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AberdeenGroup

Project #

Extending Software Development Methodologies To Business Decision Making

Tim SloaneDirector, Enterprise & Internet [email protected] 26, 2002

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Agenda

• The Software DevelopmentProcess Reviewed

• Software Realities• Business Planning

Drives Our Requirements• “Modeling” & Simulation• Lessons From Other Industries• Model Sharing & Re-Use

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“Software Development” Defined (For This Discussion)

• Implements An Important Business Process

• Involves Multiple TeamsAnd/Or Departments

• Part Of Enterprise Strategicor Tactical Imperative

• Represents Significant Enterprise Investment

• Failure Impacts Bottom Line Or Delays Execution of Corporate Strategy/Tactics

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Implementation

IT Organization

Concurrent Engineeringof Business Processes,

Products, and OrganizationalStructure

Business Process Development Stages

StrategicDirection

Execution OperationalData

Evaluation of Business Processes, Products, andOrganizational Structure

Bayer, F. Junginger, S. Kühn, H, A Business Process-OrientedMethodology for Developing E-Business Applications

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IT And Software Supplier Focus Today



StrategicDirection

OperationalData


Based on the BPMS7-Paradigm(Karagiannis et al. 1996; Bayer et al. 1999),

Implementation

IT Organization

Execution

Inception

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Software Success In 1999 DoD Study

• Review Of $35.7B Spent By The DoD On Software Indicates[1]:– 75 % Never Used Or

Cancelled Prior To Delivery– 23 % Used After Modification– Only 2% Used As Delivered

Source: JAWS S3 Proceedings, 1999

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Ford “…business managers asked IT for a major system upgrade costing about $1 million. But, months later, when it came time for deployment, managers had changed their minds. The enhancements, though built and paid for, never got off the showroom floor.”

Only about 30% of reengineering projects are successful.

Software Reality In The Large Enterprise

S. Caulfield, IT Services Global Manager, Ford

M. Hammer, J. Champy, “Reengineering the Corporation”

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Business And IT Working Together

• Only 5% of enterprise IT organizations are fully integrated into the business planning cycle [Meta Group]

• Requirements creep should be around 1 percent per month. In fact, creep of more than 2 percent a month is probably a sure sign of a project that will never reach completion. [6]

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The Business/Technical Divide

IBM Systems Journal, Volume 39, Number 2, 2000by D. Bevington

Analysis

DesignPredominantly

Technology Focused

Solution

PredominantlyBusiness Focused

ProblemStatement

Interaction ofBusiness andTechnology

Models

DiscomfortZone

Business Models Technology Models

?

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Measuring & Evaluating “What Is”



StrategicDirection

OperationalData



Implementation

IT Organization

Execution

What IsBusiness Intelligence

& Monitoring

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Strategy and Tactics Look at “What If”



StrategicDirection

OperationalData



Implementation

IT Organization

Execution


& Monitoring

What If

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Process Selection Cost/Benefit Analysis



StrategicDirection

OperationalData



Implementation

IT Organization

Execution


& Monitoring

What If

Cost/Benefit

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Business Evaluation Cycle



StrategicDirection

OperationalData



Implementation

IT Organization

Execution

What If


& Monitoring

Cost/Benefits

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Quarterly Business Re-Evaluations

• Quarterly Financial Reviews Drive Business Re-evaluations

• Common IT Role Is To:– Capture & Store Business

Data– Produce Mandated Reports– Produce Reports Requested

By Senior Management That Provides Operational Insight

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Ideas Are Not Treated Equally

• Models of critical enterprise options are inherently political. Financial modelers report[8]:– 45% were asked to alter sales/revenue forecasts to reflect

senior manager’s more favorable level– 52% were requested to adjust cost projections to a more

favorable level– 42% were requested to create “backcasts” to support senior

manager’s sales/revenue projections– 26% report that divisions/departments withhold critical data

needed to develop accurate models

Anyone Still Surprised At The Project Failure Rate?

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IT Has Limited Opportunity To Respond

• Only 5% of enterprise IT organizations are fully integrated into the business planning cycle [Meta Group]

• Requirements creep should be around 1 percent per month. In fact, creep of more than 2 percent a month is probably a sure sign of a project that will never reach completion. [6]

It Is Imperative IT Establish A Voice In Business

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Good News: IT Has The Basic Tools

• Data Collection / Data Analytics• Business Process

Documentation In:– Documents– Software– Workflow / BPM– Data

• Modeling Talent and Integration Tools• Analytic Thinking Skills• A Self-Interest For Cross-Organizational Success

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Accept A Broader View Of “Model”

ModelA simplified representation of a system that approximates reality

but emphasizes some features/functions at the expense of others to promote a better understanding of the modeled item.

SimulationThe manipulation of a model in such a way that it operates on

time or space to compress it, thus enabling one to perceive the interactions that would not otherwise be apparent.

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The Expanded Role For Models

• Models are inherently social media and mechanisms. They become the organization’s lingua franca, or medium francum, and bridge the multiple Departments of Babel. Simulation mediates between people and information and becomes the medium for relationship management between stakeholders.

