Introduction
Innovate or Perish
Kaizen
Continuous learning
Continuous evolution
Use of Technology
Continuous Training
Recruiting and retaining the best…
Information and Decision-making
Continuous Change and Business Agility
Staying ahead…

INTRODUCTION

“Even if you are on the right track, you’ll get run over if you just sit there.”
— Will Rogers

It was Joe Tiller, the famous football coach, who said “It’s always a chess game, and you’re trying to stay one move ahead of the competition.” Tiller’s words are as applicable to businesses as it is to football. To survive and thrive in today’s brutally competitive business environment, businesses must find ways to continuously move forward and stay ahead of the competition to survive and thrive in today’s brutally competitive business environment. As the Internet and WWW are changing the way business is done by providing a level playground for small companies to effectively and efficiently compete with large conglomerates, no one is safe as their positions could be taken by smart, agile, and new competitors.

Even though, running an efficient organization that delivers high-quality products and services at reasonable prices is essential for business success, it is no longer sufficient to ensure survival. Even though the factors like customer satisfaction, productivity improvement, elimination of waste, automation of business processes, faster order processing, etc. are essential for survival, these are not the factors that act as the key differentiators in today’s global Web economy. In this article we will see the factors that differentiate the best from the rest, the winners from the losers, and the leaders from the followers.

INNOVATE OR PERISH

According to the findings by many research firms and industrial analysts, the only way for companies to compete is to constantly innovate. According to them the avenues for improving the bottom line has been exhausted and the only way to move forward is to sustain top line growth and increasing profits. So the CEOs and the top management must change their focus from the operational issues and concentrate on growth and innovation. According to Rosabeth Kanter, “to stay ahead, you must have your next idea waiting in the wings.”

The last few decades show the rise of companies that constantly innovated—created new products, developed new marketing strategies, improved and revamped existing products, developed new business and sales models—cutting into the market share of organizations that were maintaining status quo. Some of the well-known examples are Dell (which revolutionized the PC market), McDonald’s (which redefined the fast food market), and of course Apple. Apple is one company that thrives on innovation. If you look at the number of new products that Apple has brought out in the recent years—iMac, iBook, iCube, eMac, iPod, iTunes, iPod Mini, Mac Book Pro, Mac Book, Mac Pro, iPod Shuffle, iPod Nano, Apple TV, iPhone, iPod Touch, and so on—you will realize why other companies are always playing the catching up game with Apple and yet never succeeding in even that.

Innovation will not happen automatically. The organization should create an environment that is conducive for innovation. For example, at Google, employees can spend 20% of their time to explore and develop their ideas. Some of the best Google applications and products are results of such projects. Organizations must not only stimulate innovation, but also prevent innovation stoppers and idea killers from killing the innovative spirit of the employees. In his book “The Myths of Innovation,” Scott Berkun defines an innovation stopper as “a person with power and motivation to kill new ideas.” He also gives reasons why these people are afraid of innovation. Idea killers are thought inhibitors like “we have tried it before”, “we don’t have time”, “we don’t have budget”, “not interesting”, etc. So organizations should be aware of and remove innovation stoppers and idea killers and must encourage the employees to constantly innovate.

When asked how FedEx always stayed ahead of competition, Fred Smith, the founder and CEO said, “We hammer home that not to change is to be in the process of dying, of not meeting the market as it is. We applaud people who instigate change. We don’t hang people who try something new that doesn’t work out, because that’s the easiest way to ossify an organization—to crucify the people who are trying to innovate.” So the organizations should encourage the employees to try out new things, think of new ideas and always innovate without fear of failure.

According to Apple CEO Steve Jobs “innovation distinguishes between a follower and a leader.” Today, innovation is no longer a luxury; it is the key to survival.

KAIZEN

Kaizen or continuous improvement is one of the best ways of improving the efficiency and effectiveness of an organization. Even though it is a Japanese concept, it can be applied anywhere. Kaizen strategy requires never-ending efforts for improvement involving everyone in the organization.

The difference between innovation and improvement is that innovation involves a drastic improvement in the existing process and requires large investments whereas Kaizen signifies small but continuous improvements as a result of coordinated and continuous efforts by all employees. It can be a reduction in the response time, elimination of an unnecessary process, introduction of a safer working practice, creation of a device to improve the efficiency of a worker, and so on.

Most Japanese methodologies like the Five Ss, Canon Production System (CPS), Toyota Production System (TPS), Total Quality Management (TQM), etc. have continuous improvement as their cornerstone. Organizations should evolve a culture of continuous improvement and encourage the employees to continuously and consistently improve the way in which they perform their activities.

Small and minor improvements when implemented continuously and by all the employees can have a dramatic impact on the overall performance of the company. Consider the example of AZ Technologies, that conducted touch typing training for all its employees as 95% of its employees used computers for at least 4 hours a day. The productivity improvement was dramatic—many employees were able to save hours, as their typing speed doubled or tripled. It also reduced the typing related injuries as the employees were using the correct method.

CONTINUOUS LEARNING

Leaning is a lifelong process. One must never stop to learn. Learning will keep the employees up-to-date with latest technological developments and help them improving their efficiency as they could use the newer and better methods, practices, tools and techniques.

In his book “The Fifth Discipline: The Art and Practice of the Learning Organization,” Peter Senge introduces the concept of the “Learning Organization” and stresses the importance on continuous learning. According to Senge learning organizations are places where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning to see the whole together.

The basis of a learning organization is the people: their knowledge, skills, creativity, diversity and learning capability. A learning organization is characterized by continuous improvements through new ideas, new knowledge, and new findings, which the organization uses to anticipate, to innovate, and to find new ways to do business.

The HRD departments of the organizations should create an environment that promotes learning and there should be ample learning opportunities for the employees. Well stocked libraries, computer based training (CBT) programs, computer assisted learning (CAL) facilities, etc. should be made available to the employees. The HRD department should have a skill inventory of all the employees and should conduct courses and training programs that fill the gaps in the employees’ skill set so that it matches with the long-term strategies of organization. For example, if an organization is planning to switch from UNIX to Windows, then the employees in the organization who are not familiar with Windows should be given training so the transition can be smooth.

Almost all top tech firms insist and create an atmosphere that promotes continuous learning. For example, continuous learning and development is the key for a successful career at IBM. According to IBM, “we need people who will focus on building their expertise continuously in line with the ever-changing business environment.” IBM has recognized the importance of continuous learning to stay ahead of competition and has developed state-of-the-art tools like job role and technical training (training on emerging technologies), academic learning assistance program (assistance for external education), Learning@IBM, IBM Global Campus, etc. so that the IBMer’s can continuously develop professional and technical skills.

There are different types of learning, each with different objectives. There are induction courses, refresher courses, soft skill courses, programs to impart new skills, inspirational and motivational programs, and so on. Ideally the organizations should provide all the above types of learning opportunities so the employees can grow and thereby help their companies to grow.

CONTINUOUS EVOLUTION

Evolution is the secret of survival. In fact, the plants and animals have continuously and constantly adapted and evolved to survive. The phrase “survival of the fittest”—one of the fundamental laws of evolution is true in the case of businesses too. Businesses that can adapt to the new environments and evolve are able to survive and thrive even during difficult times. The two aspects of evolution are strengthening the core competencies and diversification.

All businesses will have their core competencies. For example, the core competency of a car manufacturer is making cars while that of a publisher is to bring out books. The businesses should identify their core competencies and strengthen them. For example, the car manufacturer should find ways to improve the quality of cars, make them safer, more fuel efficient and comfortable, while keeping the prices as low as possible. While the car manufacturer can further improve his chances of survival by setting up an R&D unit that will help him in developing new, powerful, and fuel efficient engines, setting higher standards in passenger safety and comfort, creating aesthetically appealing and cost-effective designs, and so on. This way, the organization can always stay ahead of the competition.

Diversification can be either horizontal or vertical. In the case of horizontal diversification, the organization enters into areas that are related to its core competency. For horizontal diversification, the company acquires or develops new products that appeals to its existing customers. For example, the car manufacturer can diversify into auto accessories, spares and so on. In vertical diversification, the company moves into the business of its suppliers. For example, the car manufacturer could diversity into steel manufacturing or tyre making so it could produce the materials required for its core business. Diversification, if done properly, gives entry to new markets, provides new business opportunities and reduces the financial risk. Diversification can be achieved through mergers, acquisitions and starting new business units. The advantages of the first two strategies are that you get a new product and set of talented people, and also eliminate a potential competitor. You must have seen companies like Microsoft, Oracle, Google, GE, ABB, TCS, Wipro, Satyam, Mittal Steel, Tata Steel, Tata Motors, Reliance Industries, and so on, acquiring competitors to grow, increase the market share, improve market reach, and consolidate their number one position.

USE OF TECHNOLOGY

Technology should be made an ally and the organizations should embrace technological developments rather than fight them. Technology can help in automating many business processes and procedures thereby improving productivity and reducing human error. Employee productivity can increase dramatically by use of technology in their day-to-day activities. For example, using a spreadsheet for data analysis, using an auto-responder for an out-of-office reply, or using videoconferencing for managing a multi-site project can save a lot of time and money.

The advanced data analysis and decision support tools that are capable of predicting the future, determining trends from historical data and give accurate forecasts and projections can help the decision-makers to take informed decisions faster and react to changes in the business environments and customer preferences before their competition. These tools like data warehouses, OLAP, data mining, etc. provide organizations the power to always stay ahead.

Companies should consider technology as a competitive weapon and should create an environment where new technologies are welcomed and used to its fullest potential. Technological obsolescence is one of the sure recipes of disaster and organizations that want to survive should avoid it at all costs.

CONTINUOUS TRAINING

We have seen the concept of continuous learning and learning organizations. For this to happen, the organizations should provide continuous training to its employees. We have seen that different types of training are designed to fulfill different needs. The training could be done by in-house experts or external consultants. The training can be conducted in-house, outside the organization or even at dedicated training camps.

In-house training is mainly conducted to familiarize the employees with the company culture, company values, what is acceptable and what is not and so on. It is also ideal for imparting technical skills that they employees will require to perform their day-to-day functions.

Another type of training that is vital for the employees are the soft skills. Soft skills are the people skills. They are non-technical, intangible, personality-specific skills that determine a person’s strengths as a leader, listener, and communicator. In today’s highly competitive business environment, soft skills are as important as the technical skills. Organizations should give soft skills training to employees, as they have to effectively interact with people from diverse cultures as part of their jobs. There are many organizations that provide soft skills training. These organizations help the employees improve their communication skills, learn new languages, improve their body language, and become good ambassadors of their organization. These courses also addresses the problems that can occur in a multi-cultural work environment like cultural differences, accepted social behavior and etiquette when interacting with customers or colleagues from different parts of the world. The objective of soft skills training is to develop employees who can handle their daily jobs and interact with people from different cultural and social backgrounds effectively, efficiently and with confidence. One soft skills training organization is Emmpower. Emmpower is a behavioral soft skills training institute based in Bangalore. According to Angel Papali, faculty member, “Emmpower is an organization that facilitates individuals and organizations to evolve to their highest potential through training and organization behavioral development.”

