VALUE ENGINEERING IN SW PROCESS IMPROVEMENT. Pasi Ojala, University of Oulu, Finland

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1 VALUE ENGINEERING IN SW PROCESS IMPROVEMENT Pasi Ojala, University of of Oulu, Finland 7 TH TH November 2003 Helsinki, Finland 20 January 2004 CONTENT OVERVIEW - VALUE ENGINEERING CONCEPT - VALUE vs. CAPABILITY - VALUE ENGINEERING PROCESS VE AS A SW PROCESS IMPROVEMENT TOOL - NEW POSSIBILITIES - CAPABILITY ASSESSMENT OF VE PROCESSES - VE ASSESSMENT OF ALL PROCESSES - VE ASSESSMENT OF A PRODUCT - ENHANCED ASSESSMENT PROCESS FIRST ASSESSMENT - FIRST ASSESSMENT - EXPERIENCES - CONCLUSIONS 2/31

2 OVERVIEW - VALUE ENGINEERING CONCEPT - VALUE vs. CAPABILITY - VALUE ENGINEERING PROCESS 3/31 VALUE ENGINEERING CONCEPT > VE is a rigorous, systematic effort to improve the value and optimize the life cycle cost of a function or a facility. > VE generates cost improvements without sacrificing the capability levels needed. > Value is defined as: Value = Worth/Cost Worth= how much customer is willing to pay or Least possible production cost Cost= Real production cost 4/31

3 VALUE vs. CAPABILITY VALUE (+) Do something / Improve Situation is in control CAPABILITY (-) CAPABILITY (+) Do not worry Wasted quality VALUE (-) 5/31 VALUE ENGINEERING PROCESS VALUE STUDY PRE-STUDY Orientation Collect user/customer requirements Complete data file Determine evaluation factors Scope the study Build data models Determine team composition VALUE STUDY Information phase Complete data package Modify scope Function analysis phase Identify functions Classify functions Develop functions models Establish function worth Cost functions Establish value index Select function for study Creative phase Create quantity of ideas by function Evaluation phase Rank and rate alternative ideas Select ideas for development Development phase Conduct benefit analysis Complete technical data package Create implementation plan Prepare final proposals Presentation phase Present oral report POST-STUDY Complete changes Implement changes Monitor status Prepare written report 6/31

4 VE AS A SW PROCESS IMPROVEMENT TOOL - NEW POSSIBILITIES - CAPABILITY ASSESSMENT OF VE PROCESSES - VE ASSESSMENT OF ALL PROCESSES - VE ASSESSMENT OF A PRODUCT - ENHANCED ASSESSMENT PROCESS 7/31 NEW POSSIBILITIES > Three enhancements: Capability assessments to VE processes VE assessment of all processes VE assessment of a product 8/31

5 CAPABILITY ASSESSMENT OF VE PROCESSES > The enhanced assessment model is defined to include following new processes: VAL.1 Information collection VAL.2 Function analysis VAL.3 Being Creative VAL.4 Evaluation VAL.5 Development VAL.6 Presenting results > Value was defined as: Value = Worth/Cost Worth= how much customer is willing to pay or Least possible production cost Cost= Real production cost 9/31 VE ASSESSMENT OF ALL PROCESSES VALUE ENGINEERING BOOTSTRAP 3.2 VAL.1 Information collection VAL.2 Function analysis VAL.3 Being Creative VAL.4 Evaluation VAL.5 Development VAL.6 Presenting results LIFE CYCLE DEPENDENT ORGANIZATION ORG.1 Business engineering ORG.2 Human Resource Management ORG.3 Infrastructure Management METHODOLOGY LIFE CYCLE INDEPENDENT TECHNOLOGY TEC.1 Technology Innovation TEC.2 Technology Support for Life Cycle Processes TEC.3 Technology Support for Life Cycle Independent Processes Tool integration PROCESS RELATED ENG.1 System Requirements Analysis ENG.2 System Architecture Design ENG.3 Software Requirements Analysis ENG.4 Software Architecture Design ENG.5 Software Detailed Design ENG.6 Software Implementation and Testing ENG.7 Software Integration and Testing ENG.8 System Integration and Testing ENG.9 Maintenance ENG.10 Migration ENG.11 Retirement MANAGEMENT MAN.1 Project management MAN.2 Quality Management MAN.3 Risk Management MAN.4 Subcontractor Management SUPPORT SUP.1 Documentation SUP.2 Configuration Management SUP.3 Quality Assurance SUP.4 Verification SUP.5 Validation SUP.6 Joint Review SUP.7 Audit SUP.8 Problem Resolution PRO.1 Process definition PRO.2 Process Improvement CUSTOMER SUPPLIER CUS. 1 Aquisition CUS.2 Customer need mgnt CUS.3 Supply CUS.4 Software Operation CUS.5 Customer Support 10/31

6 VE ASSESSMENT OF A PRODUCT > Product assessment is done using normal VE process: VAL.1 Information collection VAL.2 Function analysis VAL.3 Being Creative VAL.4 Evaluation VAL.5 Development VAL.6 Presenting results > Functions are defined as product parts > Costs are assigned to functions and their subfunctions 11/31 ENHANCED ASSESSMENT PROCESS Pre- Assesment Briefing PREPARATION Initialization VE function analysis* Assessment team Identification Collecting Supporting Material Planning & Scheduling Defining Confidentiality Agreement EXECUTION Opening SPU Project Briefing Evaluation Final Assessment Assessment Assessment Feedback Assessment Sessions Report Preparation ReportPreparation VE STUDY, IMPROVEMENT PLANNING AND EXECUTION Orientation ** Information ** Function Analysis ** Creative phase Evaluation Development Presentation End of enhanced BOOTSTRAP Assessment * Used in value based focusing. ** Not needed in value based focusing. Activation of the SPI Process Progress Check 12/31

7 FIRST ASSESSMENT - FIRST ASSESSMENT - EXPERIENCES - CONCLUSIONS 13/31 FIRST ASSESSMENT > The first assessment using enhanced BOOTSTRAP assessment method was performed in summer of > It was a full assessment and included capability level calculations for all processes described in enhanced assessment model and process > Cost, worth and value were calculated as an ad hoc basis for certain processes. 14/31

8 EXPERIENCES > Experiences of the first assessment pointed out that the enhanced BOOTSTRAP assessment model works in practice. > Capability levels can be calculated for Value engineering processes as well as cost, worth and value. > In calculating cost, worth and value practical problems might rise if a company does not have sophisticated cost accounting systems. 15/31 CONCLUSIONS > The enhanced BOOTSTRAP assessment model still needs more development work > The relationship between VE processes and existing processes in capability based assessment methods needs more definition work as well as capability levels definition > The value dimension added possibilities to evaluate the level how well company and it s projects seek value improvement possibilities in their processes > Evaluating the value processes put people to think the value which is the starting point for for improvement work 16/31

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