Strategy Management – Definition, Keywords and Benefits

Strategy Management“If a man takes no thought about what is distant, he will find sorrow near at hand. He who will not worry about what is far off will soon find something worse than worry.” -Confucius

The joke mentioned below captures the notion and essence of Strategy Management, which is to achieve and maintain the Competitive advantage.

“Once there were two company presidents who competed in the same industry. These two Presidents decided to go on a camping trip to discuss a possible merger. They hiked deep into the woods. Suddenly, they came upon a grizzly bear that rose up on its hind legs and snarled. Instantly, the first president took off his knapsack and got out a pair of jogging shoes. The second president said, “Hey, you can’t outrun that bear.” The first president responded, “Maybe I can’t outrun that bear, but I surely can outrun you!” “

Origins

The strategic management discipline originated in the 1950s and 1960s. Among the numerous early contributors, the most influential were Peter Drucker, Philip Selznick, Alfred Chandler, Igor Ansoff, and Bruce Henderson. The discipline draws from earlier thinking and texts on ‘strategy’ dating back thousands of years. A strong military heritage underlies the study of strategic management. Terms such as objectives, mission, strengths, and weaknesses first were formulated to address problems on the battlefield. The word strategy comes from the Greek strategos, which refers to a military general and combines stratos (the army) and ago (to lead). The history of strategic planning began in the military. A key aim of both business and military strategy is “to gain competitive advantage.” In many respects, business strategy is like military strategy, and military strategists have learned much over the centuries that can benefit business strategists today. Both business and military organizations try to use their own strengths to exploit competitors’ weaknesses. If an organization’s overall strategy is wrong (ineffective), then all the efficiency in the world may not be enough to allow success. Business or military success is generally not the happy result of accidental strategies. Rather, success is the product of both continuous attention to changing external and internal conditions and the formulation and implementation of insightful adaptations to those conditions. The element of surprise provides great competitive advantages in both military and business strategy; information systems that provide data on opponents’ or competitors’ strategies and resources are also vitally important. Of course, a fundamental difference between military and business strategy is that business strategy is formulated, implemented, and evaluated with an assumption of competition, whereas military strategy is based on an assumption of conflict.

Defining Strategic Management

Strategic management can be defined as the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives. As this definition implies, strategic management focuses on integrating management, marketing, finance/accounting, production/operations, research and development, and information systems to achieve organizational success.

Stages of Strategic Management

 The strategic-management process consists of three stages: strategy formulation, strategy implementation, and strategy evaluation. Strategy formulation includes developing a vision and mission, identifying an organization’s external opportunities and threats, determining internal strengths and weaknesses, establishing long-term objectives, generating alternative strategies, and choosing particular strategies to pursue. Strategy-formulation issues include deciding what new businesses to enter, what businesses to abandon, how to allocate resources, whether to expand operations or diversify, whether to enter international markets, whether to merge or form a joint venture, and how to avoid a hostile takeover.

Strategy implementation requires a firm to establish annual objectives, devise policies, motivate employees, and allocate resources so that formulated strategies can be executed. Strategy implementation includes developing a strategy-supportive culture, creating an effective organizational structure, redirecting marketing efforts, preparing budgets, developing and utilizing information systems, and linking employee compensation to organizational performance.

Strategy evaluation is the final stage in strategic management. Managers desperately need to know when particular strategies are not working well; strategy evaluation is the primary means for obtaining this information. All strategies are subject to future modification because external and internal factors are constantly changing. Three fundamental strategy-evaluation activities are (1) reviewing external and internal factors that are the bases for current strategies, (2) measuring performance, and (3) taking corrective actions. Strategy evaluation is needed because success today is no guarantee of success tomorrow!

Strategy Management: The Art and Science (Intuition vs Analysis)

