Tuesday, July 27, 2010

Software Project Management- Estimation and ISO

1)Bring out the importance of software project estimation in the context of software project management.
Estimation is the basis of project planning because it establishes feasible targets for the cost and the schedule. The projects that are planned and executed based on unrealistic deadlines lead to poor quality and overshooting of budgets and schedules. In order to achieve the planned targets, the estimates may need to be revisited during project execution, to take into account the altered situation and revised assumptions.
For reliable estimation, the scope of the product should be well defined. If the product scope is ambiguous, the estimation may be inaccurate, leading to unrealistic targets. For the product scope to be unambiguous, the statement of scope should be bounded, that is, it should clearly state the quantitative data, the constraints, and the mitigating factors related to the product.
The initial estimation for a project is based on the functional decomposition of the product, which is derived from the bounded statement of scope. Grammatical parse is a simple technique used for performing functional decomposition when given the bounded statement of product scope.
Estimation is necessary for project planning and target setting. However, uncertainty is inherent in any estimate; therefore, multiple methods are used to derive multiple estimates, which are then reconciled. These methods fall under two broad approaches—empirical model approach and decomposition-based approach.
In the empirical model approach, the relationship between size, effort, and project duration is used, in which the size is taken as an input to obtain the overall effort and duration of the project. In the decomposition-based approach, the project is decomposed into smaller work components. Each work component is individually estimated using historical data. The estimates of the work components are then added to obtain the total estimate for the project
1. Do you agree with the statement that an easy and useful way to estimate software efforts and costs is to estimate the lines of code of the software?
The Estimating Life Cycle

Figure 1. Cost Estimate Accuracy by Development Stage

Early uncertainty in cost estimates is due to variances in the input parameters to the estimate. Later uncertainty can be traced back to variances in the estimating models. While at the concept stage, when requirements may be hazy, the general purpose of the new software should be clear. At this point, estimates using informal techniques such as historical comparisons or group consensus should have an accuracy of plus or minus 50 percent. By the time the detailed design is complete, an implementation-oriented estimate will be accurate within plus or minus 10 percent.
Estimating Program Volume
The first step in preparing an estimate is to characterize the project volume. One measure is the number of source lines of code, or SLOC. A SLOC is a human written line of code that is not a blank line or comment. Do not count the same line more than once, even if the code appears several times in an application. We typically work with a related number, thousands of SLOC, or KSLOC, when estimating. SLOC as an estimating metric was popularized by Barry Boehm’s Constructive Cost Model, or COCOMO, model remain the most common estimating approach.
If you know the number of KSLOC your developers must write, and you know the effort required per KSLOC, then you could multiply these two numbers together to arrive at the person months of effort required for your project. This concept is at the heart of all of the estimating models. Table 1 shows some common values that researchers have found for this linear productivity factor. Note that although language affects productivity in terms of functionality per hour, effort measured in terms of effort per line of code is language-independent.
Table 1. Common Values for the Linear Productivity Factor
Project Type Linear Productivity Factor
COCOMO II Default 2.94
Embedded Development 2.58
E-commerce Development 3.60
Web Development 3.30
Military Development 2.77
If you know how many thousands of lines of code (KSLOC) your developers must write and you know the effort required per KSLOC, you can multiply these two numbers together to arrive at the person months of effort required for your project. This concept is at the heart of all of the estimating models.
Suppose we were going to build an e-commerce system consisting of 15,000 lines of code. How many person months of effort would this take using just this equation?
The answer is computed as follows:
If all of your projects are small, then you can use this basic equation. Researchers have found, however, that productivity does vary with project size. In fact, large projects are significantly less productive than small projects—probably because they require increased coordination and communication time, plus more rework due to misunderstandings.
Table 2. Typical Size Penalty Factors for Various Project Types
Project Type Exponential Size Penalty Factor
COCOMO II Default 1.052
Embedded development 1.110
E-Commerce development 1.030
Web development 1.030
Military development 1.072
Productivity does vary with project size. In fact, large projects are significantly less productive than small projects—probably because they require increased coordination and communication time, plus more rework due to misunderstandings. The exponential factors above penalize large projects for decreased efficiency.
This productivity decrease with increasing project size is factored in by raising the number of KSLOC to a number greater than 1.0. This exponential factor then penalizes large projects for decreased efficiency. Table 2 shows some typical size penalty factors for various project types.
So, after we do a size penalty adjustment, how many person months of effort would our 15,000 lines of code e-commerce system require? The answer is computed as follows:
All of this is pretty straightforward. The next logical question is, "How do I know my project will end up as 15,000 SLOC?"
There are two main approaches to answering this question: direct estimation and function points with backfiring. Using either approach, the fundamental input variables are determined through expert opinion, often with your developers as the experts.
Normally, the first step in estimating the number of lines of code is to break the project down into modules or some other logical grouping. For example, a very high level breakdown might be front-end processes, middle-tier processes and database code. Your developers then use their experience building similar systems to estimate the number of lines of code required.
We strongly recommend that you obtain three estimates for each input variable: a best case estimate, a worst case estimate and an expected case estimate. With these three inputs, you can then calculate the mean and standard deviation as

