CMMI and ISO : Success Rate

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• What is CMMI?
• What is ISO?
• CMMI Performance
  - Productivity
  - Cost
  - Schedule
  - Quality
  - Customer Satisfaction
  - Return on Investment (ROI)
  
• ISO Performance
• Conclusion
• Reference

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What is CMMI?

5 Maturity Levels of CMMI [2]

Level	Description	Key Process Areas
1) Performed	Process unpredictable, poorly controlled and reactive
2) Managed	Process characterized for projects and is often reactive	Requirements Management Project Planning
3) Defined	Process characterized for the organization and is proactive	Product Integration Validation, Verification
4) Quantitatively Managed	Process measured and controlled	Organizational Process Performance Quantitative Project Management
5) Optimizing	Focus on process improvement	Organizational Innovation Causal Analysis and Resolution

Although many organizations have implemented CMMI and achieved maturity level which they desired, some of them have seen little benefits or less benefit than they expected. Here are the promised benefits that we are supposed to see after implementing CMMI. [7]

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What is ISO?

ISO is the world largest standards developing organization. Between 1947 and the present day, ISO has published more than 17,000 International Standards, ranging from standards for activities such as agriculture and construction, through mechanical engineering, to medical devices, to the newest information technology developments. ISO is a network of the national standards institutes of 157 countries, one member per country, with a Central Secretariat in Geneva, Switzerland, that coordinates the system.[3] ISO 9000 is a family of standards for quality management systems. Some of the requirements in ISO 9000 include [4]

Benefits by Implementing Standards [a]

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CMMI Performance

As we mentioned earlier about the promised benefits after implementing CMMI, there are a bunch of examples for benefits of CMMI we might see in organizations as following.

These performance results [5] are from 35 organizations and are divided into 6 performance categories which are cost, schedule, productivity, quality, customer satisfaction, and return on investment. We can see that organizations who implemented CMMI have improved the most in productivity and schedule at 61% and 50% on average respectively. Also, it generates return on investment at 4:1 on average.

For the highest performance category which is productivity, we can see from the chart that the higher maturity level we are, the higher productivity we will achieve. The organizations that are in CMMI maturity level 5 could gain approximately 2.5 higher productivities than they normally had.

If we consider the benefits through each category, we will get more detail and may understand more clearly about how each organization benefits from CMMI. This report, “Demonstrating the Impact and Benefits of CMMI®: An Update and Preliminary Results” [d], presents a summary organized by high-level classes of performance measures including cost, schedule, quality, customer satisfaction, and ROI.

Cost : shows how much the organizations can reduce cost in production.

Schedule : measures improvement in schedule predictability and reduction in time.

Quality : is measured by number of defects and errors.

Customer Satisfaction : is measured by customer award fees and evaluation survey.

Return on Investment (ROI) : is calculated from cost and benefits

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ISO Performance

There is an example of what improvement the organization could earn by implementing ISO standard. From this article [b], “At the segment level, the turn rate for some segments is particularly low. In April, the entry compact car segment had an average days to turn of only 38 days, due in part to the successful launches of the Toyota Yaris and Honda Fit. Premium compact cars sat on dealer lots an average of 44 days, benefiting from the success of the newly launched Dodge Caliber, the redesigned 2006 Honda Civic, the 2006 Chevrolet HHR and the Toyota Prius, among others. At the other end of the price spectrum, the premium luxury car segment had an average turn rate of just 35 days in April, with the BMW 7-Series and redesigned Mercedes-Benz S-Class having exceptionally low turn rates.”, J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in key business sectors.

The firm’s quality and satisfaction measurements are based on responses from millions of consumers annually. We can see from the article that the firm can save many of “average days to turn” for new vehicles sits on a dealership lot (from 44 to 38 days) which represents the improvement of both productivity and customer satisfaction.

Another research [6] shows that ISO 9000 provides an improvement in what industry/segment and by how much. Again, we can see that almost all of the industries with ISO 9000 have better performance in productivity and cost reduction.