The strategic management process can be described as an objective, logical, systematic approach for making major decisions in an organization. It attempts to organize qualitative and quantitative information in a way that allows effective decisions to be made under conditions of uncertainty. Yet strategic management is not a pure science that lends itself to a nice, neat, one-two-three approach. Based on past experiences, judgment, and feelings, most people recognize that intuition is essential to making good strategic decisions. Intuition is particularly useful for making decisions in situations of great uncertainty or little precedent. It is also helpful when highly interrelated variables exist or when it is necessary to choose from several plausible alternatives. Some managers and owners of businesses profess to have extraordinary abilities for using intuition alone in devising brilliant strategies. For example, Will Durant, who organized GM, was described by Alfred Sloan as “a man who would proceed on a course of action guided solely, as far as I could tell, by some intuitive flash of brilliance. He never felt obliged to make an engineering hunt for the facts. Yet at times, he was astoundingly correct in his judgment.” Although some organizations today may survive and prosper because they have intuitive geniuses managing them, most are not so fortunate. Most organizations can benefit from strategic management, which is based upon integrating intuition and analysis in decision making. Choosing an intuitive or analytic approach to decision making is not an either–or proposition. Managers at all levels in an organization inject their intuition and judgment into strategic-management analyses. Analytical thinking and intuitive thinking complement each other. The strategic-management process is an attempt both to duplicate what goes on in the mind of a brilliant, intuitive person who knows the business and to couple it with analysis.

Key terms in Strategic Management

 Before I delve deeper into Strategic Management, mentioned below are some of the key terms that are very integral to understanding of the Strategic Management.

Competitive Advantage

Strategic management is all about gaining and maintaining competitive advantage. This term can be defined as “anything that a firm does especially well compared to rival firms.” When a firm can do something that rival firms cannot do, or owns something that rival firm’s desire, that can represent a competitive advantage. Having less fixed assets than rival firms also can provide major competitive advantages in a global recession. For example, Apple has no manufacturing facilities of its own, and rival Sony has 57 electronics factories. Apple relies exclusively on contract manufacturers for production of all of its products, whereas Sony owns its own plants. Less fixed assets has enabled Apple to remain financially lean with virtually no long-term debt. Sony, in contrast, has built up massive debt on its balance sheet. Normally, a firm can sustain a competitive advantage for only a certain period due to rival firms imitating and undermining that advantage. Thus it is not adequate to simply obtain competitive advantage. A firm must strive to achieve sustained competitive advantage by (1) continually adapting to changes in external trends and events and internal capabilities, competencies, and resources; and by (2) effectively formulating, implementing, and evaluating strategies that capitalize upon those factors.

Vision and Mission Statements

The Vision statement of an organization is nothing but answer to the following question “What do we want to become?” Developing a vision statement is often considered the first step in strategic planning, preceding even development of a mission statement. Many vision statements are a single sentence. For example, the vision statement of Stokes Eye Clinic in Florence, South Carolina, is “Our vision is to take care of your vision.” Mission Statements addresses the basic question that faces all strategists: “What is our business?” Mission statements are “enduring statements of purpose that distinguish one business from other similar firms. A mission statement identifies the scope of a firm’s operations in product and market terms.” A clear mission statement describes the values and priorities of an organization. Developing a mission statement compels strategists to think about the nature and scope of present operations and to assess the potential attractiveness of future markets and activities. A mission statement broadly charts the future direction of an organization. A mission statement is a constant reminder to its employees of why the organization exists and what the founders envisioned when they put their fame and fortune at risk to breathe life into their dreams.

External Opportunities and Threats

External opportunities and external threats refer to economic, social, cultural, demographic, environmental, political, legal, governmental, technological, and competitive trends and events that could significantly benefit or harm an organization in the future. Opportunities and threats are largely beyond the control of a single organization—thus the word external.

Some examples of External opportunities and threats are as follows:

  • Consumers expect green operations and products.
  • Marketing has moving rapidly to the Internet.
  • The double whammy of falling demand and intense price competition is plaguing most firms, especially those with high fixed costs.
  • The business world has moved from a credit-based economy to a cash-based economy.
  • There is reduced capital spending in response to reduced consumer spending.

Other opportunities and threats may include the passage of a law, the introduction of a new product by a competitor, a national catastrophe, or the declining value of the dollar. A competitor’s strength could be a threat. Unrest in the Middle East, rising energy costs, or the war against terrorism could represent an opportunity or a threat. A basic tenet of strategic management is that firms need to formulate strategies to take advantage of external opportunities and to avoid or reduce the impact of external threats. For this reason, identifying, monitoring, and evaluating external opportunities and threats are essential for success.

Internal Strengths and Weaknesses

 Internal strengths and internal weaknesses are an organization’s controllable activities that are performed especially well or poorly. They arise in the management, marketing, finance/accounting, production/operations, research and development, and management information systems activities of a business. Identifying and evaluating organizational strengths and weaknesses in the functional areas of a business is an essential strategic management activity. Organizations strive to pursue strategies that capitalize on internal strengths and eliminate internal weaknesses.Strengths and weaknesses are determined relative to competitors. Relative deficiency or superiority is important information. Also, strengths and weaknesses can be determined by elements of being rather than performance. For example, strength may involve ownership of natural resources or a historic reputation for quality.  Internal factors can be determined in a number of ways, including computing ratios, measuring performance, and comparing to past periods and industry averages. Various types of surveys also can be developed and administered to examine internal factors such as employee morale, production efficiency, advertising effectiveness, and customer loyalty.

