Improvement Is Everybody’s Business Today change isso swift and relentless in the technosocietios that yesterday's truths suddenly become today’s fictions, and ‘he most highly skilled and intelligent members of society ‘admit dificuly in keeping up with the deluge of new knowledge—even in extremely narrow fields Alvin Toffler [1971] VIEWING SOFTWARE AS A BUSINESS Everyone knows that software is the business to be in today. As Table 1.1 illus- trates, it’s where the jobs are projected to be in tomorrow's economy. tis also the business where fortunes are being made and lost seemingly overnight. Daily hundreds of employees become millionaires as new dotcom companies are brought to market, The value of these entrepreneurs swings back and forth depending on how the market reacts to earnings and product offerings. Fortunes are made and lost when firms are agile and quick to market. Most people would agree that the software industry is a great place to be in today’s computer-driven economy, However, the industry is still cloaked in a veil of mystery. Although computer literate, most users don't understand the intrica- cies associated with building quality software products. Instead, they focus their attention on the features and functions the software provides. Most people view4 IMPROVEMENT IS EVERYBODY'S BUSINESS | Chapter 1 ‘Table 1.1: Fastest-Growing Occupations Profession 1998, 2008 Percentage Change Computer scientists 97,500 212,100 8 Computer engineers 299,300 622,100 108 ‘Computer support specialists 429,300 868,700 102 Systems analysts 616,900 1,194,200 4 Database administrators 87,400 154,900 7 Paralegal personnel 136,000 220,400 a Medical assistants 252,200 398,000 58 Human services workers 268,400 409,900 53 Residential counselors 189,900 277,800 46 Engineering managers 326,200 468,000 4 Medical records technicians 92,400 132,900 4 Dental assistants 228,900 325,400 42 Soure Bureau of Labor Statistics, 1998. software as the mysterious thing that makes the machines do what you want them to do. Thirty years ago, when my airplane seatmates asked about my job, I would say that I was a software engineer. They would ask what a software engineer id. When I told them about the job of building software, they would say, “Oh?” and leave me alone so that I could read my book. They didn’t pretend to under- stand what tasks a software engineer performed. Working with computers was beyond their comprehension. ‘Today, when I provide the same answer, | am deluged with questions about ‘Windows and PCs. But although they are more computer literate, the general pop- ulation still doesn’t really understand what a software engineer does for a living, ‘They still find the profession mysterious and unfathomable. find it safer to tell my seatmates either that I am an IRS tax auditor or that I sell used cars. These are safe answers if your goal isto avoid a conversation so that you can read your book or watch the movie. But watch out for seatmates who are in the professions you name, Once, | sat next to a used car salesperson who became so excited when he found out that I was in the same profession that he talked the entire trip about car auctions and recent deals he’d made,nge want ould eer Oh,” ider- was bout pop: ving, lmy ssafe ok or you snhe tear VIEWING SOFTWARE AS A BUSI vESS. 5 Obviously, the field of software has changed. Just 20 years ago, software was considered obscure, Few used computers, and even fewer understood what soft- ware was all about. Those who did viewed dealing with software with disdain. Firms had to have it to sell their hardware. Computer companies focused on sell- ing machines, not software, because hardware was expensive and the profit mar- gins associated with it were large. Software staffs were put to work developing system software and packages that acted as marketplace differentiators. Universal applications were considered a thing ofthe future, as was building for portability and widespread use outside the technical community Times have changed. Firms that were predominantly hardware-oriented in the past, like IBM, now consider themselves software companies. Hardware prof- its are derived from volume sales because computers are viewed as just another appliance. Network servers and communications gear are where equipment profits are being realized as firms move to the Web. Software firms, such as rosoft, Oracle, and Rational, are the darlings of the market because of their large profit margins. ISPs whose focus is on exploiting the Web for electronic commerce dominate the new offerings on Wall Street. Software is now viewed as a money-making business by investors. Dotcoms may be dropping, but estab- lished enterprises in many industries still expect their Web-based revenues to grow over the next five years [Rice, 2001] While software firms have been making noise since the early 1980s, they didn't take off until the early 1990s. Around that time the general public became computer literate. PC sales took off as nontechnical users embraced the com- puter asa tool in business, education, and commerce. Current times are volatile from a business point of view. To survive, execu- tives must be nimble and quick to market. They must look for better ways to do business. They must continually seek to improve their capabilities and capacity to get the work done. To survive, they must be able to institute changes that make both good technical and good business sense when faced with large risks and uncertainties. Such changes need to be justified; otherwise why make them? How do you justify change and the risks involved in making it happen’ You do so by adding a business case to your technical story. To do this, any of the view- points shown in the improvement framework illustrated in Figure 1.1 provide a ‘compelling reason for making the change. Figure 1.1 illustrates the four dimensions of improvement, each of which can be used to justify an initiative, Each dimension's importance isa function of corporate goals and strategy. For example, you would use reductions in time to6 IMPROVEMENT IS EVERYBODY'S BUSINESS / Chapter 1 Reduce Avoid/Cut Time to Market Cost Productivity Quality Increase Improve Figure 1.1: Improvement Framework market to justify your proposed changes if your firm were focusing on this objective asa strategic goal. What's needed to sell these improvements is a sound argument for the change; for example, the change cuts costs by a third or shaves three months off the production cycle. When the change is properly introduced and managed, improvement results. Not surprisingly, that’s why I use “improvement by the numbers” as the subtitle ofthis book. To get approval to make the improvement, you need to develop a persuasive business case, To realize the improvement, you have to manage the change involved in rolling it out and making it happen. ‘Aword of caution, Executives are like elephants when it comes to numbers. ‘Their memories are long, and they rarely forget a number once they hear it. They may look as if they are sleeping in the back of the room, but beware. I remember briefing the president of a major telecommunications firm not so long ago about benchmarks I had developed for assessing his quality improvement program progress relative to industry norms. The president stated: “I'm surprised at the defect rates you are quoting. Three years ago in June you stated that the industry standard for the switching system domain was 1.31 errors per thousand lines of code versus the 1.33 that you are now saying we will have after the system is placed in the field.” CHANGE IS THE NATURE OF SOFTWARE Although tricky, dealing with the changes made as part of any improvement pro- gram is a normal part of the job in a software organization for three reasons. First, the primary function of software is to accommodate change. That’s why we put features and functions in software, not hardware. With hardware, functions are static. Although its performance can be optimized, its functionality is hard to