Yet another kind of training is called experiential learning where the employees undergo training by performing various tasks that are aimed at improving their self-confidence, shedding their inhibitions, promoting teamwork, developing leadership qualities and so on. Experiential learning is not a new concept. In his book “Experiential Learning: Experience as the Source of Learning and Development,” David A. Kolb explains experiential learning as the process of making meaning from direct experience. Kolb’s work can be traced back to that famous dictum of Confucius around 450 BC: “Tell me, and I will forget. Show me, and I may remember. Involve me, and I will understand.

Pegasus Institute of Excellence (PIE) is a pioneer in experiential learning. PIE has several training camps, all located in picturesque locations where the participants closely interact with the nature and one another to hone their skills by performing activities specially designed to bring out the best in them. According to Capt. Ravi, director of PIE, “Pegasus has reinvented the concept of learning and development by blending different learning systems in a fun filled environment thus leaving a lasting impact on the participants”

So gone are the conventional and traditional training methods, as organizations are inventing newer, more effective and enjoyable training methodologies that are more appealing to their employees, ensuing their total participation thereby producing better results. For example, the Ramoji Film City is a preferred corporate training destination as the place can be used to create any environment with special effects and other movie making techniques to provide a unique training experience.

RECRUITING AND RETAINING THE BEST…

Employees are the most valuable assets of any organization. So hiring and keeping the best talent is of utmost importance today. A highly motivated and creative workforce can help organizations to scale greater heights and stay ahead of the competition. But recruiting and retaining the best minds is not an easy task. It takes a lot of hard work and innovative and creative plans.

Google, the best company to work for, according to Fortune magazine (2007), is setting standards for other organizations. Google offers goodies such as stock options, informal work environment, free meals, swimming spa, and free on-site medical care, free transportation, hair saloons, gyms, locker rooms, massage parlors, childcare, on-site notaries, car services, and so on. Engineers can spend 20% of their time on independent projects. No wonder Google gets more than 1,300 résumés a day and no wonder it is churning out new products almost on a daily basis.

According to the 2007 Business Today study of best company to work for, Microsoft India has toppled the 2005 and 2006 winner—Infosys. The reasons behind Microsoft’s accession to the number one slot are a host of innovative strategies including leadership development programs, recognition of talent, seamless internal branch transfers, excellent compensation packages, an exemplary mentoring and buddy system, facilities to help employees in finding houses, school admissions, childcare, and other similar chores, etc.

John J. Medina (Breakthrough Ideas for 2008, Harvard Business Review, February 2008), advocates the creation of brain-friendly workplaces where board meetings are conducted on treadmills, desks are equipped with stationary bicycles, and people wear gym clothes, not suits. According to him, in a competitive climate, exercise is as close to a magic productivity bullet as you’ll get. So brain-friendly workplaces, informal work culture and happy employees are the means to continued success.

Some of the traits common to all the top employee-friendly companies are informal and flexible work environment, challenging assignments, fun filled and enjoyable work culture, comfortable, brain-friendly, and often luxurious workplaces, excellent perks, ample scope for personal and professional growth, and so on. Here the small and medium sized organizations (SMEs) have an advantage over the bigger organizations as they can make the workplace more interesting and working conditions more informal as the number of employees is less. In fact, the bigger companies like Google, Microsoft, Dr. Reddy’s Lab, Johnson and Johnson, etc. are facing more competition on the recruitment front from SMEs and startup companies than from the larger competitors.

Companies are vying with one another in offering more goodies in an attempt to woo the best and keeping them happy. So the concept of the caring organization is emerging and it is here to stay. Companies that realize the value of employees and do everything possible to keep them happy will be the market leaders as it is the employees that make or break a company.

INFORMATION AND DECISION-MAKING

This is the information age and information is a must for survival. Organizations must not only know what is happening inside but also outside. The organizations should also make the best use of its historical data. The three kinds of information—information about the day-to-day operations, historical information and information about the external environment and competitors—when combined, organized, analyzed and interpreted would give the organizations the ability to manage its operations, predict the future and learn from the past. When used effectively (using information gathering, storing and analyzing tools), and presented at the right time in the right format, the decision-makers of the organization will be able to make good decisions faster than its completion. This enables the organization to quickly adapt to the ever changing business environments and customer preferences.

Quick, faster and better decisions are an important factor that decides the survival and success of an organization. But another equally important, but often overlooked factor is the level at which an effective decision can be taken. For example, if a customer calls the customer care center with a serious grievance, it should be solved immediately. But if the customer care executive does not have the necessary authority to offer a solution and all he can say is that “We will look into the matter and then get back to you as soon as possible,” then the chances of the customer being satisfied are nil. But if the person attending the call has all the information about the customer and depending of the seriousness of the problem and the relationship with the customer can offer a suitable solution, it will go a long way in improving customer satisfaction and goodwill, and customer satisfaction is the most important requirement for business success.

Organizations should train the employees to make good decisions and communicate effectively with clients and customers and should empower them to make decisions whenever possible. Here the soft skills training and delegation of power are important. This will free the top management from the day-to-day fire fighting and give them enough time to concentrate on strategic planning, investigate the new business trends, anticipate and counter the moves by the competition, formulate new business strategies, adapt to the changes in the environment, etc.

CONTINUOUS CHANGE AND BUSINESS AGILITY

“It is change, continuing change, inevitable change that is the dominant factor in society today. No sensible decision can be made any longer without taking into account not only the world as it is, but the world as it will be…This, in turn, means that our statesmen, our businessmen, our everyman must take on a science fictional way of thinking.”
—Isaac Asimov.

Change is one thing that all businesses have to cope with. How well an organization manages change is one of the factors that decide its success. New technological developments are revolutionizing the way we think, work and do business. The business environment is changing with the introduction of new business models, addition of new rules and regulations, and entry of new competitors. The customer preferences are changing so fast that most new products have very short shelf-life.

In such an environment the success of an organization depends on the factors like how fast the organization can adapt and adopt and how quickly and effectively it can respond to the changes. The speed with which an organization can react to the changes determines its agility. When an organization has to adapt quickly, the responsibility of problem solving will go to its employees. Innovative and apt solutions for each new situation can be created quickly by the collective intelligence of the employees. According to Kouzes ad Posner (Management 21C, 2000), the secret of high-performing organizations is that everyone within them knows that leadership at all levels is expected and rewarded, and that individuals everywhere are responsible for making extraordinary things happen.

Jack Welch, the former CEO of General Electric, has popularized the concept of “boundaryless organizations.” These are firms that are not limited by the horizontal, vertical or external boundaries imposed by a predetermined structure and where cross-functional teams dissolve horizontal barriers, while external partnerships and collaboration overcome the firm’s boundaries. Thus, the boundaryless organization shows companies how to remove the obstacles like hierarchy, bureaucracy, unnecessary regulations, and geography to achieve outstanding business performance. These changes enable the company to respond quickly to environmental changes and to spur and stimulate innovation.

According to Couillard (Ivey Business Journal Online, July-August, 2007), boundaryless environments are typical in learning organizations, in which teams self-organize and knowledge is created and shared in the most efficient way. In the book, “The Boundaryless Organization,” Ashkenas, Jick, Ulrich, and Kerr show how leading companies are busting boundaries in all directions—vertical, horizontal, external and geographic—and achieving stellar results.

Large organizations should find ways to become agile to effectively compete with the smaller competitors as they can react to changes more quickly and effectively. Empowering employees to make decisions, creating small profit centers, dividing the organization into small divisions, etc. are some of the techniques the bigger organizations can try to improve agility. In his book “Who Says Elephants Can’t Dance?” Louis V. Gerstner Jr., the former IBM Chairman describes how he engineered one of history’s most dramatic corporate turnarounds.

James Belasco offers practical solutions to managing change and empowering employees organizations in his book “Teaching the Elephant to Dance: The Manager’s Guide to Empowering Change.” Belasco explains how to create organizational change and improve agility by selling a vision, hiring the right people, creating heroes, dealing with doubters, setting examples, and rewarding the faithful. The book makes its case by citing examples of strategies successfully used in companies such as Levi Strauss, Sony, Apple, Wal-Mart, and IBM.

STAYING AHEAD…

Business environment is becoming highly competitive and to survive and stay ahead of the competition managements must run their organizations leaner and smarter. The factors like ability to constantly innovate and learn, continuously and consistently improve, use technology intelligently and effectively, anticipate, adopt and react to changes quickly, etc. can determine whether a company becomes an industry leader or just another one of the pack. To become globally competitive and maintain its competitive edge organizations should hire the best talent, keep them happy and make the best use of their talents. The four factors that are critical for the success of any organization are people, innovation, information and technology.

Introduction
Costing
Activity Based Costing (ABC)

ABC Vs. Traditional Costing
Benefits of ABC System
Why ABC Systems?
Finally…

Estimation
Conclusion
References
Selected Bibliography

INTRODUCTION

Costing and Estimation are two important functions that determine the competitiveness of every company. To compete effectively one has to know how much cost one is incurring on each project that the organization is undertaking. The company can only reduce its operational costs only if it knows how much is being spent and who is spending more. Similarly to know in advance how much a project is going to cost or how many months it is going to take is also important. This is important for winning contracts, budget allocation, financial and manpower planning and so on. The more accurate the estimates the better; because if the estimates are tool low the company will have to incur losses and if it is too high the company might not win the contract and might allocate too much resources to the project. In this article we will see costing and estimation.

COSTING

To know the cost of producing a software system or product is very important for an organization as it decides a host of activities like pricing, profit sharing, and so on. It is also important to monitor the costs to keep control over them. The technological revolution is rapidly transforming traditional development and marketing methods. The result has been a dramatic change in ratios between fixed and variable costs. To compete in today’s dynamic and rapidly changing global marketplace, organizations need to understand and control their overhead costs. In today’s environment the organizations need to practice activity based costing (ABC) rather than the traditional costing methods. We will see what is ABC, how it is different from the traditional costing methods and so on in the next few sections.