Long-Term Objectives

Objectives can be defined as specific results that an organization seeks to achieve in pursuing its basic mission. Long-term means more than one year. Objectives are essential for organizational success because they state direction; aid in evaluation; create synergy; reveal priorities; focus coordination; and provide a basis for effective planning, organizing, motivating, and controlling activities. Objectives should be challenging, measurable, consistent, reasonable, and clear. In a multidimensional firm, objectives should be established for the overall company and for each division.

Strategies

 Strategies are the means by which long-term objectives will be achieved. Business strategies may include geographic expansion, diversification, acquisition, product development, market penetration, retrenchment, divestiture, liquidation, and joint ventures. Strategies are potential actions that require top management decisions and large amounts of the firm’s resources. In addition, strategies affect an organization’s long-term prosperity, typically for at least five years, and thus are future-oriented. Strategies have multifunctional or multidivisional consequences and require consideration of both the external and internal factors facing the firm.

Annual Objectives

Annual objectives are short-term milestones that organizations must achieve to reach long term objectives. Like long-term objectives, annual objectives should be measurable, quantitative, challenging, realistic, consistent, and prioritized. They should be established at the corporate, divisional, and functional levels in a large organization. Annual objectives should be stated in terms of management, marketing, finance/accounting, production/operations, research and development, and management information systems (MIS) accomplishments. A set of annual objectives is needed for each long-term objective. Annual objectives are especially important in strategy implementation, whereas long-term objectives are particularly important in strategy formulation. Annual objectives represent the basis for allocating resources.

Policies

Policies are the means by which annual objectives will be achieved. Policies include guidelines, rules, and procedures established to support efforts to achieve stated objectives. Policies are guides to decision making and address repetitive or recurring situations. Policies are most often stated in terms of management, marketing, finance/accounting, production/operations, research and development, and computer information systems activities. Policies can be established at the corporate level and apply to an entire organization at the divisional level and apply to a single division or at the functional level and apply to particular operational activities or departments. Policies, like annual objectives, are especially important in strategy implementation because they outline an organization’s expectations of its employees and managers. Policies allow consistency and coordination within and between organizational departments.

Advantages of doing Strategy Management

  • It allows for identification, prioritization, and exploitation of opportunities.
  • It provides an objective view of management problems.
  • It represents a framework for improved coordination and control of activities.
  • It minimizes the effects of adverse conditions and changes.
  • It allows major decisions to better support established objectives.
  • It allows more effective allocation of time and resources to identified opportunities.
  • It allows fewer resources and less time to be devoted to correcting erroneous or ad hoc decisions.
  • It creates a framework for internal communication among personnel.
  • It helps integrate the behavior of individuals into a total effort.
  • It provides a basis for clarifying individual responsibilities.
  • It encourages forward thinking.
  • It provides a cooperative, integrated, and enthusiastic approach to tackling problems and opportunities.
  • It encourages a favorable attitude toward change.
  • It gives a degree of discipline and formality to the management of a business.

The above extract is basically my understanding of the book written by Fred R. David. The book can be downloaded from http://202.28.25.105/e-learning/courses/703309/document/StrategicManagementDavid.pdf?cidReq=703309

 

8 words that Define Leaders and Leadership

Leadership Traits
Leadership Traits

Since last couple of weeks, the question that has been keeping me busy has been if all men are born equal why some of them turn out to be great leaders while others turn out to be followers and worse of all some of them turn out to be bad leaders. I have been reading, researching and going through materials to find an answer to that. Who are the leaders? What differentiates them from the rest of the people? What accounts for good leadership? Leadership has long intrigued humankind and has been the subject of extensive research for centuries. There are numerous approaches that tries to explain the Leadership: The Trait approach, Situational approach, Relation approach, Emerging and New Leadership Approach. The more I read, the more I researched, I found a pattern in all the leaders. More or less all of them could be defined by the eight words – Honesty, Positive, Goals, Decisiveness, Learning, Communication, Persistence, and Charisma.

