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Quantifying the return on investment

You still have to answer the vice president. But the consultant earned his keep by providing you the information you need to compute the return on investment. Your briefing, which is illustrated in Figures 5.8 through 5.13, is aimed at educating and convincing the new vice president of research that the money allocated to software process improvement will be well spent. The briefing is short and to the point. It assumes that the vice president doesn't want cluttered charts that get into the details. When you reviewed your charts with your boss, he threw more than half of them out. The six that survived are the charts he helped you construct. You were disappointed when he told you not to bring the consultant. But after thinking about the briefing throughout the night, you concluded that he was right. This should be an inside job.

The chart in Figure 5.8 sets the stage by emphasizing the importance of software to the firm. It lets you talk about government requirements and competitive pressures. It also lets you set expectations.

The chart in Figure 5.9 highlights your current software improvement strategy. It lets you talk about your motivation for the initiative, strategy, and past performance. It then lets you describe the four-part improvement framework you plan to use to reach Level 4 within two years.

The chart in Figure 5.10 identifies $6.2M in cost avoidance that you will realize. It shows reuse but allows you to state that you have not considered this in the ROI calculation because of timing. Because of long lead times required to change the culture, the forecasted benefits will accrue outside the two-year window you have been given to reach Level 4.

The chart in Figure 5.11 shows the process group budget and its current headcount. The bottom line on the chart allows you to emphasize importance of process as the framework for other improvements. It also lets you move to the ROI chart.

Figure 5.8: Executive Briefing—Background

Figure 5.9: Executive Briefing—Strategy

Figure 5.10: Executive Briefing—Returns

Figure 5.11: Executive Briefing—Costs

The chart in Figure 5.12 performs the ROI calculation. It takes the annual benefits in the second year and divides them by the investments necessary to pull them off. It lets you highlight both the tangible and intangible benefits. Finally, it lets you talk about software reuse as an added benefit (i.e., you don't have to bet the farm on it).

Besides setting expectations, your final chart ( Figure 5.13) asks for the vice president's support. You took your boss's advice when he said: "Never brief an executive without asking for something."You asked for advice and for something you knew the vice president could help you do. Your request will endear you to him because it was designed to make him look like a hero.

As expected, the briefing went well. The vice president was inquisitive, supportive, and helpful. His parting remark was, "Count on me to help you get middle management in your camp." Your boss was pleased, and your team was thrilled at the prospects of having even more senior management support. However, you are wary. This vice president is too new to the firm to really help you pull your Level 4 initiative off in the planned time frame. All you can do is stop him from causing damage.

Figure 5.12: Executive Briefing—ROI

Figure 5.13: Executive Briefing—Finale

The disturbing news was that only one middle manager besides your boss was present at the briefing. You invited a dozen and only one showed up. Most complained that they were just too busy to attend. You are concerned that their lack of attention signals their lack of concern.

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