The standard deviation is a measure of how much deviation can be expected in the final number. For example, the mean plus three times the standard deviation will ensure that there is a 99 percent probability that your project will come in under your estimate.
2. Discuss the strengths and weaknesses of the main classes of cost estimation models for procedure-oriented software systems. Explain one such method in detail.
3. Describe the attributes of an Object Oriented software develop process. Can the size estimation method described by you above, be Used for such systems? Justify your answer.
4. Suppose that as the project manager you estimate the effort required to develop a software product to be 50 person-months. Can you develop this product by employing: (i) 50 persons for one month (ii) one person for 50 months? Justify your answer in each case.
7. What are the factors influencing the cost estimation of a software product
What is an estimate?

An estimate is the most knowledgeable statement you can make at a particular point in time regarding:
• Ø Effort
• Ø Cost
• Ø scheduling
• Ø staffing
• Ø risk
Software cost estimation
Software cost estimation refers to:
Predicting the resources required for a software development process. It includes an approximate judgment of the cost for a project involving many variables. Often measured in terms of effort (person months or man months).
Software cost estimation is important because without it:
• Software analyst /system engineer cannot make realistic hardware-software tradeoff analysis
• Project managers do not have a clue what is going on, how much effort is required to complete an activity, how much calendar time needed, and what is the total cost of an activity.
It is measured on two bases:
Size-related measures based on some output from the software process.
Function-related measures based on an estimate of the functionality of the delivered software.
Staffing level estimation
Once the effort required to develop a software has been determined, it is necessary to determine the staffing requirement for the project. Putnam first studied the problem of what should be a proper staffing pattern for software projects. He extended the work of Norden who had earlier investigated the staffing pattern of research and development (R&D) type of projects. In order to appreciate the staffing pattern of software projects, Norden’s and Putnam’s results must be understood.

Norden’s Work
Norden studied the staffing patterns of several R & D projects. He found that the staffing pattern can be approximated by the Rayleigh distribution curve (as shown in fig. 11.6). Norden represented the Rayleigh curve by the following equation:

E = K/t²d * t * e-t² / 2 t²d

Where E is the effort required at time t. E is an indication of the number of engineers (or the staffing level) at any particular time during the duration of the project, K is the area under the curve, and td is the time at which the curve attains its maximum value. It must be remembered that the results of Norden are applicable to general R & D projects and were not meant to model the staffing pattern of software development projects.
Putnam’s Work

Putnam studied the problem of staffing of software projects and found that the software development has characteristics very similar to other R & D projects studied by Norden and that the Rayleigh-Norden curve can be used to relate the number of delivered lines of code to the effort and the time required to develop the project. By analyzing a large number of army projects, Putnam derived the following expression:

L = Ck K1/3td4/3

The various terms of this expression are as follows:

• K is the total effort expended (in PM) in the product development and L is
the product size in KLOC.
td corresponds to the time of system and integration testing. Therefore, td can be approximately considered as the time required to develop the software.
• Ck is the state of technology constant and reflects constraints that impede the progress of the programmer. Typical values of Ck = 2 for poor development environment (no methodology, poor documentation, and review, etc.), Ck = 8 for good software development environment (software engineering principles are adhered to), Ck = 11 for an excellent environment (in addition to following software engineering principles, automated tools and techniques are used). The exact value of Ck for a
specific project can be computed from the historical data of the organization developing it.
Putnam suggested that optimal staff build-up on a project should follow the Rayleigh curve. Only a small number of engineers are needed at the beginning of a project to carry out planning and specification tasks. As the project progresses and more detailed work is required, the number of engineers reaches a peak. After implementation and unit testing, the number of project staff falls.

