CMMI V2.0 in Action: How Companies Improved Performance
By Ron Lear, Director of IP Development & Chief Architect
To remain competitive in a rapidly changing business landscape, companies must continuously focus on improving performance
. Some performance-improvement challenges are universal: increasing speed to market, agility, customer satisfaction and quality. But each business is unique, with its own specific performance objectives—and obstacles. One company’s biggest challenge may be scaling software development capabilities to unleash revenue growth; other companies face problems tracking down defects in complex products or solving painful cash-flow issues.
With CMMI (Capability Maturity Model Integration) V2.0
, businesses are building capabilities that hone in on their own specific objectives and challenges—and are achieving measurable improvements in business performance. Released in 2018, CMMI V2.0 CMMI is aan integrated framework of continuous business performance best practices that help organization design, deliver and manage secure products, services, and suppliers. It brings a laser-like focus on business performance, enabling companies to target their capability improvements to the capabilities most critical to their business. An organization adopting V2.0 defines its own business success objectives and related performance measures to identify the business value that it wants to get, such as fewer defects, faster time-to-market, and more rapid software delivery—and then uses the CMMI to assess and continually improve its progress and performance against those objectives. Performance reports help companies identify specific objectives and measure the business value of capability improvements that they achieve with CMMI.
Increasing Software Productivity, Quality and Revenue
Even though most organizations have only been using V2.0 for a little over six months, several are already seeing clear business performance improvements including higher productivity, better product quality, improved cash flow, and rapid business growth. At CMMI’s Capability Counts 2019 conference, I had the privilege of presenting some of those early results, based on the experiences of a diverse range of companies including software development firms, heavy machinery manufacturers, financial-services companies and medical-device makers.
Benefits for Engineering and Medical-Device Companies
- Blue People, a fast-growing IT company in Mexico, faced a problem that’s not uncommon among software developers: the scrum-based agile methodology that had enabled its success was unable to scale to meet fast-growing customer demand. Blue People wanted an approach that would help the business expand without the growing pains typically experienced by fast-moving companies. Using CMMI, Blue People built processes and platforms to standardize and scale its software development methods, and to measure the resulting performance improvements. As a result, the company increased revenue by 440 percent—yielding a six-to-one return on its investment. It also dramatically improved its on-time delivery, reducing schedule deviations from 80 percent to an extraordinarily low level of 1 percent.
- Other software development organizations have achieved similarly impressive performance improvements. One company was trying to track down issues that slowed its ability to deliver new features and bug fixes to a key customer. Using CMMI, it found that it was applying an unnecessarily elaborate peer-review process to bug fixes, which in practice needed much less review than new features because the requirements were more clearly defined. Streamlining that review process enabled the company to deliver solutions faster and reduce the overall release cost by 40 percent. Because it passed on those benefits to the customer, it won more work—so the improvements translated directly into revenue growth.
- Another company used CMMI to maximize its software development efficiency by setting and tracking its ability to maintain a target output ratio of 80 percent new features to 20 percent bug fixes.
But the benefits of CMMI V2.0 extend beyond software development:
- At one large manufacturer of heavy machinery, the CMMI performance report revealed the source of a serious cash-flow problem that was causing the company to miss its revenue targets: a mismatch between its invoicing schedule and its engineering delivery schedule meant that it wasn’t getting paid when predicted. After seeing the CMMI V2.0-required Performance Report, the company was immediately able to implement a straightforward resolution to the issue, stemming the cash-flow problems.
- CMMI V2.0 also received extremely high marks in a survey of more than 200 medical-device manufacturers participating in an innovative U.S. Food & Drug Administration pilot program. Administered by CMMI, the Medical Device Discovery Appraisal Program (MDDAP) pilot aims to shift the industry’s focus from regulatory compliance to quality and performance improvement. It uses CMMI V2.0 to assess manufacturing quality, creating a safe environment for companies to discuss quality issues and helping them identify ways to improve. Early results indicate the experiment is a success: Device makers are already achieving significant improvements in productivity, streamlined processes, and lower regulatory costs. With CMMI, 86% found improvements to increase product quality; 94% found the CMMI appraisal valuable and 100% said they would recommend the program to others.
Besides the focus on performance, CMMI V2.0 also includes many other improvements. For example, it’s designed to be more flexible, easier to use, and to reduce appraisal effort.
A Promising Outlook
- China Merchants Bank, one of the world’s top commercial banks, reduced appraisal effort by 50 percent using CMMI for a major initiative: a software development framework that has allowed it to push out 4,000 new software releases per year without major production issues.
These promising results demonstrate how CMMI V2.0 can help businesses in many different industries achieve specific business objectives. I’m looking forward to seeing more results as a growing number of companies use CMMI V2.0 to improve performance—accelerating time to market, improving quality, and driving revenue and profit.