Wednesday, December 28, 2005

Being average is NOT good

Two things I found out the last weeks, have convinced me that being average is NOT a good thing for IT organizations. The first was a good piece of research by CSC, which I found by browsing Christopher Koch's blog of CIO Magazine. The research stated that companies that spend according to the average in their industry are the worst performers. Furthermore, CSC found that companies that spend much less than the average are three times more successful than those in the middle. And companies that spend much more than the average are six times more successful. How about that! I have done some benchmarks, and most of the time our client wanted to be at least average, and the first question that arises when you present the numbers is: "how are we doing compared to the others?".

The second thing I found was the distribution of CMMI certification. The Software Engineering Institute (SEI), inventor and owner of CMMI certification, published figures on appraisal results every 6 months. The september 2005 version provided some interesting and surprising results, as it showed that more than half of organizations that requested appraisal, are level 3 or above. This could suggest that level 3 is average for the industry, but I can guarantee from experience that this is definately not the case, I think the average will be at most level 2. In an earlier post I already wrote that CMMI certification can be approached in different ways, but what the figures show I think, is that organizations that generally already have a more mature process, are more eager to go for formal appraisal, than organzations who are just getting started with their process. Our own figures indicate that the distribution of CMMI levels are:
  • Level 1: 50-60%
  • Level 2: 25-30%
  • Level 3: 10-15%
  • Level 4+: <5%
Earlier I already wrote that measurement data should always be interpreted within the context in which the data was collected. This is especially the case for CMMI certification. But also, the results from the CSC research show that you should never go for average, as first of all the does not make you stand out compared to your peers, and second of all, it may indicate that you are not doing as well as you think you might. So one good plan for 2006: not being average!