However, the staff build-up should not be carried out in large installments. The team size should either be increased or decreased slowly whenever required to match the Rayleigh-Norden curve. Experience shows that a very rapid build up of project staff any time during the project development correlates with schedule slippage.
It should be clear that a constant level of manpower through out the project duration would lead to wastage of effort and increase the time and effort required to develop the product. If a constant number of engineers are used over all the phases of a project, some phases would be overstaffed and the other phases would be understaffed causing inefficient use of manpower, leading to schedule slippage and increase in cost.
Effect of schedule change on cost
By analyzing a large number of army projects, Putnam derived the following expression:

L = CkK1/3td4/3
Where, K is the total effort expended (in PM) in the product development and L is the product size in KLOC, td corresponds to the time of system and integration testing and Ck is the state of technology constant and reflects constraints that impede the progress of the programmer

Now by using the above expression it is obtained that,

K = L3/Ck3t d4
K = C/td4

For the same product size, C = L3 / Ck 3 is a constant.

4 4
or, K1/K 2= td2 /t d1
or, K ∝ 1/td4
or, cost ∝ 1/td
(as project development effort is equally proportional to project development cost)

From the above expression, it can be easily observed that when the schedule of a project is compressed, the required development effort as well as project development cost increases in proportion to the fourth power of the degree of compression. It means that a relatively small compression in delivery schedule can result in substantial penalty of human effort as well as development cost. For example, if the estimated development time is 1 year, then in order to develop the product in 6 months, the total effort required to develop the product (and hence the project cost) increases 16 times.
Project scheduling
Project-task scheduling is an important project planning activity. It involves deciding which tasks would be taken up when. In order to schedule the project activities, a software project manager needs to do the following:
1. Identify all the tasks needed to complete the project.
2. Break down large tasks into small activities.
3. Determine the dependency among different activities.
4. Establish the most likely estimates for the time durations necessary to complete the activities.
5. Allocate resources to activities.
6. Plan the starting and ending dates for various activities.
7. Determine the critical path. A critical path is the chain of activities that determines the duration of the project.
The first step in scheduling a software project involves identifying all the tasks necessary to complete the project. A good knowledge of the intricacies of the project and the development process helps the managers to effectively identify the important tasks of the project. Next, the large
kdown the tasks
After the project manager has broken down the tasks and created the work breakdown structure, he has to find the dependency among the activities. Dependency among the different activities determines the order in which the different activities would be carried out. If an activity A requires the results of another activity B, then activity A must be scheduled after activity B. In general, the task dependencies define a partial ordering among tasks, i.e. each tasks may precede a subset of other tasks, but some tasks might not have any precedence ordering defined between them (called concurrent task). The dependency among the activities are represented in the form of an activity network.

Once the activity network representation has been worked out, resources are allocated to each activity. Resource allocation is typically done using a Gantt chart. After resource allocation is done, a PERT chart representation is developed. The PERT chart representation is suitable for program monitoring and control. For task scheduling, the project manager needs to decompose the project tasks into a set of activities. The time frame when each activity is to be
performed is to be determined. The end of each activity is called milestone. The project manager tracks the progress of a project by monitoring the timely completion of the milestones. If he observes that the milestones start getting delayed, then he has to carefully control the activities, so that the overall deadline can still be met.
Work breakdown structure
Work Breakdown Structure (WBS) is used to decompose a given task set recursively into small activities. WBS provides a notation for representing the major tasks need to be carried out in order to solve a problem. The root of the tree is labeled by the problem name. Each node of the tree is broken down into smaller activities that are made the children of the node. Each activity is recursively decomposed into smaller sub-activities until at the leaf level, the activities requires approximately two weeks to develop. Fig. 11.7 represents the WBS of an MIS (Management Information System) software.
While breaking down a task into smaller tasks, the manager has to make some hard decisions. If a task is broken down into large number of very small activities, these can be carried out independently. Thus, it becomes possible to develop the product faster (with the help of additional manpower). Therefore, to be able to complete a project in the least amount of time, the manager needs to break large tasks into smaller ones, expecting to find more
parallelism. However, it is not useful to subdivide tasks into units which take less than a week or two to execute. Very fine subdivision means that a disproportionate amount of time must be spent on preparing and revising various charts.
ig. 11.7: Work breakdown structure of an MIS problem Activity networks and critical path method
WBS representation of a project is transformed into an activity network by representing activities identified in WBS along with their interdependencies. An activity network shows the different activities making up a project, their estimated durations, and interdependencies (as shown in fig. 11.8). Each activity is represented by a rectangular node and the duration of the activity is shown alongside each task.
Managers can estimate the time durations for the different tasks in several ways. One possibility is that they can empirically assign durations to different tasks. This however is not a good idea, because software engineers often resent such unilateral decisions. A possible alternative is to let engineer himself estimate the time for an activity he can assigned to. However, some managers prefer to estimate the time for various activities themselves. Many managers believe that an aggressive schedule motivates the engineers to do a better and faster job. However, careful experiments have shown that unrealistically aggressive schedules not only cause engineers to compromise on intangible quality aspects, but also are a cause for schedule delays. A good way to achieve accurately in estimation of the task durations without creating undue schedule pressures is to have people set their own schedules.
Design Code Database
Database Part Part 105
Design GUI Code GUI Part
Part 45
Write User

