Nationwide Application Development Center

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1 Nationwide Application Development Center Lean Framework, Agile Principles, and CMMI The Path to Agility May 26 th, 2011

2 About Us Tom Paider Director, IT Applications, Application Development Leader Masters in Business Operational Excellence, The Ohio State University Six Sigma Black Belt Project Management Professional (PMP) Dustin Potts Director, IT Applications, Application Development Leader Development Staffing Leader, Application Development Center Over 20 years experience in Software Development 2

3 About Nationwide Nationwide is one of the largest insurance and financial services companies in the world with over $135B in statutory assets. We provide insurance, retirement, investments, and other products to consumers in the US. Companies include Nationwide Insurance, Titan Insurance, Allied Insurance, Agribusiness, Nationwide Financial, Nationwide Retirement Solutions, Nationwide Bank, VPI, among others 3

4 About The Application Development Center Centralized software development group focused on process and technical excellence Responsible for our most strategic application development annually A Lean software development organization leveraging Agile practices Operational Excellence is in our DNA Culture of quality, predictable delivery, continuous improvement Industry leader in software development 4

5 Let s Get Started on our Journey! Grassroots Beginnings Lean, Mean, Coding Machine Why CMMI? 5

6 The Business View of IT Origins of the Problem Complexity: IT projects are viewed by the business as extremely complex and hard to understand Misdirection: IT often fails to grasp the intentions of the business when building applications Project Failure: projects often run over-budget, late, and fail to deliver the expected benefits Cost Focus: IT is often viewed as a cost center instead of a business enabler Speed: the reaction time of IT to changing business environments is perceived as too slow 6

7 The IT View of Business Origins of the Problem Conflicting Priorities: the business is often unclear on what the priorities are for the IT organization Lack of Inclusion: IT is often brought into projects late and are not offered the chance for collaboration Multitasking: too many projects are assigned to IT at once Gold-plating: excessive automation instead of doing the simplest thing that works adds to complexity Poor quality control: defect acceptance has become the norm and the business does not want to invest in a quality product 7

8 The Real Problem? 8

9 Attacking the Problem The Agile Movement Begins Agile Grassroots Movement: Began in 2004 One project at a time (Pilot) Different coaches lead to localized Agile processes Lack of communication between Agile teams Each saw success, but had limited impact on the overall enterprise Agile 9

10 Agile at Nationwide Coordination and Collaboration Begins Began in summer of 2008 Harvested Agile best practices Nationwide s leading Agile activists together for first time Focused on Scrum and XP practices Created Nationwide s 21 Agile Tea Leaves. Nationwide s Agile Manifesto Agile Community is formed Agile 10

11 Nationwide s 21 Agile Tea Leaves Whole Team Open Workspace Daily Stand Up Meetings Big Visible Charts Retrospectives Customer Collaboration Collective Code Ownership Simple & Evolutionary Design Test Driven Development Refactoring Continuous Integration Automated Regression Tests Technical Debt Pair Programming Sustainable Pace Iterations/Sprints Iteration Planning Meetings Show & Tells Frequent Releases Release Planning Meetings Story Cards with Acceptance Criteria

12 The Application Development Center Now that we have the pieces, how do we scale them? 12

13 How Much Scale? Hundreds of millions of dollars spent on building software Thousands of IT associates Development platforms include distributed, mainframe, mobile, and client-server IT is the lifeblood of our industry our products are data and information flows 13

14 The Application Development Center Enterprise Agile In 2009, Nationwide forms the Application Development Center The New Problem Repeating localized success Only a handful of successful Agile teams Nationwide s 21 Agile Tea Leaves were philosophy not process A Framework was needed to scale Agile at Nationwide Agile 14

15 A Framework for Agile Lean To Summarize: no reuse, no standards, inability to replicate agile successes across the enterprise How to tackle these problems? Operational Excellence rooted in a Lean Application Development Center 15

16 The ADC Lean House A Framework for Our Transformation Operational Excellence Learning Organization Visual Management The ADC transformation focused on creating a sustainable system, not implementing a series of tools or techniques. Culture shifts were required in staff and management. Lean Management System Leader Standardized Work Daily Accountability Process Disciplined Management On Your Side Constancy of Purpose Lean Development System Standardized Work Kaizen Waste Elimination Problem Solving Culture Employee Engagement 16

17 Lean Development System The Engine of a Lean IT Transformation The Lean Development System governs how the actual work is executed, improved, and monitored in the overall system. The Development System: Creates an efficient process sequence with the lowest possible waste Standardizes routine work items to allow our knowledge workers the freedom to concentrate on value-added activities Empowers team members to continuously improve upon the standards and improve the entire ADC with their ideas 17

