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Getting the Most Out of CMMI: Why Level 3 Might Be Good Enough
Manila, Philippines - August 2007

The main objective of establishing process standards in the IT industry is to ensure a high quality in the output generated by the IT industry. In the case of service support and delivery by IT firms, ITIL is most often used, while in the case of software development and deployment, CMMi is the dominant framework. Unfortunately, only a few firms in the Philippines actually extensively use any of these standards. And yet, the Philippines is aggressively positioning itself as a global player when it comes to servicing the IT requirements of foreign and multinational companies.

Amidst these developments, an increasing number of local companies eager to get a piece of the global market for IT services are seriously asking what set of standards they should adopt. Particular among these companies are small and medium enterprises (SMEs) who believe breaking into the global market will allow them to attain their growth objectives. In this article, the use of CMMi will be discussed to establish the fundamental principles that define what kind of companies and what kind of business activities are suitable for CMMi adoption.

CMMi stands for Capability Maturity Model Integration framework. CMMi is the successor of CMM, or Capability Maturity Model. CMM itself was developed by the Carnegie-Mellon Software Engineering Institute (SEI) in 1989 for the US Air Force. CMM was intended to serve as a basis for the objective evaluation of subcontracted software development projects. It has since evolved into a means of measuring an organization’s capability to implement software development projects on time, within budget and to acceptable quality standards. At the same time, CMM can serve as a guide in plotting the direction by which a software development organization can improve its business processes.

CMMi was developed by the SEI as an improvement to CMM, eventually superseding the older framework in 2006 with the release of CMMi version 1.2. With version 1.2 CMMi has expanded the scope of the capability maturity model to cover more than software development. Version 1.2 now includes the realm of service provisioning (such as is the case with IT-enabled service organizations like call centers and business process outsourcing firms) and acquisition processes (such as that involved in purchasing and vendor selection activities).

Among the various maturity models, none have been more aggressive than or as comprehensive as the Capability Maturity Model Integration framework. The CMMI product suite includes the integrated models (systems/software engineering and integrated process development), training and an assessment methodology (SCAMPI) that support built-in process/product improvement across the organization.
So far there is an increasing practice of combining CMMi with other methodologies of process improvement. Among the frameworks that have seen successful combination with CMMi include the ISO 9001 family of standards, the Extreme Programming (XP) methodologies, and Six Sigma.

CMMi maturity is expressed in terms of levels, of which there are five. In theory, the most mature organization would merit an appraised maturity level of 5.

Today there are estimated to be more than 450 companies that are certified in CMM and CMMi, according to the SEI website. It is expected that another 100 or so companies have opted not to have their certification published. Approximately 190 of the 450 companies listed in the SEI website have attained level 5 certification. Many level 5 companies cited the contribution of attaining level 5 CMMi certification on their business success. The most well known case was IBM Global Services Australia publicly declaring that adoption of the CMMi Level 5 ideals helped save more than $230 Million for its customers. A lot more companies, however, have noted the difficulties of moving up the CMMi levels. Most could only manage Level 2 or 3. And this brings up a question that is increasingly being asked by many other organizations, on whether CMMi Level 5 certification is actually worth the trouble of acquiring.

XMG research has shown that although CMMI will continue to be the dominant maturity model standard among commercial IT organizations wanting to improve business performance, it is becoming an old differentiator and is waning in importance. The diminishing importance of CMMI is increasingly being driven by the inability of most level 5 organizations to leverage their skills towards actually benefiting their end clients. This is in spite of the testimonials of other level 5 organizations such as Accenture and IBM Global Services. Most software development projects are typically performed at Level 3. And even at Level 3, most IT organization projects stumble and face difficult challenges and therefore do not see the value (and the added cost premium) of working with vendors with Level 4 and Level 5 characteristics.

XMG predicts that emerging as new vendor differentiators to offset the losing luster of CMMi are: (1) the availability of vendor-neutral external audit services to assess quality on the client’s projects; (2) proven methodology for quality; and, (3) business domain knowledge. Bottom-line CMMi (at level 3) represents a great step toward more effective process programs that will advance the organization further. However, clients will continue to experience growing pains and lag behind in aligning themselves to the discipline of maturity-based process programs such as CMMi. As a result, clients will move towards a new vendor differentiator that emphasizes quality, methodology and business expertise rather than process development. It is advisable, therefore, for software service vendors to temper their expectations from CMMi and focus on obtaining the minimum maturity requirements suitable to meeting end clients at their level of capability.

By Lauro Vives
for Asia Quality Magazine