ACTIVITY BASED COSTING (ABC)

ABC attributes variable, fixed and overhead costs directly to each product or service by using the activities required to produce the product or service as a means of allocation. With ABC the cost of a product or service equals the cost of consumables and other materials plus the sum of the cost of all activities used to produce the product or service. Activity-based management (ABM) is a system using ABC to do costing and cost control. The objective of this article is not go into the implementation details of ABC. That is beyond the scope of this book. We are trying to give an overview of ABC and why we consider it important for software organizations to implement it. For detailed information on ABC, the readers are directed to the following sources (and also to the sources in the selected bibliography):

1. Hicks, D. T., Activity-Based Costing: Making it Work for Small and Mid-Sized Companies (Second Edition), John Wiley & Sons, 1999.
2. Forrest, E., Activity-Based Management: A Comprehensive Implementation Guide, McGraw-Hill, 1996.
3. Player, R. S., and Keys, D. E., (Eds.), Activity-Based Management: Arthur Andersen’s Lessons from the ABM Battlefield (Second Edition), John Wiley & Sons, 1999..

ABC vs. Traditional Costing

Traditional costing accumulates the cost of raw materials and direct labor, then applies overhead costs using an arbitrary allocation factor such as size of the project, number of employees in the project, etc. ABC relates resources to the actual activities that consume them. Conventional wisdom states that the production of a product or service produces costs. More accurately it is the activity involved in the production of a product or service that creates the cost. So, if we agree that an activity involves cost, then it follows that the actual cost of a product or service should be the sum total of the costs of each activity required to produce it. By breaking down product cost according to individual activities or events, costs can be controlled by managing each of the activities and / or the events that cause the cost-consuming activity.

In both traditional costing methods and ABC, the direct labor costs are allocated to each project, product or service. So if a person has worked a certain number of hours in a project, then the cost incurred by the company for that person for that much time is the direct labor cost. This is a reasonably straightforward part if the company has accurate records of who has worked in each project and for how many hours. The allocation of utilities proves to be a bit more challenging. In the absence of a metering mechanism the utilities are allocated to the different projects based on some factor like size, head count and so on. But this creates a problem. Suppose there is a project that uses the telephone a lot; the client is in another country and there is a daily teleconferencing. The team size of the project is 3. So if the organization is using the team size as the allocation factor, this project will be allocated only a portion of what it has spent by way of communication expenses. This results in wrong cost information.

ABC does not allocate overheads based on one or two arbitrary methods such as team size, project duration and so on that have little or no relationship to how a product or project uses the overhead services. Instead, ABC systems identify how these resources are consumed by each product or project and attach values according to this consumption pattern.

Benefits of ABC System

An ABC system has the benefit of being a highly effective control tool. In the traditional system, the theory is that the production of a product creates the cost. That view examines cost after it has been incurred. It is easy to see that cost once expended cannot be controlled. So the contribution of the traditional costing system in controlling the cost is limited to doing a postmortem and telling the management that the costs were higher and should have been controlled. ABC examines cost in a new and more controllable way. The cost of all products and services is the total cost of all the activities consumed by the product or service. So by monitoring the activities and the related costs, the management can take corrective actions before the cost overrun occurs. This is not possible in the traditional way, as we know that the cost overrun occurred only after it has occurred.

ABC systems focus on activities rather than costs. By organizing the work process into distinct activities, a significant control advantage is gained. Controlling the activity rather than the cost is the objective of ABC. In ABC systems control begins by separating activities into value-added and non-value-added categories. If a value added activity is being consumed, costs may be increasing, but so is value. If a non-value-added activity is increasing, so are the costs, but with no added benefit. Therefore, an important aspect of ABC is to control the non-value-added activities. This is achieved by providing the reports to the managers and project leaders about the cost for each activity under the two categories. Control is almost automatic, as managers are provided with the opportunity to see the activities in their areas of responsibility as value-added and non-value-added. The will naturally place importance on reducing the costs of the non-value-added activities.

Why ABC Systems?

The purpose of ABC is to remove the distortions caused by traditional costing systems, such as absorption-based and direct costing. These traditional systems were adequate when direct labor costs were a large percentage of the product cost. However today this is no longer true. ABC takes the best attributes of absorption-based and direct costing and applies all indirect costs to products and services by analyzing the activity that actually produces the particular cost. This method treats all cost as if they were variable costs.

The use of ABC system provides a highly efficient means to modify the entire organizational process. It also provides the method to judge how changes in the performance of activities affect the overall cost. The ABC system not only provides a highly accurate method of costing but also promotes activity efficiencies by exposing activities that were once buried in an overhead pool. By separating the cost of these support activities, each subsystem can directly trace the effect of its efficiencies on the total project cost. Coupled with a responsibility accounting system, this information is highly motivational, since each team can see the impact of its actions on the overall cost of the system or product and soon each group will find ways to improve their efficiencies and reduce their costs.

Finally…

The experiences of managers who have used ABC systems indicate that a properly designed ABC system provides a strategic and tactical advantage far superior to traditional systems. ABC systems help managers understand and eliminate complexity. It provides managers with true cost and removes distorted cost information. ABC also helps managers understand the impact of their decisions like team size increase, over time, make or buy, outsourcing and so on. ABC can change the way managers decides the project team, hardware and software environment, use of tools and utilities and so on. In addition the managers will be able to identify and eliminate the non-value-added activities, thus reducing development costs.

ESTIMATION

Every organization needs to develop estimates (cost, time, etc.) to make intelligent decisions. It is necessary to have an idea—an estimate—how much a project is going to cost. The estimation of project cost is required for sending proposals, bidding, working capital management, etc. The cost estimation and planning is basically a project management function. Usually the costing is carried out along with the scheduling. The principle components of project costs are:

• Hardware costs
• Travel and training costs
• Effort costs (salary for software engineers)
• Allocation of the organizational overheads

The dominant factor among the above is the effort cost. This is also the most difficult component to estimate and control and has the most significant effect on overall costs. Software cost estimation is a continuing activity that starts at the proposal stage and continues or revised throughout the lifetime of a project. Projects usually have a budget and continual cost estimation is necessary to ensure that there are no time and cost overruns. The different techniques of software cost estimation are:

• Algorithmic cost modeling – The most scientific, although not necessarily the most accurate, approach to costing and scheduling is to use an algorithmic costing model. Such a model can be built by analyzing the costs and attributes of completed projects. This method uses an algorithm to calculate the software cost estimate as a function of a number of variables (like lines of code (LOC), function points, complexity of the software and so on) that are considered to be the major cost drivers. The basic difficulty with algorithmic cost modeling is that it relies on the quantification of some attribute of the finished software product like number of lines of code. Cost estimation is most critical early in the software process long before the product is completed and so the person who does the costing has to depend on his experience and intuition to estimate the appropriate attribute value for input to the costing model. An example of the algorithmic model is the COCOMO model [1] developed by Boehm. Algorithmic models are objective, free from bias, repeatable and are objectively calibrated using previous experience. But these models are unable to deal with exceptional situations, exceptional personnel, exceptional teamwork and so on.
• Expert judgment – One or more experts on software development techniques to be used and on application domain are consulted. They each estimate the project cost and the final cost estimate is arrived at by discussions and consensus. This method relies on the experts making educated guesses at the required project attributes. The accuracy of such estimates clearly depends on both the expert’s understanding of the qualitative properties of the project being estimated, the capabilities of his organization and its software engineers and on their experience with pervious projects. One way to improve the accuracy of this technique is get the opinion of more than one expert.
• Estimation by analogy – This technique is applicable when other projects in the same application domain have been completed. The cost of the new project is estimated by analogy with these completed projects. Here the approach is like “It took Mathews 3 months to design code and test the ‘Helpdesk’ system. Bob is less experienced but the project is less complex. So it will take 2.5 months for him to finish the project, and so on.” Here the strength and weakness of this technique is that the estimation is based on a previous project. If the conditions of the base project and the estimated project are the same, the estimations will be accurate otherwise it will be inaccurate.
• Parkinson’s law – Parkinson’s Law [2] states that work expands to fill the time available. In software costing, this means that the cost is determined by available resources rather than by objective assessment. If the software has to be delivered in 12 months and 5 people are available, the effort required is estimated as 60 person months. Parkinson’s Law is not a recommended practice as it is inaccurate and is without any scientific basis and most often produces estimates that are grossly wrong.
• Pricing to win – The software cost is estimated to be whatever the customer has available to spend on the project. The estimated effort depends on the customer’s budget and not on the software functionality. This is basically a method to win a software contract, but it often puts the organization into trouble as the estimate in most cases turn out to be so low that the organization will incur huge losses.
• Top-down estimation – A cost estimate is established by considering the overall functionality of the product and how that functionality is provided by the interacting sub-functions. Cost estimates are made on the basis of the logical function rather than the components implementing that function. The disadvantage of this approach is that it does not take into account of the complexity and technical difficulties of the subsystems and sometimes misses components altogether.
• Bottom-up estimation – The cost of each component is estimated. All these costs are added to produce a final cost estimate. Both top-down and bottom-up approach can be done in conjunction with the other techniques mentioned above.

Each technique, as we have seen, has its own advantages and disadvantages. The most important point is that no method is better or worse than the other (except for the Parkinson’s Law and Price-to-win estimation). It is the type of the project, amount of historical information available, etc., that usually decides which technique is to be chosen. In the case of large projects, several cost estimation techniques should be used in parallel and their results compared. If these techniques result in radically different costs, it implies that not enough costing information is available. More information should be sought and the costing process should be repeated until the estimates converge. Software costing is often simply a matter of experience or political judgment and these skills come only through experience. Of the above mentioned methods the most commonly used ones are:

• Estimation by expert judgment
• Estimation by analogy
• Algorithmic Estimation.

One of the more recent estimation techniques is the Proxy-Based Estimation (Probe) [3] by Humphrey. In this technique one combines the basic design for the product with the historical size data (proxies) to estimate the size of the new product. In estimating the size, the project is broken down into smaller subsystems. These subsystems most often will be similar to the subsystems from the previous projects, the value for those parts can be estimated with a high degree of accuracy. Here the more historical data that one has the more accurate the results. There is another technique Putnam [4] combines the low, high and most likely estimates to arrive at the final estimate.

Here we would like to warn about the over dependence on historical data in estimation. Historical data can be used as a guideline or can be used to verify whether the estimates are way out of target. But too much dependence on historical data can result in very inaccurate results. The reason for this is that in the software development no two projects are the same. The technology is changing every day, the people, their individual capabilities, the project team composition, the capabilities of the team and so on will not be the same for two projects. Technological advancements or programming practices alone can make tremendous differences. A project that is done without CASE tools and one done with a CASE tool will have different time and cost estimates, even if the functionality and all other parameters are the same. So historical data should be kept, the database should be updated after each project, but too much reliance on historical data should be avoided.

