IT function. This may be to a single outsourcing firm, or to multiple firms

• Multisourcing. Using a combination of internal and multiple external IT service providers.

• Transitional outsourcing. Using an outsourcing firm for some discrete period of time, after which the activity returns in-house. This is often used for legacy systems that need to be overhauled.

There are many approaches to IT outsourcing

Examples


IT Outsourcing

Multisourcing Example: Nissan

Service Provider Deal Scope

Satyam (India) Application support• Maintenance• Enhancement

IBM Global Services IT infrastructure

Internal Business analysis

Project management

Note: Prior to April 2006, all of the above had been outsourced to IBM


IT Offshoring

Offshore - A location/development center in a country remote from the country in which the service or process is consumed or touches the end user or customer

Source: Gartner Group

75

© James W. Nowotarski

IT Offshoring

IT organizations and solutions providers are increasing their offshore capabilities

• Merrill Lynch

• Lehman Brothers

• Ford

• NY Stock Exchange

• Motorola

• Boeing

• HSBC

• Google

• Many unpublicized

IT organizations• Accenture

• EDS

• HP

• IBM

• Perot

• SAP

• Offshore firms, typically with local presence, e.g., Wipro, Tata, Infosys

Solutions providers• Legacy

maintenance

• New development

• Projects requiring specialized expertise, e.g.,

– Embedded software

– ERP

Types of projects


• Reduce cost– 40-50% savings, according to Merrill Lynch CTO

• Higher quality/capability– A disproportionately high percentage of CMMI Level 5 systems

development organizations are in India (CMMI Level 5 is the top level of performance on an industry benchmark)

• Speed– A “follow the sun” approach allows for 24x7 work on a project

Cost, quality, and speed are the main reasons for going offshore

IT Offshoring


• Highly capable workforce– 2-3M college graduates per year (will double by 2010)– #2 in world in computer science grads (china #1, U.S. #3)

• Focus on process and product quality– “Quality has become an obsession with the software developers in India”

– Casimir Welch, American Society for Quality Fellows• Low labor and infrastructure costs• Government commitment and support• English (and other) language skills

India is the leading location for offshore sourcing

Reasons

IT Offshoring


• Competition for talent is driving salaries up by as much as 30% per year

• China, Russia, Mexico, Vietnam and Philippines are training armies of programmers to compete with India

– BearingPoint chose Shanghai for its new software development center . . . pays $500/month for engineers in Shanghai, $700 in India, $4000 in U.S.

• Increasing competition closer to the customer, e.g., – “Nearshore”, e.g., Mexico and Canada for U.S. customers– “Onshore”, e.g., Rural Arkansas

India’s advantage is beginning to erodeReasons

IT Offshoring

IT Governance

80

• The operating model for how the organization makes and enacts decisions about the use of IT

• What is meant by “operating model”?– Organizational units involved– Division of roles, responsibilities, and accountabilities– Processes, standards, policies– Measurements

• What types of decisions are we talking about?– What IT goals and priorities will enable the organization and

maximize benefits– How to obtain and deploy IT resources– How to appropriately mitigate and control risk

IT Governance: Definition

81

• Proposal: Replace proprietary and/or locally implemented reporting systems with a single, global management reporting system

• Hard to justify on purely economic grounds• Local units will be resistant, but their cooperation

is essential to the success of the initiative• Who decides? Who is accountable for the

implementation of the decision? How will the results of the decision be measured and monitored?

IT Governance: Example

82

Senior management of the enterprise devoting more attention to IT governance

Enterprises are more dependent than ever on IT

Enterprises need to maximize the business value from their [often] large investment in IT

An increasing percentage of IT spending is controlled by business units

IT viewed as “strategic partner” vs. “order taker”

Reasons

83

• Historically poor performance of IT• Tendency of IT to focus on itself• Increased variety of service delivery models

(cloud computing, incremental outsourcing, etc.) creates complexity

• Regulatory focus in post-Enron era, e.g., Sarbanes Oxley

Senior management of the enterprise devoting more attention to IT governance (cont.)

Reasons (cont.)

84

IT Organization Design vs. Governance

Central headquarters

IT

IT

Marketing

IT

Finance

IT

Manufacturing

External parties

Decision-making processes • Goals• Priorities• Risk mitigation• Value from IT• Who does what

Steering Comm.

IT Governance vs. IT Management

86

Short reading Complete Assignment 4 DL: Complete discussion on project

management resources (due June 5)

For June 5

James Nowotarski 29 May 2008 IS 425 Enterprise Information Spring 2008.

Documents

cloud slide

service management resources

level of service

service levels

service delivery

service provider

program slide

aas slide