Integrate and
Finish 0
Fig. 11.8: Activity network representation of the MIS problem

Critical Path Method (CPM)
From the activity network representation following analysis can be made. The minimum time (MT) to complete the project is the maximum of all paths from start to finish. The earliest start (ES) time of a task is the maximum of all paths from the start to the task. The latest start time is the difference between MT and the maximum of all paths from this task to the finish. The earliest finish time (EF) of a task is the sum of the earliest start time of the task and the duration of the task. The latest finish (LF) time of a task can be obtained by subtracting maximum of all paths from this task to finish from MT. The slack time (ST) is LS - EF and equivalently can be written as LF - EF. The slack time (or float time) is the total time that a task may be delayed before it will affect the end time of the project. The slack time indicates the “flexibility” in starting and completion of tasks. A critical task is one with a zero slack time. A path from the start node to the finish node containing only critical tasks is called a critical path. These parameters for different tasks for the MIS problem are shown in the following table.
Specification 0 15 0 15 0
Design database 15 60 15 60 0
Design GUI part 15 45 90 120 75
Code database 60 165 60 165 0
Code GUI part 45 90 120 165 75
Integrate and test 165 285 165 285 0
Write user manual 15 75 225 285 210

The critical paths are all the paths whose duration equals MT. The critical path in fig. 11.8 is shown with a blue arrow.
Gantt chart
Gantt charts are mainly used to allocate resources to activities. The resources allocated to activities include staff, hardware, and software. Gantt charts (named after its developer Henry Gantt) are useful for resource planning. A Gantt chart is a special type of bar chart where each bar represents an activity. The bars are drawn along a time line. The length of each bar is proportional to the duration of time planned for the corresponding activity.

Gantt charts are used in software project management are actually an enhanced version of the standard Gantt charts. In the Gantt charts used for software project management, each bar consists of a white part and a shaded part. The shaded part of the bar shows the length of time each task is estimated
to take. The white part shows the slack time, that is, the latest time by which a task must be finished. A Gantt chart representation for the MIS problem of fig. 11.8 is shown in the fig. 11.9.
Fig. 11.9: Gantt chart representation of the MIS problem
PERT chart
PERT (Project Evaluation and Review Technique) charts consist of a network of boxes and arrows. The boxes represent activities and the arrows represent task dependencies. PERT chart represents the statistical variations in the project estimates assuming a normal distribution. Thus, in a PERT chart instead of making a single estimate for each task, pessimistic, likely, and optimistic
estimates are made. The boxes of PERT charts are usually annotated with the pessimistic, likely, and optimistic estimates for every task. Since all possible completion times between the minimum and maximum duration for every task has to be considered, there are not one but many critical paths, depending on the permutations of the estimates for each task. This makes critical path analysis in PERT charts very complex. A critical path in a PERT chart is shown by using thicker arrows. The PERT chart representation of the MIS problem of fig. 11.8 is shown in fig. 11.10. PERT charts are a more sophisticated form of activity chart.
In activity diagrams only the estimated task durations are represented. Since, the actual durations might vary from the estimated durations, the utility of the activity diagrams are limited.

Gantt chart representation of a project schedule is helpful in planning the utilization of resources, while PERT chart is useful for monitoring the timely progress of activities. Also, it is easier to identify parallel activities in a project using a PERT chart. Project managers need to identify the parallel activities in a project for assignment to different engineers. )

13) You have estimated the nominal development time of a moderate-sized software product to be 10 months. You have also estimated that it will cost Rs.500,000/- to develop the software product. Now, the customer comes and tells you that he wants you to accelerate the delivery lime by 10%. How much additional cost would you charge the customer for this accelerated delivery? ? Irrespective of whether you take less time or more time to develop the product, you are essentially developing the same product. Why then does the effort depend on the duration over which you develop the product?