Honesty: Time and again various research studies have shown that the topmost thing that employees want from their leaders is integrity and Honesty. Always, always do the right thing. It makes employees feel like they know where they stand with you at all times. Be honest, fair, candid and forthright, and treat everyone in the same way that you yourself would want to be treated. Defined as the correspondence between work and deed, and as being truthful and non-deceitful (Locke, 1991). In Hoffman and other’s (2011) meta-analysis, honesty/integrity was found to be positively related to leadership effectiveness. One’s business and its employees are a reflection of yourself, and if you make honest and ethical behavior a key value, your team will follow suit. Openness and candor are characteristics that most people appreciate. There are a few people who will take advantage of such traits, but the vast majority will appreciate them. Bad Leaders are one’s that try to fake honesty, some of them even gain success in the short run but most of them always get caught in the long run. Faking honesty is never a good decision and a leader is as good as his last action. Once caught at being dishonest, he will never be able to regain the trust. The age-old Golden Rule: “Do unto others as you would have them do unto you” is a good standard to follow both today and tomorrow.

Positive: By the very definition of leadership, a Leader is one who exudes confidence, a one who gives hope in desperate of times and a one who is able to show a ray of light during the darkest of hours. No matter what the circumstances, no matter what the situation, a leader should always project an image of Positive thinking. The future should always be seen as bright and optimistic. Tomorrow will be better than today. W. I. Thomas wrote many years ago about self-fulfilling prophecies. If a person or group believes a thing to be true and operates, as though it were true, often it becomes true. This has been proven often in education and other fields. If a leader takes a positive stance, it will be more popular and the desired action is more likely to occur. A motto that always holds true is that: “Pessimism breeds negativity. Optimism breeds opportunity.” Everybody wants to work with people who lift them up into the clouds instead of dragging them down into the mud.  A leader makes sure seek out the positives in their people, helping them overcome their own feelings of self-doubt and spreading optimism throughout their organization.

Goals: All the good leaders are pretty clear in their head on what they want to achieve and where they want to reach. Of course all of them are visionaries but the ones that have clear plan of action and set of goals defined are the ones that stand out. Many a times, it has been seen that leaders who can’t match with action what they preach are the ones who turn out to be ineffective.  A leader must be knowledgeable about his or her goals and means for reaching the goals. An effective leader must be both organized and prepared. Many leaders have opened their mouths and inserted their foot and suddenly found that they were no longer regarded as leaders. A more modern folk saying is that “you should not have your mouth in gear while your mind is in neutral.” Great leaders are outstanding atStrategic planners and goal setters. They have the ability to look ahead, to anticipate with some accuracy where the industry and the markets are going. Leaders have the ability to anticipate trends, well in advance of their competitors and set goals accordingly.

Decisiveness: Goals without action/execution or without decisiveness is like having a great looking car without an engine. All the goals, plans and visions amount to nothing if they are not executed or put into action.  Decisiveness is easy to understand but sometimes difficult to achieve.  Some of us are inherently decisive, and some of us are not.  But regardless of your personality, decisiveness is an important part of leadership.  Especially in environments of fear and intense change, it feels unsafe to commit to a decision and move ahead. Avoid the crutch of ‘analysis paralysis’ and make the decision.  Forward movement is always better than being stuck in place. One good thing about decisiveness is that it can be learned and honed over time. Leaders who don’t take action on their goals and who aren’t decisive and who can’t make a decision will spin their organization into a frozen state where employees are unmotivated, wasting time, and discouraged. Passion, Drive, Vision, and Salesmanship, these are all important leadership traits, but without the proven ability to execute, they are just gravy. Successful leaders must cultivate the ability to execute. To do so, focus your time and energy on doing the right things at the right times — and get the job done.

Learning – A Leader is always learning and I am not only talking about academic learnings. A leader learns from his employees, from his competitors and from his mistakes.  Wisdom is priceless. When you get on a learning path, it is the best time of your life. Every day means something; every lesson provides the clarity you clamor for. You move forward, evolve, grow, and become more fulfilled as the big picture, the dream even, emerges from the shadows and into the light. A leader should first and foremost remain a learner. When a leader is constantly working on himself, he sets an example for the people who follow him.

