How to Justify Early Extra Investment to Reduce Late Budget Overruns
Software projects that result in late budget overruns are never welcome. As a result, most companies take steps to keep tight control on costs, particularly in the early stages of a project. Therefore, the last thing they want to see is a big invoice during the initial scoping and design stages, i.e. before coding even begins, let alone testing.
Providing extra investment in a project’s early stages, however, is the best way to reduce late budget overruns. Specifically, early investment in the requirements and design stages helps to identify potential defects and remove them from the system as early as possible.
This approach is exponentially cheaper than finding and fixing bugs at a later stage in the project.
The Cost of Software Defects
Well-known research backs up this approach, particularly research by Barry Boehm of the University of Southern California and Victor R. Basili of the University of Maryland. Their research confirms what we have seen at SL Controls in numerous projects.
In particular, the Boehm and Basili research describes how the cost of fixing a defect is up to 100 times more expensive at the end of a project (the maintenance phase) compared to fixing a defect at the start (the requirements phase). In addition, the cost of fixing a defect increases through each stage of the project. The cost increases considerably after the main coding stage.
Source: B. Boehm and V. Basili, Software Defect Reduction Top 10 List, IEEE Computer, IEEE Computer Society, Vol. 34, No. 1, January 2001, pp. 135-137
The general principles related to the cost of defects are as follows:
- The longer a defect remains in a project, the more damage it does as it will have a broader impact than a defect introduced at a late stage
- The longer a defect remains in a project, the costlier it is to fix
- Spending more time and resources in the requirements and design stages of a project will identify defects early and, importantly, will help to prevent defects from entering the project further down the line
- All defects identified late will be costlier to fix
- Software projects spend up to 50 percent of their resources on avoidable rework
- 20 percent of defects account for 80 percent of avoidable rework
The solution is to find and address defects in the requirements and design stages. After all, it will always be cheaper and more efficient to avoid putting defects into the code in the first place than it is to find and remove them at a later date.
The SL Controls Experience
We have referenced below one example of a project we were involved in where several decisions were made in the early stages that led to significant difficulties at the latter stages of the project. At their core was a failure to take a controls and data-focused approach with clearly defined Critical to Quality (CTQ) parameters.
This led to a situation where several requirements of the project were not met. Crucially, these defects were not discovered until the Site Acceptance Testing (SAT) stage of the project. It should be noted there was no Functional Acceptance Testing (FAT) at the OEM site for scheduling reasons which resulted in the defects being uncovered later in the testing phase.
The late discovery of the defects resulted in the project going over budget and over schedule.
Of course, the situation could have been worse if production went live with critical software defects. The budget overruns were, however, significant.
We ran calculations showing this budget overrun could have been almost completely eliminated if the defects were found and corrected at the requirements and design stages of the project. It is likely the project would also have completed on schedule which would have saved the company even more.
Focus on the Early Stages
In summary, the best way to avoid budget overruns in software projects is to focus on identifying risks and defining CTQs in the requirements and design stages. This preventative approach is considerably less expensive than a corrective one that relies on the coding and testing stages to identify and remove defects.
The Four Pillars of Successful Project Delivery – QUAD
Successful projects don’t happen by chance. They need careful planning, proactive management, proven quality control measures, effective design, proper resourcing, and more. At SL Controls, we use an approach to deliver projects that we call QUAD. It is implemented on all systems integration projects. It involves building each project on four essential pillars of success:
- Q – Quality
- U – Utilise
- A – Accomplish
- D – Design
The pillared structure of the approach is key to its success. It is not linear where one element follows another. Instead, each of the four pillars is equally important and is crucial at all stages of project delivery.
Without a focus on each of the four pillars, one or more might crumble or buckle putting the whole structure – or project – at risk.
What is QUAD?
To make QUAD work when delivering a project, it is essential to have good communication with all individuals and teams involved, both internal and external. Effective collaboration is essential.
The QUAD project delivery structure includes the following elements:
- Quality – the assurance of a successful project. This element is delivered in accordance with our Quality Management System (QMS) where we implement a peer reviewed risk-based approach. This is supported by critical internal processes such as change management, document control, training, and risk management. These supporting processes are paramount to ensuring our projects are delivered to the highest possible standards.
- Utilise – this is the enabling element of a successful project. Much of this part of the delivery involves the utilisation of the existing team through upskilling and, where necessary, recruiting new members. In addition, staff retention initiatives are incredibly important to maintain resource continuity.
- Accomplish – this is the execution pillar where the focus is on engineering the project to a successful conclusion. As this is the doing element of the project, Safety is the single most important component. Therefore, it involves the execution of Safety Risk Assessments, Safe Plans of Action, and Method Statements. This pillar is also closely integrated with the design pillar and there is a constant feedback loop.
- Design – this is a pre-requisite of all successful projects. As a result, the bulk of the heavy lifting with this pillar happens in the early stages from the initial scoping work to completing the design. Sticking with the QUAD philosophy, however, the design phase is never truly complete and remains an important pillar of the project for the duration.