14) Explain the ISO 9000 registration process and accredition system. Do you think there are any shortcomings of the current accredition system that needs to be addressed?
15) List five salient requirements that a software development organization must comply with before it can be awarded the ISO 9001 certificate. What are some of the shortcomings of the ISO certification process?
SEI Capability Maturity Model

SEI Capability Maturity Model (SEI CMM) helped organizations to improve the quality of the software they develop and therefore adoption of SEI CMM model has significant business benefits.
SEI CMM can be used two ways: capability evaluation and software process assessment. Capability evaluation and software process assessment differ in motivation, objective, and the final use of the result. Capability evaluation provides a way to assess the software process capability of an organization. The results of capability evaluation indicates the likely contractor performance if the contractor is awarded a work. Therefore, the results of software process capability assessment can be used to select a contractor. On the other hand, software process assessment is used by an organization with the objective to improve its process capability. Thus, this type of assessment is for purely internal use.
SEI CMM classifies software development industries into the following five maturity levels. The different levels of SEI CMM have been designed so that it is easy for an organization to slowly build its quality system starting from scratch.
Level 1: Initial. A software development organization at this level is characterized by ad hoc activities. Very few or no processes are defined and followed. Since software production processes are not defined, different engineers follow their own process and as a result development efforts become chaotic. Therefore, it is also called chaotic level. The success of projects depends on individual efforts and heroics. When engineers leave, the successors have great difficulty in understanding the process followed and the work completed. Since formal project management practices are not followed, under time pressure short cuts are tried out leading to low quality.
Level 2: Repeatable. At this level, the basic project management practices such as tracking cost and schedule are established. Size and cost estimation techniques like function point analysis, COCOMO, etc. are used. The necessary process discipline is in place to repeat earlier success on projects with similar applications. Please remember that opportunity to repeat a process exists only when a company produces a family of products.
Level 3: Defined. At this level the processes for both management and development activities are defined and documented. There is a common organization-wide understanding of activities, roles, and responsibilities. The processes though defined, the process and product qualities are not measured. ISO 9000 aims at achieving this level.
Level 4: Managed. At this level, the focus is on software metrics. Two types of metrics are collected. Product metrics measure the characteristics of the product being developed, such as its size, reliability, time complexity, understandability, etc. Process metrics reflect the effectiveness of the process being used, such as average defect correction time, productivity, average number of defects found per hour inspection, average number of failures detected during testing per LOC, etc. Quantitative quality goals are set for the products. The software process and product quality are measured and quantitative quality requirements for the product are met. Various tools like Pareto charts, fishbone diagrams, etc. are used to measure the product and process quality. The process metrics are used to check if a project performed satisfactorily. Thus, the results of process measurements are used to evaluate project performance rather than improve the process.
Level 5: Optimizing. At this stage, process and product metrics are collected. Process and product measurement data are analyzed for continuous process improvement. For example, if from an analysis of the process measurement results, it was found that the code reviews were not very effective and a large number of errors were detected only during the unit testing, then the process may be fine tuned to make the review more effective. Also, the lessons learned from specific projects are incorporated in to the process. Continuous process improvement is achieved both by carefully analyzing the quantitative feedback from the process measurements and also from application of innovative ideas and technologies. Such an organization identifies the best software engineering practices and innovations which may be tools, methods, or processes. These best practices are transferred throughout the organization.
What is ISO 9000?
Quality is something every company strives for and is often times very difficult to achieve. Complications concerning efficiency and quality present themselves everyday in business, whether an important document cannot be found or a consumer finds a product not up to their expectations. How can a company increase the quality of its products and services? The answer is ISO 9000.
As standards go, ISO 9000 is one of the most widely recognized in the world. ISO 9000 is a quality management standard that presents guidelines intended to increase business efficiency and customer satisfaction. The goal of ISO 9000 is to embed a quality management system within an organization, increasing productivity, reducing unnecessary costs, and ensuring quality of processes and products.
ISO 9001:2008 is applicable to businesses and organizations from every sector. The process oriented approach makes the standard applicable to service organizations as well. Its general guidelines allow for the flexibility needed for today's diverse business world.
How does ISO 9000 work?
ISO 9000 is set up as a collection of guidelines that help a company establish, maintain, and improve a quality management system. It is important to stress that ISO 9000 is not a rigid set of requirements, and that organizations have flexibility in how they implement their quality management system. This freedom allows the ISO 9000 standard to be used in a wide range of organizations, and in businesses large and small.
One important aspect of ISO 9000 is its process-oriented approach. Instead of looking at a company's departments and individual processes, ISO 9000 requires that a company look at "the big picture." How do processes interact? Can they be integrated with one another? What are the important aspects of products and services?
Once this process-oriented approach is implemented, various audits can be done as a check of the effectiveness of your quality management system. There are three main types of audits – 1st, 2nd, and 3rd party audits. An internal audit is a 1st party audit. ISO 9000 encourages (and requires) this type of audit so that an organization can get feedback quickly from those who know the company best. However, this audit process cannot be viewed as impartial. Therefore, 2nd party audits allow for a consumer to evaluate the performance on an organization. As an alternative to a 2nd party audit, many companies choose to become certified with ISO 9000 through a 3rd party audit. In this case, an independent certification body comes into an organization and evaluates it in terms of the ISO 9000 guidelines. If an organization meets the requirements of the standard, it becomes certified in ISO 9000 and carries a seal of quality recognized throughout the world.
Why is ISO 9000 important?
The importance of ISO 9000 is the importance of quality. Many companies offer products and services, but it is those companies who put out the best products and services efficiently that succeed. With ISO 9000, an organization can identify the root of the problem, and therefore find a solution. By improving efficiency, profit can be maximized.
As a broad range of companies implement the ISO 9000 standards, a supply chain with integrity is created. Each company that participates in the process of developing, manufacturing, and marketing a product knows that it is part of internationally known, reliable system.
Not only do businesses recognize the importance of the ISO 9000, but also the customer realizes the importance of quality. And because the consumer is most important to a company, ISO 9000 makes the customer its focus.
What are the ISO 9000 Principles?
1. A Customer Focus