 Communication: This word can’t be overstated. There is a reason why Communication ranks so high as the most important trait when it comes to leadership skills. This word differentiates a good leader from a bad leader. This word may very well be the difference between the Goals and it execution. A leader can have a good vision, a great plan and an awesome team but all these things boils to nothing unless the leader is able to communicate his vision and inspire his team to act on his vision and goals. Communication should not be confused with just being a good speaker; it is much more than that. A good leader is one who can fit his message according to the audience. Large words and complex sentences will not work with people of limited formal education. Writing or speaking in technical terms may help in a few instances, but writing or speaking in clear simple terms helps in almost all cases. The ability to listen, read body language, ask questions, provide feedback, and generate effective two-way communication builds trust and can prevent performance problems down the road. In addition, the ability to comfortably use a variety of communication styles in order to articulate goals and objectives paves the way for healthy working relationships at every level.

Persistence: Great leaders are persistent. Period. Persistence is one of the key characteristics of great leaders. Gaining it requires determination and a mindset that — no matter what happens — you will stick to your principles and goals. There are ample examples of talented men not fulfilling their potential; there are numerous examples where geniuses are left unrewarded. The reason being they all lacked Persistence. Former U.S. President Calvin Coolidge once said: “Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination are omnipotent. The slogan ‘press on’ has solved and always will solve the problems of the human race.”

Charisma: Charisma is the most debated word when it comes to leadership. There is a great deal of controversy about whether charisma is made or born with, and if charismatic leaders are actually effective. If we look into history and look at all the great leaders we will find that apart from having all the traits that are mentioned above they all had certain effusive quality that made them stand out, that made their followers follow, that made them connect to their followers at a deeper, emotional level. Charismatic leaders have style, personality and confidence. True charisma is a measure of a person’s maturity and character. Charismatic leaders recognize that leadership is not about showmanship, but the application of wisdom built over years of experience. Charisma is not a single trait; it is a mixture of lots of words: Communication, Confidence, and Ability to Focus, Ability to Analyze, Maturity, and Humility etc.

Do you think that I have covered all the traits that make a good leader? I would love to get your views on this and would like to improve on this blog based on your suggestions. Feel free to comment.

4 Dimensions of Project Management

4DimensionThere are 4D’s of any software project management. Any successful or efficient Project Managers uses these 4D’s as a trade-offs or leveraging techniques when dealing with the management. The 4D’s of project management namely – Duration, Cost, Scope and Risk are used by Project Managers to handle any change requests while maintaining the feasibility of the projects.

Scenario 1 – Project Managers with only 1 dimension: Duration

The PM presents the plan and schedule to the management and is inevitably asked the question which is always asked:” How can we make this faster?”

PM response: The PM slumps in his chair and starts stuttering, “We can’t change anything, this is the only way of doing it and changing anything at this stage will lead to disaster.”

Management response: They go ahead anyway and slash the duration to what they want and ask the PM to do it anyway. Please note, management relishes the opportunity to take strategic decisions based on data and they don’t respond too well to vague terms like disaster or no change.

Here the project manager was caught in a typical 1-Dimension situation wherein the only option or alternative that he was able to give to the management was Duration. He was either unprepared or unwilling to give any alternatives or trade-offs options to the management and that led to a disastrous scenario. So now the PM is stuck with a shorter duration with no increase in the budget and no reduction in scope of the project.

A different outcome could have been accomplished if the PM would have come up with multiple Duration and Costs options. If faced with the inevitable question of “How can we do it faster?” the better response to the management is sure we can do it faster and we can do it cheaper too. I have these options which you can take a look at and then make an informed decision. I have this option 1 which will complete the project in 6 months at a cost of half a million dollars. I have another option in which we can complete the project in 4 months only but in that scenario I will have to hire a Graphics designer and an extra developer which will add a cost of 60 thousand dollar to the project.

What is the immediate effect of the presentation of these multiple options to the management? The management starts giving respect to the PM and he is being perceived as somebody who is intelligent and knows what he is doing. In short, they become aware of the fact that they are dealing with somebody who cannot be bulldozed with statements like “This is when i want the things to complete and please make sure that it is done.” Secondly Management is happy that they are being asked to make a strategic decision based on some data instead of vague threats like disaster.

There is a high possibility that even after being presented with the multiple options and various dimensions the management still goes ahead and start playing 1-Dimension card. This is when the PM has to be intelligent and ready enough to take out the 3rd dimension that is the Scope card.

“Sure if you still want the duration of the project to be shorter at no additional cost then i will have to reduce the scope of the project to achieve them and here are the options for them.”

