1. Risk and Relevance Dr. Murray Cantor Distinguished Engineer, IBM Rational software [email_address]
2. Value is being created by software/IT Transportation Equipment Hospitals Chemical Manufacturing Software/Information Food Manufacturing Telecommunications Computers/Electronics $0.00 $100.00 $200.00 $300.00 $400.00 $500.00 $600.00 $700.00 $800.00 US Industry Revenue in $B US Census Bureau
3. Software provides huge value for all the other industries US Industry Revenue in $B US Census Bureau Transportation Equipment Hospitals Chemical Manufacturing Software/Information Food Manufacturing Telecommunications Computers/Electronics $0.00 $100.00 $200.00 $300.00 $400.00 $500.00 $600.00 $700.00 $800.00
4. Software provides huge value for all the other industries US Industry Revenue in $B US Census Bureau Transportation Equipment Hospitals Chemical Manufacturing Software/Information Food Manufacturing Telecommunications Computers/Electronics $0.00 $100.00 $200.00 $300.00 $400.00 $500.00 $600.00 $700.00 $800.00 This does not include value created by back office/operations support
5.
6.
7. History has shown we do not get the estimates ‘right’ From George Stark, Paul Oman, “A comparison of parametric Software Estimation Models using real project data”, in press
8. History has shown we do not get the estimates ‘right’ From George Stark, Paul Oman, “A comparison of parametric Software Estimation Models using real project data”, in press, 2007 Variance dominates Maybe there is a reason
9. Eternal wisdom “ There are risks and costs to a program of action. But they are far less than the long-range risks and costs of comfortable inaction.” - John F. Kennedy “ Make everything as simple as possible, but not simpler.” - Albert Einstein “ We should be guided by theory, not by numbers.” - W. Edward Deming “ To measure is to know. If you can not measure it, you can not improve it.” - Lord Kelvin
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27. Benefits: Delivered value is also a distribution Shortfall in stakeholder needs Value is improved by increasing upside variance 0 Planned $Value Reuse opportunities
28.
29.
30.
31.
32. Steer your project to success Actual Path Uncertainty in Stakeholder Satisfaction Space Initial Planned Content Initial Planned Path Uncertainty in delivery Each iteration should reduce variance and increase NPV
38. Some final thoughts Staying relevant requires smart risk taking Value can only be reliably delivered if it measured and managed Value delayed is value denied In the end, these techniques do allow us to “ Take risks and add value”