As stated before, the customer is the primary focus of a business. By understanding and responding to the needs of customers, an organization can correctly targeting key demographics and therefore increase revenue by delivering the products and services that the customer is looking for. With knowledge of customer needs, resources can be allocated appropriately and efficiently. Most importantly, a business's dedication will be recognized by the customer, creating customer loyalty. And customer loyalty is return business.
2. Good Leadership

A team of good leaders will establish unity and direction quickly in a business environment. Their goal is to motivate everyone working on the project, and successful leaders will minimize miscommunication within and between departments. Their role is intimately intertwined with the next ISO 9000 principle.
3. Involvement of people

The inclusion of everyone on a business team is critical to its success. Involvement of substance will lead to a personal investment in a project and in turn create motivated, committed workers. These people will tend towards innovation and creativity, and utilize their full abilities to complete a project. If people have a vested interest in performance, they will be eager to participate in the continual improvement that ISO 900 facilitates.
4. Process approach to quality management

The best results are achieved when activities and resources are managed together. This process approach to quality management can lower costs through the effective use of resources, personnel, and time. If a process is controlled as a whole, management can focus on goals that are important to the big picture, and prioritize objectives to maximize effectiveness.
5. Management system approach

Combining management groups may seem like a dangerous clash of titans, but if done correctly can result in an efficient and effective management system. If leaders are dedicated to the goals of an organization, they will aid each other to achieve improved productivity. Some results include integration and alignment of key processes. Additionally, interested parties will recognize the consistency, effectiveness, and efficiency that come with a management system. Both suppliers and customers will gain confidence in a business's abilities.
6. Continual Improvement

The importance of this principle is paramount, and should a permanent objective of every organization. Through increased performance, a company can increase profits and gain an advantage over competitors. If a whole business is dedicated to continual improvement, improvement activities will be aligned, leading to faster and more efficient development.
Ready for improvement and change, businesses will have the flexibility to react quickly to new opportunities.
7. Factual approach to decision making

Effective decisions are based on the analysis and interpretation of information and data. By making informed decisions, an organization will be more likely to make the right decision. As companies make this a habit, they will be able to demonstrate the effectiveness of past decisions. This will put confidence in current and future decisions.
8. Supplier relationships

It is important to establish a mutually beneficial supplier relationship; such a relationship creates value for both parties. A supplier that recognizes a mutually beneficial relationship will be quick to react when a business needs to respond to customer needs or market changes. Through close contact and interaction with a supplier, both organizations will be able to optimize resources and costs.
Why is root cause analysis and systemic corrective action so important in management system standards, such as ISO 9001?
When problem solving, it is important to find the cause of problem in order to develop a solution. Sometimes, the most obvious cause is not the right one. This is why ISO 9000 stresses the importance of finding the root cause(s) of a problem. There may be multiple, subtle reasons why a process isn't working correctly, and finding the actual causes will lead a company one step closer to a solution and implementation of corrective actions.
The goal of finding root causes is to improve the way problems are managed. Becoming adept in recognizing the root causes of a problem will lead to a reduced impact, a containment of error, and the prevention of recurrence. Identifying and correcting root causes will also lead to the reduction of unnecessary efforts which in turn will lower the cost of maintaining quality. As more and more corrective actions are taken, processes will become more stable, and continual improvement will face less interruptions.
How does ISO 9000 interact with other standards?