As you can see, some of the elements above have a company level perspective as much as a project level perspective. Talent retention is the most obvious example, along with internal team collaboration. In other words, for QUAD to be truly effective, the approach must be accepted and championed by all departments and at all organisational levels.
When this happens, the elements come together to ensure the successful delivery of projects.
Benefits of the QUAD Approach
- Quality – delivers quality throughout all stages of the project to both internal and external standards.
- Flexible and agile – with QUAD, it is possible to quickly and efficiently adapt to changes in a project’s scope. Being flexible and agile also allows you to scale up a project with minimal disruption or complication. This particularly applies when implementing a project by phases or when you start with a pilot.
- On-time delivery – QUAD makes it possible to meet deadlines.
- Deliver on budget – completing projects on budget is another crucial objective of using the QUAD delivery approach.
- Ensure resources are in place when they are needed – many projects stand and fall on the availability of resources. QUAD’s robust, integrated, and dependent structure mitigates this risk.
- Delivers on expectations – as well as delivering projects on time and on budget, QUAD also delivers on other expectations. This includes achieving the project’s expected outcomes and delivering ROI.
Successful Project Delivery
The above is a brief overview of how QUAD helps deliver successful projects. In the coming weeks, we will look at each of the four pillars in more detail, including the challenges faced in each and the strategies used to ensure success.
Staying Competitive – 4 Things You Need to Consider in Your 2018 Budget
It’s that time of year again – planning, prioritising, and setting budgets for your plant for the coming year. What are you going to budget for in 2018?
You will, of course, have similar priorities that you always have in your yearly plans and budgets – productivity gains, efficiency savings, capital equipment investment, staffing and recruitment, staff training and upskilling, etc. You may also be allocating additional budget to some current hot topics. Cybersecurity is a good example.
You’re probably coming close to finalising the 2018 budget but before you sign it off completely, here are some things you should consider.
What Should Also Be on Your Agenda in 2018
While all the above are important, there are other things you should consider including in the 2018 plan for your plant. This includes new and developing technologies that will provide a foundation you can build on to help you remain competitive in what is a constantly evolving and often challenging market.
If you haven’t considered the following four topic areas, you should look at them before finalising your budgets and plans for 2018:
- Factory 4.0
- Compliance and serialisation
- Computer systems validation
- Data analytics
Let’s look at each in more detail.
Factory 4.0 – the Birth of a Revolution
Factory 4.0 (or industry 4.0) is gaining a reputation as being a buzzword. It is more than a concept for the future, though. In fact, it’s a commercial reality now so it’s probably not something you can leave until future years.
Where do you start, however? It’s such a huge topic and there is no way you can achieve major change over 2018, right? Of course, but you should start now or you risk falling behind.
A good approach is to conduct a scoping exercise in 2018 regarding factory 4.0. This should look at what the technology and processes will mean for your business while also assessing your existing position in relation to modernising your facilities. Examples include:
- Do you need to buy new equipment?
- What additional expertise and third-party assistance will you need?
- What new software will you need?
- Will your existing systems integrate?
- And more
Once the scoping exercise and assessment are complete, you can measure the expected ROI of factory 4.0 in your plant and start planning for implementation.
Compliance and Serialisation
Depending on your industry and region, serialisation deadlines may affect your business in 2018. You should be some way along the road of getting ready by now. If you are not, however, you will need to allocate more of your 2018 budget to catch up and ensure you meet the deadlines.
Computer Systems Validation
As you know, process validation is always a major priority. Machines are getting smarter, though, and the world is becoming more software driven. In addition, the world’s regulators are starting to shift their attentions more and more towards software validation.
If you haven’t already started investing more of your budget on software validation than you have in the past, it will be beneficial to start in 2018. This will keep you ahead of the curve, it will improve your operations today, and it will ensure you are more equipped for the future.
Data analytics will improve your business as your team will have more accurate information and less paperwork to deal with. This means they can focus on the data so they can plan more efficiently and identify areas for improvement. In addition, more accurate data will give a better insight into your operations.
Where do you start, though, and what exactly is possible? How can machine A effectively talk to machine B and how can systems built on completely different platforms interact seamlessly, i.e. in a way that benefits your business and doesn’t just cause you more headaches? What will be the real impact on operations, intended and unintended?
These are all valid concerns but the problem with data analytics is not the technology as it exists and is effective. The problem is having the expertise to roll it out.
Therefore, this is what you should look at in 2018. Add to your budget in 2018 a plan to bring in the expertise. Again, this is often best achieved through a third-party specialist. Also, you should look at implementing data analytics on a stage-by-stage basis so you can measure success, analyse the benefits, and ensure the full roll out goes smoothly.
Usually, the best way to start is with a pilot, ideally focusing on a problem area or problem machine in your facility. You can use this pilot to measure ROI and then plan to roll out implementation to your full plant in late 2018 and into 2019.