In our experience we have found that a combination of the Delphi technique and the PERT-Based Beta distribution method (using the high, low, most likely estimates) gives the most accurate results. In this method, the first thing we do is to assemble a panel of experts. The number in the panel should be 3 – 6. These people should be familiar with the organization, its personnel, the capabilities and limitations (of both the organization and the personnel) in addition to the technological issues involved in the project. Senior managers, project leaders, QA personnel, etc. are ideal candidates to be part of the panel. The project manager or the person in-charge of the project briefs the panel about the project. The panel members can ask questions and clear their doubts about the project in this meeting. The presentation gives an overview of the project, the functionality that is expected and if possible the main modules of the project. Any specific questions that the panel members have are discussed in the meeting. The panel members also discuss and arrive at a project break down structure. Or in other words, the panel members decide on how the project should be broken down into the various modules or subsystems. Here the level up to which the project should be broken down is a consensus decision of the panel members as they are the people who will be estimating. Stop at a level that is comfortable to all. A project breakdown to the minute-component level is not required. Here the group who is doing the estimate is an expert panel.

Once the meeting is over, the panel is asked to give the estimate. Here the panel should make three estimates high (a pessimistic approach which assumes a situation where everything will go wrong), low (an optimistic approach which assumes a situation where everything will work as planned) and most likely. The three estimates should be done for each subsystem. It is important is that the project should be divided into subsystems (the project breakdown structure) before doing an estimate. The final estimate is calculated using the following formula:

Estimate = (High + 4*Most Likely + Low)/6.

The estimate is calculated for each subsystem using the above formula. Here consider an example. The high, low and most likely values for one subsystem were 6, 4 and 5. The estimate will be 5 ([6+20+4]/6). The estimate will also be 5 if the values were 12, 2 and 4. But in the second case the degree of uncertainty is much higher because of the wider spread between the optimistic and pessimistic values. A large difference between the high and low values signifies too many unknowns and should require more attention. We must calculate the percentage of error, which will give the degree of confidence in the estimate based on the standard deviation and the estimate. Standard deviation (SD) and error percentage for each subsystem is calculated using the following formula:

SD = (High – Low)/6
Error percentage = (SD/Estimate)*100

For example, the SD and error percentage for the first set of values (6,4, and 5) are 0.33 and 6.67. The SD and percentage of error for the second set of values (12, 2 and 4) are 1.67 and 33.4. If the percentage of error is more than 10 - 15, then the estimate needs to be reviewed again. The panel should sit together and analyze the steps that they took, the assumptions that they made to reach the values and find if there is anything that need to be changed, added, removed and so on. If there is some difficulty in estimating the subsystem, then break it down into smaller components and then do the estimate. This process should continue until the percentage of error is less than 10. The estimates of the subsystems can be added together to get the total estimate (TE) for the project. The total standard deviation (TSD) and the total error percentage are calculated using the following formulae:

• TSD = Square root (Sum (SD²))
• Total error percentage = (TSD/TE)*100

If the total percentage of error is too high the estimates are again reworked till the error percentage is within acceptable limits. The advantage of this system is that it uses the experience and expertise of senior professionals; it takes into account the nature, strength, capabilities and limitations of the organization, its personnel and the team. It takes into account the technological environment and it does not rely heavily on historical data or past performances. Here we would like to make one thing very clear; we are not advocating against the use of historical data, but too much reliance on historical data in this constantly changing environment can result in inaccurate estimates. So historical data can be used as guideline but for each new project the estimation should be done afresh. Software development projects are different form other projects. For example, the time taken for typing a 250-word page by a person with 30 wpm typing speed will be the same every time such an activity is performed. But in the case of software development where the number of variables and the degree to which each variable can change is very high, estimation based on historical data alone should be avoided.

CONCLUSION

In this article we saw costing and estimation. These are two important functions that decide the success of an organization. We have seen activity-based costing (ABC) and its benefits. We also saw an overview of the different estimation methods and a new estimation method, which is a combination of the Delphi technique, and the PERT-Based Beta Distribution method.

REFERENCES

[1] Boehm, B. W., Software Engineering Economics, Prentice Hall PTR, 1981.
[2] Parkinson. G.N., Parkinson’s Law and Other Studies in Administration, Houghton-Mifflin, 1957.
[3] Humphrey, W. S., A Discipline for Software Engineering, Addison-Wesley, 1995.
[4] Putnam, L. and Myers, W., Measures of Excellence: Reliable Software on Time, Within Budget, Yourdon Press, 1992.

SELECTED BIBLIOGRAPHY

1. Beaujon, G. J. and Singhal, V. R., “Understanding the Activity Costs in an Activity-Based Cost System, Journal of Cost Management, Spring, 1990, pp. 55-72.
2. Boehm, B. E., et al, Software Cost Estimation with COCOMO II, Prentice Hall PTR, 2000.
3. Brimson, J. A., Activity Accounting: An Activity-Based Costing Approach, John Wiley & Sons, 1997.
4. Cokins, G., Activity-Based Cost Management Making It Work: A Manager’s Guide to Implementing and Sustaining an Effective ABC System, McGraw-Hill, 1996.
5. Cooper, R., The Rise of Activity-Based Costing—Part One: What Is an Activity-Based System? Journal of Cost Management, Summer, 1998, pp. 45-54.
6. Cooper, R., The Rise of Activity-Based Costing—Part Two: When Do I Need an Activity-Based System? Journal of Cost Management, Fall, 1998, pp. 41-48.
7. Cooper, R., The Rise of Activity-Based Costing—Part Three: How Many Cost Drivers Do I Need? Journal of Cost Management, Winter, 1998, pp. 34-46.
8. Cooper, R., The Rise of Activity-Based Costing—Part Four: What Do Activity-Based Cost Systems Look Like? Journal of Cost Management, Spring, 1989, pp. 38-49.
9. Forrest, E., Activity-Based Management: A Comprehensive Implementation Guide, New York: McGraw-Hill, 1996.
10. Londeix, B., Cost Estimation for Software Development, Reading, MA: Addison-Wesley, 1988.
11. Nair, M., Activity-Based Information Systems: An Executive’s Guide to Implementation, New York: John Wiley & Sons, 1999.

Introduction
Training and Development

Training Needs and Objectives
Training Program Evaluation

Fitting the Employee to the Job
People Capability Maturity Model(P-CMM)
Conclusion
References
Selected Bibliography

INTRODUCTION

The three major areas of human resources management (personnel management) are selection, development and evaluation of the personnel. The personnel selection includes the tasks like determining the characteristics and skills of people who are likely to succeed at a given job in the organization, identifying the candidates, obtaining relevant information from each candidate, selecting the candidates who are best suited for the organization and so on. The development of the employees means induction of the new employees into the organization, making them familiar with the organizational procedures and practices, rules and regulations, helping them to adapt to the organizational culture, training them in the tools and techniques that are necessary to carry out their duties, helping them to maintain old skills and master new ones. The objective of the development program should be make the employees have a skill inventory that make them capable of adapting to new jobs quickly and effortlessly (smooth job transition). This might require training the employees in more than one skill (multi-skilling), job rotation, retraining and refresher courses and so on. Evaluation or performance appraisal of the employees is the responsibility of the HRD function even though their superiors or bosses evaluate the employees. It is the duty of the HRD mangers to see to it that the performance appraisals are done at regular intervals, the employee and the management are given the feedback and also to ensure that the employees are rewarded and are satisfied with the whole process. In this chapter we will be concentrating on the training and development function. We leave the selection and evaluation aspects as they are very thoroughly discussed in many books on HRD and personnel management.

The software development process is very different from other production or manufacturing processes. According to Jones [1] software products are intangible, as there is no need for physical mechanisms, structures, or processes. The software engineers do not use most of the concepts familiar to traditional engineering and their work is mostly independent of natural science. Also software products are much more complex and sophisticated thus requiring special care in conceptualizing, managing, organizing, and testing them. Software products are manufactured by a simple copying process, so almost all of the production effort is dedicated to design and development. So the software professionals need to be treated differently as their HRD requirements are different from the other professionals. These are the people who work on the cutting edge of technologies and they need to be continuously learning in order to keep themselves abreast of the latest developments in their areas of specialization. The HRD function of the organization should be aware of this difference and should develop a program and an environment that is conducive for the knowledge workers to update their skills.

In early days, when the software projects were simple and small, the design and all the details of a project was handled by a single individual. Even after the projects became larger and more complex the dependency on the individual still exist. For example, in many projects, if you remove a few key people, the projects will come to a standstill, basically because the other members of the team do not have the whole picture of the project. There is no way they can have the whole picture as no documentation exists and even if it exists, it could be understood only by the people who have written them. In many cases these documents will not be updated and will not be in sync with the system that is being developed. This kind of dependency on people is very dangerous. What will happen if a key person leaves the company or is not able to work anymore? In such cases, the entire process of design and development has to start all over again, as nobody knows what to do with the current system. It is because of this reason that the Software Engineering pioneers have always said that the software development has to be process dependent than people dependent. Boehm [2] has said that talented people are the most important element in any software organization and it is crucial to get the best people available. According to him the better and more experienced they are the better is the chance of producing first class results. But the problem with these geniuses is that their capability to work as a team, in most cases, will not be in the same class as their talent.

Software development has become too complex and software systems so huge that it is not possible to complete a project by an individual however talented he/she is. To develop software systems successfully, even the best and most talented professionals need a structured and disciplined environment, which is conducive for teamwork and cooperative development. According to Humphrey [3] “software organizations that do not establish these disciplines condemn their people to endless hours of repetitively solving technically trivial problems. There may be challenging work to do, but their time is consumed by mountains of uncontrolled detail. Unless these details are rigorously managed, the best people cannot be productive. First-class people are essential, but they need the support of an orderly process to do first-class work.”

TRAINING AND DEVELOPMENT

It is traditional to distinguish between training and development, presumably on the basis that development is a more ethereal and idiosyncratic activity than training. But both words refer to the process of purposefully changing the behavior of the trainees and there is little to be gained from positing two such processes. People change whether or not they want to change. Unplanned change, however, is unlikely to constitute progress towards the goals of the individual or of the organization. Therefore, it is important for the organizations in concert with its employees, to organize for planned change in skills, knowledge, work habits, social interactions, and attitudes towards work.