18 Standardized Work Basis for Continuous Improvement Standardization is not just for manufacturing environments. Standardized Work applies as much to Information Technology as it does to manufacturing and other industries. Why is standardization in the ADC important? Maintains a consistent level of quality Stabilizes the working condition Allows for the judgment of normal from abnormal conditions Enabling Waste Elimination Increased Productivity Improved Morale Foundation for Improvement Activities

19 Kaizen, Continuous Improvement, and A3s Relentless Pursuit of Perfection /kai י zen/ - continuous incremental improvement Kaizen is a philosophy of continuous improvement that pervades throughout all areas and aspects of the organization. It is embedded in our culture and becomes a part of who we are in the ADC. Nationwide ADC Continuous Improvement Applies to both formal kaizen events and kaizen eyes everyday continuous improvement to root out waste Is driven by practitioners Provides a governance mechanism for pushing changes into our processes Utilizes A3s to ensure PDCA thinking as well as other lean tools such as 5 Whys, Fishbone, etc.

20 Lean Management System A Necessary Pillar for the Lean House We teach our associates how to be lean workers, but forget to teach our managers how to be lean leaders. Lean Processes Need Lean Management! Without the Lean Management System, the gains of implementing a Lean Development System cannot be supported and maintained. Lean Production System Standardized Work Kaizen Waste Elimination Problem Solving Culture Employee Engagement 20

21 Leader Standardized Work Traditional management places emphasis on getting results at the expense of process and system thinking. This creates short-term gains, but frequently causes long-term pain. Leader standardized work ensures leaders use systems thinking and focus on training others, managing flow, and eliminating waste. Standardized work is the tool used to ensure this focus happens automatically every day in a lean organization. 21

22 Leader Standardized Work in the ADC Standardized work is specific and focused on value adding activities. Different levels in the organization have varying amounts of standardized work versus discretionary work. Decreasing amount of standardized work Team Leaders Lead standup meeting Setup visual management system for the day Periodic updates of visual system Attend management standup Gemba walk with manager Review blocker board Directors Lead management standup meeting Gemba walk with each team Inspect visual management system periodically Review daily accountability board Attend executive standup meeting Review continuous improvement board Executives Lead executive standup meeting Gemba walk with each team (weekly) Review daily accountability board Review continuous improvement board 22

23 Daily Accountability Process Ensuring Leaders are Focused on Value Team ADL ADE Daily Standup Meeting Local Team Topics Daily Standup with Team Leads Operational and Improvement Topics Daily Standup with ADLs Operational, Improvement, Trends Three interlocking tiered meetings, less than 15 minutes each. Focus is on process and results. All meetings utilize part of the Visual Management System to drive discussions and assignments. Each meeting also serves to ensure the VMS is updated and accurate. 23

24 Fusing Lean and Agile Practices All Together Now Operational Excellence Learning Organization Visual Management Lean Management System Leader Standardized Work Daily Accountability Process On Your Side Constancy of Purpose Lean Production System Standardized Work Kaizen Disciplined Management Problem Solving Culture Employee Engagement Waste Elimination 24

25 ADC Franchise Model

26 How Good Are We? Our Desire: World Class Development Center CMMI as Measuring Stick CMMI represents industry best practices in engineering, project management, and organizational practices Burning Platform: Achieve CMMI L3 in 9 months 26

27 CMMI L3 (Defined) Level 3 Process Areas (11) Requirements Development Technical Solution Product Integration Verification Validation Organizational Process Focus Organizational Process Definition Organizational Training Integrated Project Management Risk Management Decision Analysis and Resolution Level 2 Process Areas (7) 1. Requirements Management 2. Project Planning 3. Project Monitoring and Control 4. Measurement and Analysis 5. Supplier Agreement Management 6. Process and Product Quality Assurance 7. Configuration Management

28 CMMI L3 Success! Application Development Center (ADC) achieves CMMI L3! Completed in 9 Months Zero Weaknesses Among 1st to Achieve CMMI L3 while leveraging Agile and Lean Processes I ve never had a CMMI assessment with zero weaknesses in my 19 years of doing them - Nationwide CMMI Lead Assessor 28

29 How Did We Do It? Eat Your Own Dog Food! Leveraged Agile Practices for Initiative Practitioner-Led Creates Buy-in with Team Simplest Thing that Works Complexity Leads to Confusion 29

30 Where Are We Today? World Class Development Center 26 teams and counting Documented Development Processes Supporting Curriculum Maturity Assessments Metrics High Performing Teams 15% better than industry average Unprecedented Quality Levels

31 How It All Fits Together CMMI Benchmarking Burning Platform Enterprise Scalability Management System Standard Work Kaizen Lean ADC Agile Software Development Quality Predictability 31

32 Application Development Center 32

33 Thank You! Dustin Potts Tom Paider

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