We also found a lot of benefits of ISO 9000 from this article.[c] It was a survey conducted by Dun & Bradstreet Information Services and Irwin Professional Publishing found that ISO 9000-registered companies had experienced several internal and external benefits as a result of certification.

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Conclusion

Organizations have experienced process failure over and over in various kinds of the products as well as the projects they were responsible for. They might suffer from a lot of reasons including late delivery, last minute problem, cost overrun, time overrun, unacceptable quality, or customer complaints.  All these reasons made organizations decide to apply CMMI and ISO standard to their processes. For all of the surveys and reports we mentioned earlier in this paper, they prove that the organizations can achieve the benefit in at least one of the categories from cost, productivity, schedule, customer satisfaction, quality, and ROI.

Obviously, major benefits the organizations can achieve by implementing CMMI and ISO are from cost, productivity, and customer satisfaction. In terms of schedule and delivery, it is more obvious to see this benefit in the organization that implements CMMI rather than ISO because CMMI is written specifically for software development companies while ISO is the international standard which applies to all types of organizations, and supports both product and service oriented organizations.[8] By investing in both CMMI and ISO, the organizations can obviously expect something in return. However, the organizations have to consider whether it is CMMI or ISO that would give them the most benefits, and which one would fit the organizations the best.

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References

[1]  http://www.sei.cmu.edu/cmmi/general/

[2]  http://en.wikipedia.org/wiki/Capability_Maturity_Model#Structure_of_the_CMM

[3]  http://www.iso.org/iso/about/the_iso_story.htm

[4]  http://en.wikipedia.org/wiki/ISO_9000

[5]  http://www.sei.cmu.edu/pub/documents/06.reports/pdf/06tr004.pdf

[6]  http://www.isocenter.com/9000/benefits.html

[7]  http://www.dtic.mil/ndia/2005cmmi/wednesday/hefner2.pdf

[8]  http://www.umsl.edu/~sauterv/analysis/craft/Presentation%20Spring%202008.ppt

[9]  http://www.iso.org

[10]  http://www.the9000store.com/benefits-of-iso-9001.aspx

[11]  http://www.9001support.com/acatalog/iso_9001_benefits.html

[a]  Davenport, T., “The Coming Commoditization of Processes”, Harvard Business Review, June 2005,
Vol.83.

[b]  “Power Information Network Reports: Despite Higher Transaction Prices, New Vehicles Spend Less
Time on Dealership Lots”, PR Newswire. New York, May 17, 2006. 

[c]  “Study: ISO Benefits Boom -- Registered Companies Gain Competitive Edge”, Electronic Buyers'
News. Manhasset: Jul 1, 1996.  pg. 40

[d]  Dennis R. Goldenson & Diane L. Gibson, “Demonstrating the Impact and Benefits of CMMI®:
An Update and Preliminary Results”, Special Report CMU/SEI-2003-SR-009, October 2003

[e]  “Citizant Earns CMMI Maturity Level 3 Rating; Prestigious Certification Helps Sharpen Company's
       competitive Edge in Federal IT Marketplace”, PR Newswire. New York: Oct 29, 2008. 

[f]  “DTCC Appraised as a CMMI Level 3 Organization”, Business Wire. New York: Oct 2, 2008. 

[g]  “Catapult Technology Jumps 3,739 Spaces to Land in the Top 20 Percent of Inc. 5000 Ranking; At
       Number 726, Company Ranks 48 in Government Services, 55 in DC Region”, PR Newswire. New  
York: Aug 29, 2008. 

[h]  “Cocolife counts successes at 30 years”, BusinessWorld. Manila: Nov 3, 2008. 

[i]  “Catapult Technology Lands on Deloitte Maryland Technology Fast 50; Growth Fuels Recognition,
      Awards”, PR Newswire. New York: Sep 25, 2008. 

[j]  “Combined Audits Save Time, Money”, Quality. Troy: Mar 2006. Vol. 45, Iss. 3;  pg. 54, 2 pgs

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