Training Needs and Objectives

Most training programs are designed on the basis of the HRD manager’s intuitive notion of what is needed. Intuition is sometimes right, but not always. So it is better to institute formal and systematic procedures for assessing the training needs. Careful planning by experienced people can go a long way towards producing an effective training program. To identify the training needs the first step is to identify the set of knowledge, skills and attitudes required by the job. The skill set of each individual should be identified to find out which are the areas in which the individual needs training. There is no point in giving an employee training in an area in which he is an expert. Here the best policy is that the HRD managers and the project management sit together and work out a list of all the skills that are needed for the software professionals in the organization. This will include the basic skills like touch-typing, speed-reading, communication skills (written and oral), presentation skills, and so on. This will also include the training on the programming languages, CASE tools and other tools used by the organization. The training list should also have the company policies, procedures and practices and so on. For example, if the company is having some certification (like ISO, CMM, etc.) then certain procedures and practices need to be followed. It is imperative that all employees know about these procedures and practices. Here when designing the training programs the objective is to make the employees as interchangeable as possible. We have seen the importance of having employees who can join a project and start working at their full potential in a very short time. To achieve this goal, it is very important that all the employees are familiar with the technical and cultural environment of the organization and the training program should be geared for that.

It is also important that the employees are trained in the social interactions. Attitudinal training programs are developed with the intention of modifying attitudes. Most such programs of this kind are called T-groups, encounter groups, or sensitivity training. A group of people meets over a period of several hours or days, with the guidance of a facilitator. They carry out exercises aimed at clarifying their attitudes and feelings. They discuss their feelings about themselves and each other, not necessarily in the context of work relationships. They are encouraged to develop an open trusting style. Many of such programs have an impact on the attitudes and behavior of the participants. However, there are at least two problems with such kind of training programs. Since feelings are expressed openly, the emotional atmosphere in a group may become highly charged and some people may find the tension so threatening and withdraw into a shell. Here the role of the facilitator is very important. The facilitator should watch out for such individuals and should be capable of offering professional counseling to those people. Another problem is that if all the members of a group are not participating in a group session, then the attempts of the participants to open up when they are back on job might not be reciprocated by the others who have not participated in such a program. So it is better to organize the sensitivity groups for all the employees of a project or modules or division.

Training Program Evaluation

An important but often ignored element of the training and development process is finding out the success of the training programs. This includes how well the trainees are learning or have learned the intended skills. The measure can be a typical classroom type test or a test in a simulated job environment. The performance of the trainees in the actual job environment can also be a measured. If the test results indicate that the effectiveness of a training program has not reached the expected levels, the causes should be identified and the program should be redesigned.

FITTING THE EMPLOYEE TO THE JOB

The organization can give the employees all kinds of training. As we have seen the employee training and development programs should be designed to ensure maximum interchangeability. This is essential in today’s highly competitive business environment. An organization that has a high percentage of interchangeable employees will definitely have an edge over its competitors. The interchangeability can be increased by job rotation (giving the employees different tasks to perform), multi-skilling (training the employees in multiple skills) and so on. All software professionals are expected to be multi-skilled. They should have the basic skills like touch-typing, speed reading, communication and presentation skills, knowledge of the software engineering procedures like testing, debugging, code-walkthroughs, quality audits and so on. They should also be familiar with the organizations analysis, design, coding, testing and documentation, standards. They should be conversant with the certification requirements and procedures if the organization has some certification like ISO, CMM, etc. The software professionals should also be aware of the latest developments and technological advancements in their areas of specialization. The organization should have an environment that is conducive for all these; as the software professional is an information worker and without information and knowledge the value of the employees will be less.

After stressing the importance of interchangeability, job rotation and multi-skilling, it should be pointed out that not all employees are capable of changing their tasks frequently. Or in other words, the degree of interchangeability varies from employee to employee. Another factor is that some employees might not like certain tasks, as they do not have the aptitude for it. For example, not all employees might be interested in image processing or documentation even though they have the necessary knowledge. Assigning an employee to a task for which he does not have aptitude will reduce his productivity and he will soon become dissatisfied and frustrated. This should be avoided if possible. But in extreme cases this might be the only alternative (as there might not be anyone else to spare). In such cases, the employee should be told that it is only a temporary arrangement and will be remedied at the first available opportunity. For assigning each employee to his preferred task, the management should know the employee’s preferences. This can be captured as part of the employee skill inventory database. So the project team formation, task allotment and job assignment should be done based on the skill inventory database. Assigning the right person to the job will improve the productivity, increase the job satisfaction and is a sure recipe for success.

PEOPLE CAPABILITY MATURITY MODEL (P-CMM)

The People Capability Maturity Model (P-CMM) is a maturity framework that guides an organization in managing and developing its workforce. The P-CMM principles guide organizations to improve their ability to attract, develop, motivate, organize, and retain the talent needed to steadily improve their organizational capability. It describes an evolutionary improvement path from ad hoc, inconsistently performed workforce practices, to a mature, disciplined development of the knowledge, skills, and motivation of the workforce. We strongly recommend you read the following documents to get a good idea of P-CMM, as the techniques mentioned are excellent in improving the quality of your workforce:

• Curtis, B., Hefley, W.E., and Miller, S., Overview of the People Capability Maturity Model (CMU/SEI-95-MM-01), Pittsburgh, PA: Software Engineering Institute, Carnegie Mellon University, 1995.
• Curtis, B., Hefley, W.E., and Miller, S., People Capability Maturity Model (CMU/SEI-95-MM-02). Pittsburgh, PA: Software Engineering Institute, Carnegie Mellon University, 1995.

CONCLUSION

This article deals with three major areas of Human Resources Development—Selecting, Developing and Evaluating Personnel. In organization of all kinds the management designs and defines the job for the employee. In practice, however, an explicit effort to design a job is seldom undertaken. But it is absolutely necessary to determine the precise nature of the job and tailor the job to the person and not vice versa. This article explains the techniques to do this matching so that the employee productivity is increased and job satisfaction is guaranteed. This article aslo discusses how to do an aptitude analysis of the employees and how to find the jobs that are best suited for him/her. The article deals with techniques like job rotation, and multi-skilling so that the employees are satisfied with the work environment and will perform at their best potential.

REFERENCES

[1] Jones, G.W., Software Engineering, John Wiley & Sons, 1990.
[2] Boehm, B, Software Engineering Economics, Prentice-Hall, 1981.
[3] Humphrey, W. S., Managing the Software Process, Addison-Wesley Publishing Company, 1989.

SELECTED BIBLIOGRAPHY

1. Berk, R. A. (Ed.), Performance Assessment: Methods and Applications, The John Hopkins University Press, 1986.
2. Curtis, B., Hefley, W.E., and Miller, S., Overview of the People Capability Maturity Model (CMU/SEI-95-MM-01), Software Engineering Institute, Carnegie Mellon University, 1995.
3. Curtis, B., Hefley, W.E., and Miller, S., People Capability Maturity Model (CMU/SEI-95-MM-02), Software Engineering Institute, Carnegie Mellon University, 1995.
4. Eder, R. W. and Ferris, G. R. (Ed.), The Employment Interview: Theory, Research and Practice, Sage Publications, 1986.
5. Gagne, R. M. (Ed.), Instructional Technology: Foundations, Erlbaum, 1987.
6. Goldstein, I. L., and Associates, Training and Development in Organizations, Jossey-Bass, 1989.
7. Humphrey, W.S, Managing the Software Process, Addison-Wesley, 1989.
8. Humphrey, W.S., A Discipline for Software Engineering, Addison-Wesley Publishing Company, 1995.
9. Humphrey, W.S., Introduction to Team Software Process, Addison-Wesley, 2000.
10. Humphrey, W.S., Introduction to the Personal Software Process, Addison-Wesley, 1997.
11. Humphrey, W.S., Managing Technical People: Innovation, Teamwork and the Software Process, Addison-Wesley, 1997.
12. Muchinsky, P., Psychology Applied to Work: An Introduction to Industrial and Organizational Psychology (3rd Edition), Brooks/Cole, 1990.
13. Paulk, M.C., et al., The Capability Maturity Model for Software: Guidelines for Improving the Software Process, Addison-Wesley, 1995.
14. Smith, M. and Robertson, I. (Ed.), Advances in Selection and Assessment, John Wiley & Sons, 1989.
15. Stevenson, C., Software Engineering Productivity: A Practical Guide, Chapman & Hall, 1995.

Introduction
Industrial Engineering and Software Development
Origin And Evolution Of Industrial Engineering

Time And Motion Study
Predetermined Motion Time Systems
Modern Industrial Engineering Techniques

Why Industrial Engineering
Conclusion
References
Selected Bibliography

INTRODUCTION

Industrial Engineering (IE) is one among the broadest of all management and engineering functions. Time study people consider themselves as industrial engineers, so do process planners, production planners, method study engineers, plant layout designers, manufacturing systems analysts, wage and incentive scheme designers, and so on. The fact is that all of them are performing duties that fall within the broad range of activities generally considered part of the industrial engineering function. In fact, the range of the industrial engineering activities is so broad that, there is a saying among engineers that “Industrial Engineering consists of all of the engineering and management activities that cannot be clearly designated as a part of other engineering or management functions.” The field of industrial engineering is a large umbrella that includes a wide variety of tasks established for the purpose of designing, implementing and maintaining systems for effective operations.

Institute of Industrial Engineers (IIE)[1] define industrial engineering as follows: “Industrial Engineering is concerned with the design, improvement and installation of integrated systems of men, material and equipment. It draws upon specialized knowledge and skill in the mathematical, physical and social sciences, together with the principles and methods of engineering analysis and design to specify, predict and evaluate the results to be obtained from such systems.”

INDUSTRIAL ENGINEERING AND SOFTWARE DEVELOPMENT

Industrial engineering consists of a host of methods and techniques that are aimed at improving efficiency, reducing and eliminating waste, improving working conditions, reducing stress, improving employee cooperation and morale, increasing development productivity, improving quality and so on. These are also the aims of software engineering or the scientific software development process. Thus the software development discipline could benefit a great deal by applying the industrial engineering principles to the software development process. Most of the industrial engineering techniques that are practiced on the shop floor or manufacturing shops could be applied with equal success to the software development process.

For example, Harrington Emerson, an Industrial Engineering pioneer of the last century, in his book The Twelve Principles of Efficiency [2], had laid out 12 principles for effective operations. These principles include clearly defined schedules, common sense, competent guidance and training, discipline, reliable and adequate records (documentation), standards and conventions, good working conditions, written instructions for better communication and so on. We can clearly see that the principles espoused by Emerson (in 1911) are just as relevant to software development process as they are to any other industry. In fact, many of these principles are used in the software development process.