ISO 9000 is the standard for a quality management system that closely resembles many other management systems. These other systems, based on health, safety, the environment, and business continuity, can be integrated into an overarching business management system. Benefits of this system include aligned interests, reduced costs, and improved efficiency. With one of these systems in place, it is easier to implement any of the others; many documents required for a different standard are already prepared, and personnel are already accustomed to the audit process. Using multiple standards will not only increase the efficiency of an organization, but increase the integrity of its operations.
What does ISO 9000 mean to me and my company?
ISO 9000 is a standard created to make the attainment of quality, consistent products easier by providing specific steps for development of an organization's quality management system. This quality management system is meant to monitor the progress of a product or service as it goes through each stage of production, from development to testing to assembly to customer feedback.
One cornerstone of ISO 9000 is continual improvement. No company should ever be satisfied with the conditions of a process at the given moment; they should always be looking for ways to make these processes more efficient and effective. ISO 9000 was written with the business world's insatiable desire for excellence in mind. This is why continual improvement is a requirement of the standard – to inspire progress and the pursuit of perfection.
ISO 9000 is an internationally recognized standard, and that may seem daunting for some smaller businesses. How are they going to implement the same standard adopted by multi-national corporations? Quite easily, actually. ISO 9000 is a flexible standard that lays down requirements for an organization to follow, but allows the organization to fulfill these requirements any way they choose. This increases ISO 9000's scope of effectiveness, allowing a wide range of companies to create quality management systems that match their needs.
ISO 9000 is seen in every sector of the business world, and its success is a testament to its worth. With a focus on customer satisfaction, products and services improve and flourish under ISO 9000's quality management system. With a combination of continual improvement and corrective actions – tenets of ISO 9000 – a business will create processes that run smoothly and efficiently.
How will ISO 9000 benefit my small business?
A good foundation builds a good business, and ISO 9000 is a good foundation for small businesses that want to expand their market. By introducing a quality management system like ISO 9000 to a small business, the quality of processes will increase and costs due to inefficiency will decrease. In addition, a small business will be able to advertise their use of the internationally recognized ISO 9000. This may create business opportunities that were not available before an objectively verified quality management system was in place.
Having management systems in place, such as ISO 9000, will also help when selling a business. The integrity and value of a small business will be apparent with well-documented processes and proof of quality. ISO 9000 will ensure the reputation of your business in any situation.