There is very high probability that even after playing all the 3 dimensions of the project management, the PM might not get everything that he desired but we will surely be able to negotiate something and at least come out of the meeting with a feasible project. Last but not the least the PM would have gained the respect and credibility of the management which would go a long way in maintaining the sanity of the project as the project goes along. The trade-offs (Duration, Cost, Scope and Risk) are very effective tools that needs to be presented to the decision-makers so that they can take realistic decisions. To be able to present these trade-offs , the PM should be able to quantify each of these trade-offs and present as many as options to the executives.

One – Dimension Projects : Most of the internal applications that are developed in an organization are one dimensional. The only tangible option that the executives have are the duration. There is no explicit project budget and there is no assessment of risks that are done. Not surprisingly, most of the discussions and decisions are around the duration of the project as that is the only measurable entity that is before the management. Scope creep, bloated budget and slipped deadlines are common in one-dimension projects.

Two – Dimension projects :  Some organizations do add a second dimension to their plans – Duration and Cost. The benefits of adding this dimension is tremendous as now the management understands that adding a new feature or changing a feature is not “free” anymore. There is a cost involved. Even if the Cost of the project might not be paid by the end client, the management now becomes aware of the Scope creep and the cost involved with it. This knowledge is a major step forward and helps tremendously in controlling the scope creep.

Three – Dimension projects : Things get much better if the PM adds the third dimension and is able to quantify the scope of the project. By decomposing and quantifying the scope of the project, the management now has a measurable view of each of the feature sets and their impact on the business results. This trade-off becomes more powerful when it is complemented with the two dimensions mentioned above – Duration and Cost. Consider these two options and one will realize the effect of presenting this dimension with the other two dimensions.

Option 1: “Develop this particular feature capable of serving 90000 users at a cost of 100000 dollars in 6 months.”

Option 2: “Develop this particular feature capable of service 50000 users at a cost of 60000 dollars in 4 months.”

Now the management directly sees the desired business result that they are going to get and at what cost and duration.

Four – Dimension Projects: The fourth dimensions adds the assessment of risks to the projects. When this dimension is added to the project management, this gives the ability to the management to see at what level of certainty they want to achieve in the project and at what cost and duration. When the management listens to “We can deliver the agreed scope of the application with 60 % confidence at a cost of 1 million in 6 months”, they are more confident of taking the decision and are vary of creeping of the scope as they are now aware that any change request will affect all the duration, cost and Risk.

 

Ignoring Risk Management : A disaster !

Risk Management
Risk Management

Some staggering facts on software failures

According to the Standish report:  In the United States, we spend more than $250 billion each year on IT application development of approximately 175,000 projects. The average cost of a development project for a large company is $2,322,000; for a medium company, it is $1,331,000; and for a small company, it is $434,000. The Standish Group research shows a staggering 31.1% of these projects will be cancelled before they ever get completed. Further results indicate 52.7% of projects will cost 189% of their original estimates.

According to a study report done by McKinsey & Company in conjunction with the University of Oxford: 17 percent of large IT projects go so badly that they can threaten the very existence of the company. On average, large IT projects run 45 percent over budget and 7 percent over time, while delivering 56 percent less value than predicted

According to a study by KPMG (New Zealand): Survey shows an incredible 70% of organizations have suffered at least one project failure in the prior 12 months. 50% of respondents also indicated that their project failed to consistently achieve what they set out to achieve!

 Ignoring Risk Management: A Recipe for disaster

Software Project failures are the result of the multiplicity of risks inherent in software project environment. Software development projects are collections of larger programs with many interactions and dependencies. It involves a creation of something that has never been done before although the development processes are similar among other projects. As a result, software development projects have a dismal track-record of cost and schedule overruns and quality and usability problems. Time-to-market is the most critical factor for consumer in developing commercial software products. However the project success is difficult to predict because project scope is changed by continuous market requirements and resources are constantly being reallocated to accommodate latest market conditions. Projects for specific customers also have a large degree of uncertainty for requirements due to the customized technical attributes. Many software projects and programs involve multiple entities such as companies, divisions, etc., that may have certain interests. There is often a feeling of disconnection between software developers and their management, each believing that the others are out of touch with reality resulting in misunderstanding and lack of trust. Research shows that 45% of all the causes of delayed software deliverables are related to organizational issues. By looking at the facts and reasons mentioned above, it would be quite obvious that the Risk Management process would be quite an integral part of the Software Development process. Wrong!

According to Kwak and Ibbs (2000) identified risk management as the least practiced discipline among different project management knowledge areas. Boehm and DeMarco (1997) mentioned that “our culture has evolved such that owning up to risks is often confused with defeatism”. In many organizations, the tendency to ‘shoot the messenger’ often discourages people from bringing imminent problems to the attention of management. This attitude is the result of a misunderstanding of risk management. Most software developers and project managers perceive risk management processes and activities as extra work and expense. Risk management processes are the first thing to be removed from the project activities when the project schedule slips.