There are many IE techniques (some of them new to the software industry, some of them already in practice in some companies) that could be used to the software development process. These techniques, if implemented to the software development process, will bring all the benefits (like improving efficiency, reducing and eliminating waste, improving working conditions, etc.) that we have discussed above. The author have applied these techniques to software projects of various sizes and complexities and also in different organizations. I have found these techniques successful and their results very rewarding. For example, the skill inventory is a technique that is being used in the shop floor for a variety of purposes like employee selection, line balancing, training, multi-skilling, and so on. Same technique could be for the software professionals and the skill inventory database could be used for a variety of purposes like project team selection, configuration management activities and quality audits, employee training, and so on. I will discuss more about these later.

ORIGIN AND EVOLUTION OF INDUSTRIAL ENGINEERING

We have seen in the earlier section that industrial engineering is an umbrella that includes a wide variety of tasks. The ambiguity of what constitutes industrial engineering probably has its roots in the way it developed as a profession, which dates back many decades before the name ‘industrial engineering’ was ever coined in the years of industrial revolution. Before the industrial revolution goods were produced by individual craftsmen in a cottage-system. The late 18th century saw the beginnings of the industrial revolution. But with the industrial revolution the production methods changed and the factory system of manufacturing goods came into existence. The industrial revolution triggered a number of inventions and innovations like new machinery for mass production of goods, better power sources and so on. Thus the industrial revolution fueled the growth of the factory systems and soon it became difficult to manage and organize the production because of the magnitude of the operations and the lack of any procedures and practices. So people began to think of ways and means to organize the factories and mass production processes. One of the earliest pioneers of in factory organization was Sir Richard Arkwright (England), the inventor of the spinning frame. In the 1760s, he developed and implemented the first management control system to regulate the production and output of factory workers. In 1773, Sir James Watt, another British inventor, along with his associate Matthew Boulton, constructed a factory in Soho to produce steam engines. Sir James Watt introduced skill’s training for craftsmen. This training involved training each worker in a specific skill that he was supposed to perform. The skill’s training system produced dramatic productivity improvements. Sir Watt had also developed many schemes and procedures for organizing and managing factories. In the early 1800s, James Watt, Jr., and Matthew Robinson Boulton established the first complete machine-manufacturing factory in the world. They preplanned and built an integrated manufacturing facility and instituted a cost control system that was designed to decrease waste and improve productivity. Another Englishman who made significant contributions to the industrial engineering field was Charles Babbage. Babbage developed systems for improving the factory operations. He developed a number of analytical methods for productivity improvement. His contributions were published in his well-acclaimed book The Economy of Machinery and Manufacturers [3]. The work of these British researchers were published and spread to the other parts of Europe and to the United States. By the end of the 19th century the methods and procedures that originated in England were being practiced in the United States also.

One of the pioneers of industrial engineering whose work had a great impact on the profession and also on the fellow researchers (both in the US and Europe) was Frederick Winslow Taylor. In 1878 Taylor joined the Midvale Steel Works where he started as a worker and progressed to become the chief engineer in 1880. During this period, Taylor developed a series of devices to help in cutting metals and came to the conclusion that scientific advancement has to go hand in hand with organizational developments. Taylor saw that if he could improve the way the machinery worked, he could also analyze and improve the operation and management of the machines. He restructured and redefined the jobs in his factory and introduced a set of procedures telling the workers how exactly to perform their jobs. Stopwatches were distributed to the foremen, as Taylor attempted to divide jobs into separate elements. By examining the times taken for each job element, Taylor was able to develop a piece rate system. He was able to prove scientifically that a machine operator could produce a specific quantity of output in a given time. Taylor restructured the pay system around these calculations of what people should be able to achieve, creating a ‘differential piece rate’ for each job.

The skilled-workers when confronted with the differential piece rate system and other productivity improvement schemes posed a few problems for Taylor and his attentions switched to laborers. Getting the best from each employee required robotic obedience to Taylor’s interpretation of what a job involved. Taylor believed that people worked solely for money. Nothing else mattered except that they did their work in the most efficient, scientific way possible. In a lecture at the Harvard Business School, Taylor argued: ‘The most serious of the delusions and fallacies under which workmen, and particularly those in many of the unions, are suffering is that it is in their interest to limit the amount of work which a man should do in a day.’

The rudiments of what has to become known as ‘scientific management’ were put in place by the time Taylor left Midvale in 1889. The publication of A Piece Rate System [4] in 1895, created enough of a stir to keep Taylor at work as a consultant to many industries. In Shop Management [5] Taylor wrote that ‘Good manners, education and even special training and skill count for less in an executive position than the grit, determination and bulldog endurance that knows no defeat.’ Taylorism, the movement he gave his name to, was perhaps the first true management movement. Taylor had the loyal and enthusiastic support of many prominent industrialists including the Michelin brothers. Even Lenin observed in Pravda: ‘we should try out every scientific and progressive suggestions of the Taylor system.’ To put his ideas into a more accessible form, Taylor published The Principles of Scientific Management [6] in 1911. In this more popular form, Taylor argued that scientific methods should replace indiscriminate means of measurement and working, people should be scientifically selected and trained, and work should be equally divided between managers and workers. The flaw in his simplistic and populist approach was that it focused the argument on the personnel issue, rather than engineering or mechanics were Taylor excelled. Taylor gained a number of critics who felt that his philosophy on how work should be organized and managed was dehumanizing. But considering the contributions Taylor made to the field of management and management thinking, he became known as the “Father of Scientific Management.”

Although its form has changed somewhat, Taylor’s formula is still an important and integral part of industrial engineering. Taylor’s formula emphasized that work must be well organized and the worker must be given a specific assignment and a specific method to be followed. Unfortunately, some practitioners following Taylor often achieved outstanding gains in labor productivity simply by establishing piecework and wage incentive plans based on production standards. These schemes began to fail when some of the unscrupulous engineers and managers diluted the production standard thus cheating the workers. The natural result was that workers started resisting each and every change in production standards, even when there were legitimate reasons for the changes. Many worker attitudes that were created by these malpractices remain unchanged to this day in many companies.

In the 1912, Frank and Lillian Gilberth set about advancing Taylor’s theories on scientific management. Frank was a successful businessman and Lillian was an eminent industrial psychologist. Gilberth believed in discovering the best means of performing each part of a job so that it could be carried out more effectively. This required the thorough analysis of each element of the job and Gilberth pioneered the use of cameras in examining how people went about their work. According to Gilberth [7], a general rule of motion economy is to make the shortest motions possible. Eliminating unnecessary distances that worker’s hands and arms must travel will eliminate miles of motions per man in a working day as compared with usual practice. In his work Gilberth studied acceleration, to what degree motions were automatic, how motions combined in sequence and the costs of a motion. He found that each motion should be made so as to be most economically combined with the next motion, like a ‘billiard player who plays for position.’ Gilberth’s experience in the construction industry encouraged him to use his methods in bricklaying and during the First World War for training and rehabilitating the disabled. With the bricklayers, Gilberth was able to raise the individual output from 1000 to 2700 bricks per day. Lengthy research allowed him to classify the elements of human motions. He isolated and identified the basic motions that make up all human activity and called them ‘therbligs’ (Gilberth spelt backwards). He recorded seventeen basic elements and developed a therblig chart, which recorded a series of elements involved in a complex activity such as working a machine tool.

The Gilberths took a broader view than Taylor, arguing that if an organization is not concentrating on the welfare of the individuals in that organization but only on the welfare of the organization as a whole, then it will not be able to keep its employees. At New England Butt Company in Providence, Gilberth put Taylor’s principles into practice but the difference was that the employees were not depersonalized automatons. Achieving the greatest level of efficiency demanded the attention of a wide variety of specialists. According to Gilberth [8], the determination of the path, which will result in the greatest economy of motion and the greatest increase of output, is a subject for the closest investigation and the most scientific determination. Not until data are accumulated by trained observers can standard paths be adopted. The laws underlying Physics, Physiology and Psychology must be considered and followed. The development of therbligs paved the way for research for the development of predetermined standard times for jobs based on predetermined methods and time values.

Time and Motion Study

Therbligs formed the basis for the research that ultimately led to the development of methods-time-measurement (MTM), which is still widely used by industrial engineers.

We have seen that the spectacular increases in production that came from the wage incentive plans failed after sometime because of the shady practices of the engineers and managers who manipulated the production standards. This led to two important aftereffects. One, because the production could be raised by manipulating the standards, very little attention was paid to the importance of good methods in production. Two, the workers realized that if they produced more, the managers would manipulate the standards and so they started manipulating their output so that their earnings did not appear to be excessive. These two factors led to an increased interest in the benefits of method studies. The Gilberth’s efforts in the field of motion study were till that time considered rather theoretical and impractical. In the 1920s and 1930s, there was a renewed interest in their work. In 1927, Maynard, Stegemerten and Lowry [9], wrote Time and Motion Study, which pointed out the importance of motion study and good methods. In 1932, Mogensen [10] published Common Sense Applied to Time and Motion Study, in which he stressed the work simplification principles. In 1937, Barnes [11] published Motion and Time Study, in which he stressed on the motion study aspect of industrial engineering.

During the depression and economic recession of the 1930s, many engineers started working on finding better ways to improve operations and efficiency. Mogensen [10] developed his work simplification procedure, which concentrated on using the talents of shop workers to improve methods. His approach was to train key manufacturing people in the correct working practices so that they could, in turn, conduct similar training in their own plants. The trainees applied what they learned (the correct working practices) to actual shop operations, which resulted in countless improvements. In 1939, Maynard and Stegemerten [12] wrote a book titled Operations Analysis that detailed a procedure whereby an industrial engineer could systematically analyze all the working conditions (like workplace arrangement, heat, noise, lighting, etc.) of an operation to arrive at the best method for doing the job. Along with improved methods and time study procedures, various job evaluation and merit rating methods were developed that scientifically determined wage rates that were closely related to job content.

Predetermined Motion Time Systems

The scope of industrial engineering function began to expand rapidly in the years immediately following World War II and has continued to do so since then. In the 1940s and 1950s, many researchers concentrated their efforts on developing predetermined motion time systems. The first person to develop such a system was A.B. Segur, who created the MTA or Motion Time Analysis. This system did not become popular as Segur published little information on the system preferring to use it only in his consulting practice. In the late 1940s Maynard, Stegemerten and Schwab developed MTM or Methods-Time Measurement. This was the result of a motion-time study sponsored by Westinghouse Electric Corporation. This system gained universal acceptance and became the de facto standard. There were many other systems like the Work Factor (WOFAC) system developed by Quick, Shea and Koehler at the Radio Corporation of America (RCA) plant in Camden, New Jersey.