16) What go you understand by total quality management (TQM)? What are the advantages of TQM? Does ISO 9000 standard aim for TQM?
The basic principles for the Total Quality Management (TQM) philosophy of doing business are to satisfy the customer, satisfy the supplier, and continuously improve the business processes.
Questions you may have include:
• How do you satisfy the customer?
• Why should you satisfy the supplier?
• What is continuous improvement?
This lesson will answer those questions. There is a mini-quiz near the end of the lesson.
Satisfy the customer
The first and major TQM principle is to satisfy the customer--the person who pays for the product or service. Customers want to get their money's worth from a product or service they purchase.
If the user of the product is different than the purchaser, then both the user and customer must be satisfied, although the person who pays gets priority.
Company philosophy
A company that seeks to satisfy the customer by providing them value for what they buy and the quality they expect will get more repeat business, referral business, and reduced complaints and service expenses.
Some top companies not only provide quality products, but they also give extra service to make their customers feel important and valued.
Internal customers
Within a company, a worker provides a product or service to his or her supervisors. If the person has any influence on the wages the worker receives, that person can be thought of as an internal customer. A worker should have the mind-set of satisfying internal customers in order to keep his or her job and to get a raise or promotion.
Chain of customers
Often in a company, there is a chain of customers, -each improving a product and passing it along until it is finally sold to the external customer. Each worker must not only seek to satisfy the immediate internal customer, but he or she must look up the chain to try to satisfy the ultimate customer.
Satisfy the supplier
A second TQM principle is to satisfy the supplier, which is the person or organization from whom you are purchasing goods or services.
External suppliers
A company must look to satisfy their external suppliers by providing them with clear instructions and requirements and then paying them fairly and on time.
It is only in the company's best interest that its suppliers provide it with quality goods or services, if the company hopes to provide quality goods or services to its external customers.
Internal suppliers
A supervisor must try to keep his or her workers happy and productive by providing good task instructions, the tools they need to do their job and good working conditions. The supervisor must also reward the workers with praise and good pay.
Get better work
The reason to do this is to get more productivity out of the workers, as well as to keep the good workers. An effective supervisor with a good team of workers will certainly satisfy his or her internal customers.
Empower workers
One area of satisfying the internal suppler is by empowering the workers. This means to allow them to make decisions on things that they can control. This not only takes the burden off the supervisor, but it also motivates these internal suppliers to do better work.
Continuous improvement
The third principle of TQM is continuous improvement. You can never be satisfied with the method used, because there always can be improvements. Certainly, the competition is improving, so it is very necessary to strive to keep ahead of the game.
Working smarter, not harder
Some companies have tried to improve by making employees work harder. This may be counter-productive, especially if the process itself is flawed. For example, trying to increase worker output on a defective machine may result in more defective parts.
Examining the source of problems and delays and then improving them is what is needed. Often the process has bottlenecks that are the real cause of the problem. These must be removed.
Worker suggestions
Workers are often a source of continuous improvements. They can provide suggestions on how to improve a process and eliminate waste or unnecessary work.
Quality methods
There are also many quality methods, such as just-in-time production, variability reduction, and poka-yoke that can improve processes and reduce waste.
The principles of Total Quality Management are to seek to satisfy the external customer with quality goods and services, as well as your company internal customers; to satisfy your external and internal suppliers; and to continuously improve processes by working smarter and using special quality methods.
Total Quality Management (TQM) is a management style that implies non-stop process of quality improvement of products, processes and
personnel work. This is a bunch of methodologies that drive company to strategic goals achievement through unceasing quality
development. It is focused on production of goods and services that possess high-quality from viewpoint of customers. TQM was
elaborated on basis of Edward Deming's theory. This philosophy has successfully started many years ago in Japan and USA . TQM has
shown phenomenal results and now it is used in many successful enterprises all across the world. It allows obtaining faster, fundamental
and more efficient business development, because it stimulates production of much better products for better prices.
There are 5 "sicknesses" or mistakes that should be driven out of organization for successful implementation of TQM. If these "sicknesses"
are not eliminated, they can entail failure of TQM and gradually destroy a company. Here are these "sicknesses":
Management of only basic line. Organization that takes care only about basic line of development and manages only numeric
results is doomed to failure. Management is a hard work and manager that works only with numbers lightens his/her task. Actually
manager should know all process workflow and being involved into the process, understand what can be the source of problems
and be an example for subordinates.
Evaluating of activity with a help of quantitative rates system . Evaluating of activity with a help of quantitative rates system.
Evaluating that uses system of quantitative rates, reports, annual reviews of attainments, etc. can cause forced quotes,
classification and ratings that entail unhealthy competition, break of team collaboration within company. Instead of such systems
managers should personally comment employees' work, advice and help to improve it.
Stress on receiving of short-term benefits. If employees have experience of getting fast profits they will try to work in the same
way. Management should convince workers that it is better to prefer long-term and stable growth and improvement than quick,
short-term profits.
Lack of strategy. If there is no any sequence of realizing goals in a company, employees will feel uncertainty about possibility of
constant professional and carrier growth. Organization should have continuously realizing strategic plan where considerable part
should be devoted to questions of quality improvement.
Staff turnover. If high staff turnover within organization is apparent, this indicates serious problems. Eliminating of previous four
sicknesses will help to solve this one. Management should assume the proper arrangement to make employee feel as an
important part of one consolidated team.
Advantages of TQM:
TQM gives some short-term advantages, however majority of advantages is long-termed, and tangible benefits from them appear only after successful realization. In big organizations this process can take few years. Long-term benefits expected from implementation of TQM - higher productivity, higher moral tonus of personnel, decreasing of costs and increasing of consumers' trust.
This will make company popular and increase its status within society. Avoidance of mistakes allows company to save money
and time. Extra resources can be used for range of products and services expansion or for other improvements. TQM creates
atmosphere of enthusiasm and satisfaction with performed job and welcomes awarding bonuses for creative approach to
professional duties.
TQM intensively uses team style of work that allows employees share their experience, use their skills effectively and apply joint efforts for solving issues. As far as team members gain experience of team problem solving they can be a part of cross-department "mega teams" that work at tasks that are beyond of local group possibilities. TQM gives to organization more flexibility in work and problem solving and improve work environment for each employee.
As we can see team collaboration is an important part of TQM philosophy. In order to be efficient each team should be managed properly. For this purpose special software can be used.


  1. Hi

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