Agile and Scrum : A detailed perspective

AGILE MANIFESTO |

  • Individuals and interactions over processes and tools.
  • Working software over comprehensive documentation.
  • Customer collaboration over contract negotiation.
  • Responding to change over following a plan.

 AGILE PRINCIPLES |

  • Satisfy the Customer – Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.
  • Embrace Change – Welcome changing requirements, even late in development. Agile processes harness change for the customer’s competitive advantage.
  • Frequent Delivery – Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale.
  • Cross-Functional Collaboration – Business people and developers must work together daily throughout the project.
  • Support and Trust – Build projects around motivated individuals. Give them the environment and support they need, and trust them to get the job done.
  • Face-to-Face Conversation – The most efficient and effective method of conveying information to and within a development team is face-to-face conversation.
  • Working Software – Working software is the primary measure of progress.
  • Sustainable Pace – Agile processes promote sustainable development. The sponsors, developers, and users should be able to maintain a constant pace indefinitely.
  • Technical Excellence – Continuous attention to technical excellence and good design enhances agility.
  • Keep it Simple – Simplicity–the art of maximizing the amount of work not done–is essential.
  • Self-Organization – The best architectures, requirements, and designs emerge from self-organizing teams.
  • Inspect and Adapt – At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior accordingly.

SCRUM

Scrum is a framework, a specific implementation of the agile methodology.  It is an iterative and incremental agile software development framework for managing software projects and product or application development. As mentioned in the Agile Process, Scrum relies on a self-organizing, cross-functional team. The scrum team is self-organizing in that there is no overall team leader who decides which person will do which task or how a problem will be solved. Those are issues that are decided by the team as a whole. The Scrum team is cross-functional; everyone is necessary to take a feature from idea to implementation.

ROLES | that are part of the Scrum framework

There are three core roles and some ancillary roles in the Scrum framework. There is a joke about a chicken and a pig. They are talking and the chicken says, “Let’s start a restaurant.” The pig replies, “Good idea, but what should we call it?” “How about ‘Ham and Eggs,'” says the chicken. “No thanks,” says the pig, “I’d be committed, you’d only be involved.

The roles that are committed are the core roles and the roles that are only involved in the project are the ancillary roles.

CORE ROLES  | The core roles are those committed to the project in the Scrum process—they are the ones producing the product (objective of the project). They represent the scrum team.

  • Product Owner – The Product Owner represents the stakeholders and is the voice of the customer. He or she is accountable for ensuring that the team delivers value to the business. The Product Owner writes (or has the team write) customer-centric items (typically user stories), prioritizes them, and adds them to the product backlog.
  • Development Team – The Development Team is responsible for delivering potentially shippable product increments at the end of each Sprint. A Development Team is made up of 3–9 people with cross-functional skills who do the actual work (analyze, design, develop, test, technical communication, document, etc.). The Development Team in Scrum is self-organizing, even though they may interface with project management organizations (PMOs).
  • Scrum Master – Scrum is facilitated by a Scrum Master, who is accountable for removing impediments to the ability of the team to deliver the sprint goal/deliverables. The Scrum Master is not the team leader, but acts as a buffer between the team and any distracting influences. The Scrum Master ensures that the Scrum process is used as intended.

ANCILLARY ROLES | The ancillary roles in Scrum teams are those with no formal role and infrequent involvement in the Scrum process—but nonetheless, they must be taken into account.

  • Stakeholders – The stakeholders are the customers, vendors. They are people who enable the project and for whom the project produces the agreed-upon benefit[s] that justify its production. They are only directly involved in the process during the sprint reviews.
  • Managers –  People who control the work environment.