Another system was the BMT or Basic Motion Times, developed by Barnes in Canada. Engineers at General motors, General Electric and other companies came up with systems similar to MTM for their internal use. Now the predetermined motion time standards have been computerized thus making it easier and faster to use. Some such systems are Computerized MOST or Maynard Operation Sequence Technique (H. B. Maynard and Company, Inc.), CATS or Computer Assisted Time Standards (US Department of Defense), Autorate (IBM Corporation), UniVation (Management Science, Inc.), etc. The next step in the field of work measurement was the integration of computerized time standards with automated process planning and other forms of computer assisted design and manufacturing (CAD-CAM) and computer integrated manufacturing (CIM). One such system is AutoMOST (H. B. Maynard and Company, Inc.), which processes information from other manufacturing systems to set standards automatically.

Modern Industrial Engineering Techniques

While the industrial engineers in the manufacturing industries were concentrating on the time and motion studies, many changes were taking place in other areas of industrial engineering. Industrial engineers began to use mathematical techniques and accounting solutions to manufacturing problems and costs. Computers improved the efficiency and accuracy of industrial engineers, resulting in improved productivity of the industrial engineering function. Along with computer technology, innovative management techniques that incorporated team approach, small group teams, ergonomics, just-in-time (JIT) technologies and quality programs like quality circles, zero-defect manufacturing, value analysis, etc. increased productivity through the combined effort of employees at all levels of the organization. All these new techniques are having a positive effect on the industrial engineering profession. Today, the challenge the industrial engineers face is the integration of the technological tools and human resources in the best possible manner.

Today, the industrial engineering function is not limited to the production and pre-production activities. It has become an integral part of all functions of the organization—from product design to logistics management, from purchasing, inventory control and financial management to plant layout and quality assurance. Industrial engineers are actively involved in jobs ranging from employee training to ERP implementation.

More and more jobs in the shop floor are getting automated. Robots, artificial intelligence and expert systems are improving the manufacturing process. All these developments mean that the number of blue-collar workers is reducing and the ratio of the blue-collar to white-collar workers is becoming less and less. In the early 1960s, the ratio of the blue-collar to white-collar workers reached 50:50. In 1990, the Bureau of Labor Statistics [13] showed that 65% of the work force was in the white-collar or service area. In the year 2000, according to the Bureau of Labor Statistics, 90% of the work force is white-collar workers. According to the projections by the Bureau of Labor Statistics [14], the percentage of white blue-workers in 2008 will be less than 10%.

The reduction in the number of blue-collar workers and the increase in the number of white-collar workers are posing new challenges to the industrial engineering function. Industrial engineers who have been dealing with the shop floor productivity and efficiency problems have now turned their attention towards finding ways and means of improving white-collar productivity. Most of the techniques that the industrial engineers have applied in the shop floor are applicable to the offices also. So even though there are changes in the environment in which the industrial engineer works, the work of the industrial engineer remains, to a large extent, the same—improving efficiency and productivity, eliminating waste, improving working conditions and so on.

WHY INDUSTRIAL ENGINEERING

Industrial engineers determine the most effective ways for an organization to use the basic factors of production—people, machines, materials, information, and energy—to make a product or provide a service. They are the bridge between management goals and operational performance. They are more concerned with increasing productivity through the management of people, methods of business organization, and technology than are engineers in other specialties, who generally work more with products or processes.

To solve organizational, production, and related problems most efficiently, industrial engineers carefully study the product and its requirements, use mathematical methods such as operations research to meet those requirements, and design manufacturing and information systems. They develop management control systems to aid in financial planning and cost analysis, design production planning and control systems to coordinate activities and control product quality, and design or improve systems for the physical distribution of goods and services. Industrial engineers develop wage and salary administration systems, job evaluation and merit rating programs.

We have already discussed the highly competitive business environment that exists today. We have also seen the increasing complexity of the software development process. We have seen that industrial engineering function aims at improving productivity and efficiency and reducing defects and unnecessary work. We have seen the increase in the number of white-collar workers from 50% in the 1960 to 90% in 2000. This number is projected to increase as more and more blue-collar jobs get automated. Industrial engineers, for the last few decades have been concentrating on methods and practices to improve white-collar productivity. Improving white-collar productivity is not as easy as improving productivity on the shop floor as the white-collar work involves thinking, evaluation, decision-making, etc.—jobs that do not lend themselves readily for method study and other productivity improvement measures. But there are many elements in the white-collar work that can be improved. Also there are many areas where the industrial engineer can work in the case of the white-collar worker to make the working conditions better and more conducive for higher productivity. For example, redesigning the workstation of a computer programmer using principles of motion economy and ergonomics can result in higher productivity as the person can work for more time without fatigue. Also, an ergonomically designed workstation will go a long way in preventing cumulative trauma disorders and repetitive stress injuries that are associated with these jobs.

We know that the software development process is very different from other production or manufacturing processes. According to Jones [15] software products are intangible, as there is no need for physical mechanisms, structures, or processes. The software engineers do not use most of the concepts familiar to traditional engineering and their work is mostly independent of natural science. Also software products are much more complex and sophisticated thus requiring special care in conceptualizing, managing, organizing, and testing them. Software products are manufactured by a simple copying process, so almost all of the production effort is dedicated to design and development. But irrespective of these differences, there are a lot of areas in software development where industrial engineering techniques can be used. For example, method study is the systematic recording and critical examination of existing and proposed ways of doing work, as a means of developing and applying easier and more effective methods and reducing costs. The main objective of method study is the improvement of processes and procedures. If you look closely, method study has a lot of similarities with requirements analysis and system design. So the techniques used to analyze and critically examine the current method in method study could very effectively be used in the requirements analysis and system design phases of software development. Similarly, the principles of ergonomics, human-machine interaction, and motion economy could be used in designing more effective user interfaces for the software products. The total quality management (TQM) techniques that enable a company to achieve higher quality levels and elimination of defects can be employed in the software development process with equal success. The techniques used in designing plant layouts and the principles of designing safe and comfortable workplaces could be used in designing the computer workstations for the software professionals. In this book we will see how the different industrial engineering techniques, principles and procedures that could be applied to the software development process and how they could be applied effectively.

CONCLUSION

This article is an introduction to the discipline of Industrial Engineering. It discusses the evolution of industrial engineering, the major developments and the major players in that led to the development of this discipline. The article discusses how industrial engineering is practiced today—current role of industrial engineering. This is basically an article, which gives a bird’s eye-view of Industrial Engineering.

REFERENCES

[1] Institute of Industrial Engineers, 25 Technology Park, Atlanta/Norcross, GA.
[2] Emerson, H., The Twelve Principles of Efficiency, The Engineering Magazine, 1911.
[3] Babbage, C., The Economy of Machinery and Manufacturers, Charles Knight, 1825.
[4] Taylor, F. W., A Piece Rate System, McGraw-Hill, 1895.
[5] Taylor, F. W., Shop Management, Harper, 1903.
[6] Taylor, F. W., The Principles of Scientific Management, Harper, 1911.
[7] Gilberth, F. B., Motion Study, Van Nostrand, 1911.
[8] Gilberth, F. B., Primer of Scientific Management, Van Nostrand, 1912.
[9] Lowry, S. M., Maynard, H. B. and Stegemerten, G. J., Time and Motion Study and Formulas for Wage Incentives, McGraw-Hill, 1927.
[10] Mogensen, A. H., Common Sense Applied to Time and Motion Study, McGraw-Hill, 1932.
[11] Barnes, R. M., Motion and Time Study, Wiley, 1937.
[12] Maynard, H. B. and Stegemerten, G. J., Operation Analysis, McGraw-Hill, 1939.
[13] U.S. Department of Labor, Outlook 2000: Projection of Occupational Employment, 1988-2000, Bureau of Labor Statistics, April 1990.
[14] Braddock, D., Employment Outlook 1998-2008: Occupational Employment Projections to 2008, Occupational Employment, Bureau of Labor Statistics, November 1999 (Revised March 2000), pp 51-77.
[15] Jones, G.W., Software Engineering, John Wiley & Sons, 1990.

SELECTED BIBLIOGRAPHY

1. Byrd, J. and Moore, L. T., Strategic Planning for the Industrial Engineering Function, Van Nostrand Reinhold, 1986.
2. Clutterbuck, D. and Crainer, S., Makers of Management: Men and Women who changed the Business World, Pan Macmillan Ltd., 1990.
3. Emerson, H. P. and Naehrin, D. C. E., Origins of Industrial Engineering: The Early Years of a Profession, Institute of Industrial Engineers, 1988.
4. Gilberth, F. B. and Gilberth, L., The Psychology of Management, Sturgis and Walton, 1914.
5. Guoping, X. and Fajie, W., Industrial Engineering and Management Science, International Academic Publishing House, 1998.
6. Hicks, P. E., Industrial Engineering and Management: A New Perspective (Second Edition), McGraw-Hill, 1999.
7. Hicks, P. E., Introduction to Industrial Engineering and Management Science, McGraw-Hill, 1976.
8. Hodson, W. K. (Ed.), Maynard’s Industrial Engineering Handbook (Fourth Edition), McGraw-Hill, Inc., 1992.
9. International Labor Organization, Introduction to Work Study (Fourth Edition), International Labor Office, 1992.
10. Maynard, H. B. (Ed.), Industrial Engineering Handbook (Second Edition), McGraw-Hill, Inc., 1963.
11. Maynard, H. B. (Ed.), Industrial Engineering Handbook (Third Edition), McGraw-Hill, Inc., 1971.
12. Maynard, H. B. (Ed.), Industrial Engineering Handbook, McGraw-Hill, Inc., 1956.
13. National Research Council, Engineering Employment Characteristics, National Academy Press, 1985.
14. Salvendy, G., Handbook of Industrial Engineering (Second Edition), John Wiley & Sons, 1991.
15. Salvendy, G., Handbook of Industrial Engineering, John Wiley & Sons, 1982.
16. Salvendy, G., Handbook of Industrial Engineering: Technology and Operations Management (Third Edition), John Wiley & Sons, 2001.
17. Taaffe, M. R., Analytical Techniques & Operations Research, Engineering and Management Press, 1999.
18. Thomson, A., Employment Outlook 1998-2008: Industry Output and Employment Projections to 2008, Occupational Employment, Bureau of Labor Statistics, November 1999 (Revised March 2000), pp 33-50.
19. Turner, C. W., Mize, J. J., Case, K. E., Nazemetz, J. W. and Mize, J. H., Introduction to Industrial and Systems Engineering, Prentice Hall, 1992.
20. Zandin, K. B. (Ed.), Maynard’s Industrial Engineering Handbook (Fifth Edition), McGraw-Hill, Inc., 2001.
]]> http://www.alexisleon.com/art/2006/11/15/introduction-to-ie.html/feed http://www.alexisleon.com/art/2006/04/25/software-pm-with-swat.html http://www.alexisleon.com/art/2006/04/25/software-pm-with-swat.html#comments Wed, 26 Apr 2006 05:27:11 +0000 Alexis Leon http://www.alexisleon.com/art/2006/04/25/software-pm-with-swat.html Software Project Management with SWAT: Managing Software Development Projects Using Swift Action Teams (SWAT)