Moving Your Plant Forward in 2018
Each of the four priorities above is likely to be a part of your thinking when planning and budgeting for many years to come. The time to start is now.
Blog: Valuing and Retaining Contingent Workers
Successfully Managing a Consistent Supply of Contingent Workers
There are a huge number of challenges associated with the successful management of non-permanent contingent workers. The high turnover rate of contingent workers has long been a thorny issue. At SL Controls, we have found a perfect balance and an excellent solution to retaining a contented workforce and, ultimately, satisfied clients.
As both an employer and a supplier of choice for highly skilled engineering staff, we at SL Controls tasked ourselves with seeking an innovative solution to help alleviate the high turnover of contingent workers and ensure a consistently high level of service to our clients. We are pleased to share our hard earned expertise and knowledge.
Implementing a Contingent Workforce Solution
In 2011, SL Controls began supplying contingent workers to a leading healthcare company in the mid-west region of Ireland. Our client needed support for their core permanent workforce. They also needed the flexibility to augment their internal software controls and software validation departments as demand dictated.
Our contingent workforce solution offered them:
- Enhanced flexibility to increase resources during peak project workloads
- Access to a unique and specialised set of skillsets which they did not have requirements for on a permanent basis
The initial deployment of software controls and the accompanying validation engineers was centrally managed from SL Controls’ head office. The identified skillsets required by the client were carefully matched to our existing engineering staff.
The early months of providing this service proved to be very successful with the client acknowledging the valuable contributions and making additional requests for other specialist engineering skillsets in the IT server compliance and MES integration domains. However, over the medium to long-term, some issues emerged.
The Challenge of Retaining High-Quality Staff – Eliminating the High Attrition Rate of Contingent Workers
The consistency of the service underwent a robust test and was not sustainable over the medium to long term. Isolation, both geographically and from the core employer, was identified as an issue.
For example, one of the SL Controls engineers working on the client site in the mid-west had to travel four hours from Donegal on a Sunday evening to work onsite at the client’s premises from Monday through until Friday. The continuous travel combined with being away from family during the working week meant the proper work/life balance could not be achieved. This ultimately resulted in the employee relocating to our head office in Sligo.
This scenario is typical and continues to be experienced by other suppliers of contingent workers to the pharmaceutical and medical devices sectors. Action needed to be taken to ensure that SL Controls employees working onsite for the client had the proper work/life balance while also feeling connected to the local SL Controls office.
The Impact on Clients
The client is also directly impacted when contingent workers are displaced. Clients typically invest upwards of six months in an engineer who then becomes knowledgeable and familiarised with their systems and processes. This time investment is something that cannot be recouped.
The idea of, once again, commencing the search for a replacement engineer is daunting. The loss of skillsets gained through the process of learning and understanding key technologies and tools as part of their daily project duties weighs heavily in terms of time costs.
There are no winners in this type of scenario as the employee seeks to strike the correct work/life balance and the client is left with the situation of having to reinvest in another engineer who may similarly fall victim to the same mitigating circumstances.
The Solution – SL Controls Invests in a Region and Its People
SL Controls invested in becoming a supplier of a highly skilled contingent workforce to address the issues. Having analysed the set of contributing factors, SL Controls took action in 2013 to help construct and underpin a more robust process. Employing locally would be a priority.
Our approach included:
- Establishing a local projects office to service the entire mid-west region. The National Technology Park in Limerick was deemed most suitable.
- Identifying and hiring local software controls and validation engineering talent in the mid-west region.
This approach brought several benefits:
- As permanent staff of SL Controls, this highly skilled workforce experiences better job satisfaction
- As the staff are more satisfied, they are more committed to the company and its ethos
- Employing locally invests in the region and the community
- Employees feel they are an integral part of the company
- Employees feel they have identified career paths
This pride and ownership helps to remove the temptation for employees to engage with head hunters.
The Result – Improved Service Delivery Levels
The ability to hire locally has proven very successful. It has resulted in staff retention rates in excess of 95%.
In keeping with the traditional company values, SL Controls continues to hire only permanent staff, providing a greater degree of certainty for the employee and also for the client. All SL Controls’ employees are provided with a structured career path which allows them to develop and progress in their chosen engineering disciplines. This is further underpinned by the company’s core values of fairness, camaraderie, respect, communication, innovation and balanced lives.
The benefits, as seen and acknowledged by our clients, is first and foremost in the continuity of service which they have witnessed since 2013. We have provided them with a platform where they can rely and call upon the same group of engineers to work with and alongside their own permanent staff.
As the relationship develops over time, the knowledge and experience gained by SL Controls engineers on client systems and processes have opened up opportunities for clients to engage the SL Controls’ local projects office to undertake specific turnkey software and validation projects.
The model of establishing an office and hiring local permanent staff has since been rolled out to the Dublin and Galway regions, with the same degree of success. The low staff turnover, high-quality of work, and the timely and successful completion of projects by SL Controls’ highly skilled staff are a testament to the commitment made in valuing our workforce.