ARTIFACTS | produced during scrum framework implementations

  • Product – The primary and the most important artifact of Scrum project is, of course, the product itself. The Scrum model expects the team to bring the product or system to a potentially shippable state at the end of each Scrum sprint.
  • Product backlog – It is a prioritized features list, containing short descriptions of all functionality desired in the product. When using Scrum, it is not necessary to start a project with a lengthy, upfront effort to document all requirements. Typically, a Scrum team and its product owner begin by writing down everything they can think of for agile backlog prioritization. This agile product backlog is almost always more than enough for a first sprint. The Scrum product backlog is then allowed to grow and change as more is learned about the product and its customers. Typically a product backlog consists of the following items – Features, Bugs, Technical work, Knowledge acquisition. The most predominant way for a Scrum team to express features on the agile product backlog is in the form of user stories, which are short, simple descriptions of the desired functionality told from perspective of the user.
  • Sprint backlog – The sprint backlog is the list of tasks identified by the Scrum team during sprint planning. During sprint planning, the team selects some number of product backlog items, usually in the form of user stories, and identifies the tasks necessary to complete each user story. Most teams also estimate how many hours each task will take someone on the team to complete. It is critical that the team selects the items and size of the sprint backlog. Because they are the ones committing to completing the tasks they must be the ones to choose what they are committing to. The sprint backlog is very commonly maintained as a spreadsheet but it is also possible to use your defect tracking system or any of a number of software products designed specifically for Scrum or agile.
  • Sprint burn down chart – The sprint burn down chart is a publicly displayed chart showing remaining work in the sprint backlog. Updated every day, it gives a simple view of the sprint progress. It also provides quick visualizations for reference. There are also other types of burn down, for example the release burn down chart that shows the amount of work left to complete the target commitment for a Product Release (normally spanning through multiple iterations) and the alternative release burn down chart, which basically does the same, but clearly shows scope changes to Release Content, by resetting the baseline.

OTHER KEYWORDS | in the Sprint framework

  • Daily Scrum – On each day of a sprint, the team holds daily meetings (“the daily scrum”). Meetings are typically held in the same location and at the same time each day. Ideally, the daily scrum meeting is held in the morning, as it helps set the context for the coming day’s work. These Scrum daily standup meetings are strictly time-boxed to 15 minutes. This keeps the discussion brisk but relevant.During the daily Scrum, each team member answers the following three questions:What did you do yesterday?What will you do today? Are there any impediments in your way?The daily Scrum meeting is not a status update meeting in which a boss is collecting information about who is behind schedule. Rather, it is a meeting in which team members make commitments to each other.
  • Sprint – A time period (typically 1–4 weeks) in which development occurs on a set of backlog items that the team has committed to. Also commonly referred to as a Time-box or iteration.
  • User Story – A feature described in the product backlog is commonly explained using a story and has a specific suggested structure. The structure of a story is: “As a <user type> I want to <do some action> so that <desired result>” This is done so that the development team can identify the user, action and required result in a request and is a simple way of writing requests that anyone can understand.
  • Epic – An epic is a group of related stories, mainly used in product roadmaps and the backlog for features that have not yet been analyzed enough to break down into component stories.
  • Spike – A period used to research a concept and/or create a simple prototype. Spikes can either be planned to take place in between sprints or it might be accepted as one of many sprint delivery objectives.
  • Tasks – Typically at the beginning of a sprint, the user stories are broken down into tasks and are assigned hours to them.
  • Tracer Bullet – The tracer bullet is a spike with the current architecture, current technology set, and current set of best practices which results in production quality code. It might just be a very narrow implementation of the functionality but is not throw away code.
  • Sashimi – A report that something is “done”. The definition of “done” may vary from one Scrum team to another, but must be consistent within one team.
  • Planning Poker – In the Sprint Planning Meeting, the team sits down to estimate its effort for the stories in the backlog. The Product Owner needs these estimates, so that he or she is empowered to effectively prioritize items in the backlog and, as a result, forecast releases based on the team’s velocity
  • Sprint retrospective – Following one of the core principles of Agile to inspect and adapt. The Scrum team believes that there is always opportunity to improve. Although a good Scrum team will be constantly looking for improvement opportunities, the team should set aside a brief, dedicated period at the end of each sprint to deliberately reflect on how they are doing and to find ways to improve. This occurs during the sprint retrospective.

SUMMARY | of Scrum framework

  • A product owner creates a prioritized wish list called a product backlog.
  • During sprint planning, the team pulls a small chunk from the top of that wishlist, a sprint backlog, and decides how to implement those pieces.
  • The team has a certain amount of time, a sprint, to complete its work – usually two to four weeks – but meets each day to assess its progress (daily scrum).
  • Along the way, the ScrumMaster keeps the team focused on its goal.
  • At the end of the sprint, the work should be potentially shippable, as in ready to hand to a customer, put on a store shelf, or show to a stakeholder.
  • The sprint ends with a sprint review and retrospective.
  • As the next sprint begins, the team chooses another chunk of the product backlog and begins working again.