CONTENTS

Introduction
Project Management with SWAT
Case Studies
A Caveat…

INTRODUCTION

First let me tell you a story from the Indian folklore. Before the British colonized India, India was a group of kingdoms. Some of them were large, rich and powerful with strong armies but many were small, with limited defenses. The larger kingdoms used to conquer and annex their neighboring smaller ones. The defeated kingdom will be annexed to the victor’s empire and the defeated king will either become a subordinate to the victor and pay taxes or he will be dethroned and will be put in jail or killed. So usually the smaller kingdoms that didn’t have the might and army to fight the large empires surrendered their kingdoms and become feudatories, pledged their loyalty and agreed to pay tributes and taxes thus saving their throne.
There once was a small kingdom whose king refused to surrender. He had a small army of about 6000 men and he had to face an enemy whose army was almost ten times stronger. The king knew that with his small army he could not win the battle, if he used conventional methods of warfare. So he devised a plan. The king himself was a superior warrior, so was his commander-in-chief. They selected another eight warriors, each one a legend in his own right. All these men were leaders of exceptional caliber and with their mere presence were capable of inspiring their followers, increasing their morale, confidence, and fighting spirit to great heights, and galvanizing them into action. These warriors had such a fierce reputation that their enemies used to tremble at the sight of them.

In those days the battles were fought in a battleground where the two armies stood face to face and attacked each other. (It is like the typical battle scenes that we see in period movies like Brave Heart, Gladiator, The Last Samurai, etc). In our story the king divided his army into 6 groups each with 1000 men. He, his commander in chief and the other 8 soldiers formed another group. His strategy was like this. The six batteries (or columns) will attack the enemy (which contained more than 60000 soldiers) in unison. The elite group of 10 superbly capable warriors that he formed will be at the helm of one of the columns. Whenever the enemy pushed a column back, the ‘group of 10’ will move to the front of that column and will lead it. Since these group consisted of 10 people whose mere presence could sent shivers down the spines of the enemy soldiers, their presence will not only boost the morale of their soldiers but also will frighten the enemy soldiers. So they were able to thwart the enemy and carry the column that was pushed back to a forward base from where it can continue the fight. This group will move among the columns depending on the situation, keeping the entire army moving forward fighting the enemy and pushing it back.

During the battle, this plan was implemented and it worked like a charm. The mere sight of their heroes fighting along them and leading them, pushing the enemy back, charged up the king’s army. The enemy was frightened and in no part they were able to push the opposition back as when they were about to do so the ‘group of 10’ will appear there and the situation will change. This created a chain effect; the six columns of the king’s army knew that they could always count on the help of the elite fighting unit, if they were in trouble. So there confidence was up, morale was high and they fought with a new vigor. The success of one column rubbed on to the other columns and the morale, confidence and self-belief of the entire army rose to astonishing levels and gave them mental superiority, which in turn made them invincible. The king’s army won the battle and the enemy—an enemy that had a superior force— was defeated.

I have tried a variation of this technique in managing software projects. I have tried it in projects that had 80–90 people and 10–12 modules; I have tried it in small projects with 2–3 people. I have found that this technique always helps in improving employee morale, increasing the self-confidence and finishing the projects on time irrespective of the size and complexity of the project. I have named this technique “Project Management with SWAT.” SWAT stands for SWift Action Team.

PROJECT MANAGEMENT WITH SWAT

SWAT is a group of highly skilled and extremely brilliant software professionals who form an elite group similar to the ‘group of 10.’ This is the resource that the project management can depend in times of crisis. The SWAT functions the same way as the ‘group of 10’ functioned in the battle. They constantly monitor the progress of the various modules in a project. In the case of small projects, they monitor the progress of all the projects. The SWAT is allotted a separate room (I call it the war room) where they have all schedules of all the projects/modules. Whenever there is a project meeting a member from the SWAT attends it and gets the information on the progress of the project or module and updates the charts or the progress monitoring mechanism (for example, a project management package), so that all the people in the SWAT are always aware of the status of all the projects. When all the projects are on schedule, the SWAT members do not have any specific duty. They use this time to improve their skill inventory, make themselves thorough with the functionality of the projects, improve their knowledge on the tools that are being used in the project, and so on.

They will also act as quality auditors, configuration management auditors, and will manage the helpdesk for the project. But when the progress of a module or project is behind schedule (either due to some unaccounted problem, or due to employee turnover, or due to some other reason), the SWAT is deployed. Whether to deploy the full team or a few members is a decision taken within the SWAT after studying the situation. The SWAT members will join the project team members and help them in bringing the project on schedule or ahead of schedule. Since the SWAT members are familiar with the tools, the functionality and what is happening in the project they will be working on the full potential from day one. There is no time wasted in induction and training.
Now we will see how the SWAT is constituted. The SWAT should have a team leader (somebody as charismatic as the king in our story). The team members should be the best in the company. They are the people others will look up to, in case of an emergency. They are the gurus, experts, the geniuses or wiz kids of the company. They are the people around whom legends are created. These are exceptionally brilliant people whom the ordinary professionals admire.

So the company should assign its best and most efficient employees to the SWAT. The company should invest in these people and should create opportunities for them to excel within the company so that they can grow with the company. But these are the people who are actually running the business; these are the people who do not have time for anything else; these are the very same people, everybody will turn to in a crisis. But it is these people who should be assigned to the SWAT. The job of swift action team is very complex and sophisticated, which involves technological as well as cultural challenges. It is not the place for people without any initiative, dedication, and enthusiasm. It is not the place for the people who do not have any team skills and who have communication problems. It is not the place for people whom the boss does not want. In fact assigning some people, just because they are the only ones available is one of the most crucial mistakes that the management can make. They will be jeopardizing the entire project by taking such an action.
The SWAT needs people who can grasp new ideas quickly, who have an open mind to new technologies and concepts and who love challenges. These people should have a never say die attitude and should be capable of working as a team. These men will be pioneers as they will be taking their organizations through untested environments and uncharted waters and so their ability to think quickly, improvise effortlessly, innovate fast and act without hesitation is critical for the success of the project.

So when faced with the decision of assigning members to the SWAT, the management should be willing to send their best troops. Invariably, these people are those whose work cannot be interrupted and responsibilities cannot be delegated. But the company has to find a way. If the company decides—early enough—who they are going to send, and if those people are informed, may be they could train somebody to take their positions. But sending the best people is a must.

CASE STUDIES

Now I will discuss two cases where I was part of the SWAT—one a large project with 10 modules and more that 120 people and another 7 projects where 3 were one-man projects and the rest had 2 or 3 members in it.

The first project was for a large bank; it was a bank automation project. The project had 10 modules and about 120 members (about 10 – 12 members in each module). The SWAT consisted of 8 members. The project was using a CASE tool. The standards and procedures were in place and the team members were given an initial training (induction training) on the project as well as the procedures, the tools, and so on before they were allotted to the project. The project team occupied an entire floor of the company. There was a project meeting every Monday and the module leaders were supposed to present the status report on how each module were progressing.

The SWAT had an independent room in the same floor. The team members were all exceptional professionals—gurus, experts and so on. They were thorough with the functionality of the project, each member of the group had excellent knowledge of all the tools, procedures and practices of the project and in addition to that there was at least on person who was an authority of one aspect (one who knew that topic inside out) may it be the tools, functionality, procedures, and so on.

Whenever a module was behind schedule, the SWAT was assigned the task of bringing it on schedule. The SWAT members then worked with the team members, they did anything that the team members found difficult, coding, testing, documentation, and so on. Sometimes they mentored—sat with the team members and helped in troubleshooting the programs. Sometimes they helped the team members in understanding the specifications so that they could code the programs correctly and efficiently. When the backlog of a module was finished the SWAT left the module and joined another module or continued with their normal tasks. They also did a casual analysis as to why the defects and backlogs occurred and how it could be avoided. Thus the SWAT not only solved the temporary crisis, but also helped in finding lasting solutions that prevented the problems from recurring. But there are situations that nobody can anticipate or prevent—employees leaving, loss of working time due to power failure or system failure and so on. So the SWAT helped in these situations and the project was finished ahead of schedule, which would not have been possible without the SWAT setup.

The second case I am presenting, where I have used the SWAT approach, was in a small organization. The company was a start-up with a few projects—some of them were in-house projects and some of them were for clients. Each project was small and the maximum project size was 3. There were 3 one-man projects and the rest had either 2 or 3 employees. All the team members were comparatively inexperienced. All the projects were done using Visual C++. There were two people in the SWAT and both were experts in Visual C++. They were also familiar with all the projects as they were the people who were involved in the design and who had interacted with the clients. These people were also managing the teams, so they knew the schedules.

Once in every three days each project team met the SWAT (who were also project managers) and apprised them of the status. If the projects were on schedule, then the project team was asked to continue with the work. If a project was behind schedule, then the SWAT members sat with the team and solved the problem. Since the projects were small and the review was done regularly, the SWAT was able to help in clearing any backlog within a matter of 2 – 3 hours. Since this was an informal setup, the SWAT members also doubled as technology and functionality experts and helped the employees in clearing their doubts as and when they occurred. In this way, the two people who had excellent technical and functional know-how, excellent communication skills, and good leadership qualities were able to complete 7 projects in time. This is an example of an informal set up where SWAT project management was used.

A CAVEAT…

Finally a caveat, the SWAT software project management will succeed only if the members of the SWAT are chosen carefully and they are exceptionally good technically, functionally and have excellent team, communication and management skills and are diplomatic in nature. The members also should have good leadership capabilities so that they earn the respect of the project team members with whom they have to work in order to bring a project(s) back on track.

]]> http://www.alexisleon.com/art/2006/04/25/software-pm-with-swat.html/feed http://www.alexisleon.com/art/2006/04/11/brooks-law-revisited.html http://www.alexisleon.com/art/2006/04/11/brooks-law-revisited.html#comments Tue, 11 Apr 2006 06:30:26 +0000 Alexis Leon http://www.alexisleon.com/art/2006/04/11/brooks-law-revisited.html CONTENTS

Introduction
Today’s Software Development Scenario
Project Cost
Written Communication
References

INTRODUCTION

In 1975, Frederick P. Brooks [1] stated that ‘adding manpower to a late project makes it later.