• As an adjunct to software prototyping, simulation will transformthe speed and nature of communication and collaboration for process improvement and therefore for software development.

• A unified modeling and simulation approach supports the visualization of new processes across departments and enterprises – and comes with a ROI calculator built in!

derived from [4] “Serious Play”

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Simulation Applied To Architecture

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Simulation Applied To Aerospace

– Henry Shomber, 777 Chief EngineerFor Digital Preassembly”

– EPIC – Electronic Preassembly InComputer, Drove CollaborationUsing 2,200 Terminals For DesignTeam And Key Suppliers

– 777 Design Goals ConstrainedThe Model

– Departments Were Allocated Assets (weight chits)

– Automatic Conflict Detection And Alert Generation

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Simulation Applied To Process Manufacturing

• Stakeholders – Plant Designers, Business Managers, Equipment Manufacturers, Builders– Bayer Consolidated Four Types Of Simulation And Models

To Analyze Polymerization Process And Plant Design Prior To Construction

– The Simulation Analysis Maximized Productivity To Cost– The Simulation Was Also Used As Prime Training Tool

• Managers see impact of operational decisions• Operators see impact of specific control functions

– Bayer Sells Managerial Training Using Business Simulation

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Simulation Benefits:

• Encourages Collaboration Between Stake Holders• Drives Common Vocabulary / Business Object Definition• Communicates The Solution To Stake Holders And Others• Reduces Or Eliminates The Need For Prototypes• Provides Clarity On Organizational Impact • Automatically Formalizes The ROI Perceived By Stake Holders• Drives A Common Set Of Expectations• Defines How Success Will Be Measured• Becomes An Ongoing Communications And Training Tool• Provides New Insight Into Corporate Strategy And Tactics

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How Did Bayer Implement Its Models?

• Modeled All Aspects Of Styrene-acrylonitrile (SAN) Polymerization Production.

• Bayer Integrated Four Models And Four Simulations –Thermodynamic, Process, Process Controls and Plant.

• Developed Common Meta Model Repository• Developed A Common Meta Modeling Language• Developed Transforms To Support Each Simulation Engine• Flow Language Directs Analysis Data Between Simulations and

Stores Results In Repository.• Simulation Used Across R&D, process design, Plant

Commissioning And Operational Training

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Bayer Process Model Warehouse

ModelDeveloper

SimulationDeveloper

ROME

CHEOPSOPENTHERMO

MODKIT

BrowseModel

RetrieveModel

EvaluateModel

StoreModel

Calculate PhysicalProperties


Select ThermodModels

Compute UnitModule

ComputetFlowsheet

BuildModel

Computer-Aided Process Modeling and Simulation (Realms) 5/16/2002

1) Build Models InCommon Language

2) Store In MetaRepository

3) Find Model4) Design Sims5) Design Flows6) Run & Save

Analysis Data

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Mapping Simulation To OMG Standards

ModelDeveloper

MOF

UML ProcessUML Simulations

UML Modeling

BrowseModel

RetrieveModel

EvaluateModel

StoreModel



Select ThermodModels

Compute UnitModule

ComputetFlowsheet

BuildModel

Source: AberdeenGroup

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Model Re-Use And Collaboration

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Preliminary Findings

• Sharing Models Across Technology Domains Will “Lift All Boats.”• Simulation Can:

– Drive Collaboration between IT and Business Units On Requirements– Gather And Document Key Benefits– Provide Alternative To Prototypes– Create New Solution Domain Coupled To UML/MOF/XMI

• Simulation Model Must Be Interoperable With UML• Model Sharing Enables Incremental Development• Repository Needed To Manage Sim Models and Data

"A conclusion is simply the placewhere someone got tired of thinking."

Arthur Block

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Source

[1] Jarzombek, Stanley J. “The 5th Annual Joint Aerospace Weapons Systems Support, Sensors, and Simulation Symposium (JAWS S3).” Proceedings, 1999.

[2] The Standish Group International, Inc. The CHAOS Report, 1994. [3] Software Engineering Institute. The Capability Maturity Model Guidelines for Improving the

Software Process. Boston: Addison-Wesley, 1994.[4] Schrage, M. “Serious Play – How the World’s Best Companies Simulate To Innovate.” Harvard

Business School Press 1999. [5] D’Hertefelt, Sim. “13 Common Objections Against User Requirements Analysis, and Why You

Should Not Believe Them.” Interaction Architect.com 9 June 2000. [6] Leishman, Theron R. and Cook, Dr. David A. “Requirements Risks Can Drown Software

Projects.” CROSSTALK The Journal of Defense Software Engineering April 2, 2002.[7] Bayer, F. and Junginger, S. and Kühn, H. “A Business Process-Oriented

Methodology for Developing E-Business Applications” (ECEC'2000), April 17-19, 2000[8] Gailbraith, C. and Merrill, G “The Politics of Forecasting: Managing the Truth” 1996 California

Management Review[9] AN APPROACH TO USE UML FOR BUSINESS PROCESS MODELING AND SIMULATION

IN ADONIS -- Proceedings of the 13th European Simulation Multiconference (ESM 99), Warsaw, Poland, June 1-4, 1999