Tag Archives: process improvement

Book Review – “Service Management” by James Fitzsimmons and Mona Fitzsimmons

In the early days of CMMI® – SVC, around 4 years ago, I purchased this book on the recommendation of my colleague Chinmay Pradhan . The money and time spent with this book have been rewarding. I now strongly recommend it to anyone who asks me for a book to understand the services context for implementation of CMMI® for Services.

Some relevant information about the book:

  • The book is designed as a comprehensive standard text for management students in service oriented industries.
  • It has been used as reference book for many years – the first edition is dated 1994. The book has been updated frequently and has survived almost 2 decades.
  • The book (5th Edition) has 3 parts and 17 Chapters.
  • The Chapters on “The Nature of Services” and “Service Strategy” (in Part 1) are especially useful to structure your approach to a service oriented organization.
  • There are interesting Chapters (in Part 2) dedicated to development of new services, service quality, and continuous improvement.
  • Part 3 titled Managing Service Operations has a lot of material devoted to demand forecasting, capacity management, managing queues, and service supply relationship – this section is useful for approaching the high maturity practices of the CMMI®.
  • Concepts are supported with diagrams, tables, examples and case studies from a wide range of service industries. The range is so vast that based on reading the book, it is easy to extend the concepts to a completely new service industry/ organization.
  • Each chapter ends with questions for the readers to work on (and consolidate their understanding of the concepts).
  • The book may not be suitable in a Kindle version (I think the big illustrations and tables in the book are not suitable currently for the Kindle format).
  • The print version (5th Edition) that I have is close to 600 pages – just slightly smaller than the A4 size – so it is pretty big to carry around.

I recommend this book very strongly to:

  • Consultants, trainers, auditors and appraisers working with CMMI® for Services (CMMI® – SVC)
  • Process improvement professionals in any service oriented organization, especially those supporting the implementation of CMMI® for Services (CMMI® – SVC)
  • Executive management of service oriented organizations

If you belong to one the above category of folks, in addition to reading the book, you will find it useful to have a copy for reference on a more constant basis.
The book has multiple editions (the 8th edition seems to be the latest) and multiple versions/ configurations (hardcover/paperback, with student CD/ without student CD) – the price varies significantly based on the edition, versions and configurations. My review is based on a paperback copy of the 5th edition, without the student CD. If you are planning to purchase a copy, keep in mind that the price is dependent on some of the factors just discussed.

About the authors

James A Fitzsimmons is a BSE in industrial engineering (Univ of Michigan), an MBA (Western Michigan Univ) and a PhD (UCLA). He has consulted several organizations, including large government bodies. He has edited and co-authored many books and journals.

Mona J Fitzsimmons is a graduate from the University of Michigan, did her graduate work in geology. She has been a teacher and an author. Her activities/ interests include wildlife rehabilitation, environmental issues and health care.

Here are some details, if you want to get a copy of the book:

Service Management Book Cover
Title: Service Management: Operations, Strategy, Information Technology

Author: James A Fitzimmons and Mona J Fitzsimmons

Publishing Date: Initially around 1994, Currently 8th Edition

Publisher: McGraw-Hill

Available at: Amazon.com, Amazon.in, and Flipkart

Other book reviews uploaded on the same blog:

Please feel feel to share your views, experiences or queries, using the “comments” feature available.

Notes:

Nothing Official About It! – The views presented above are in no manner reflective of the official views of any organization, community, group, institute, or association. They may not even be the official views of the author of this post :-).


I am Rajesh Naik. I am an author, management consultant and trainer, helping IT and other tech companies improve their processes and performance. I also specialize in CMMI® (DEV and SVC), People CMM® and Balanced Scorecard. I am a CMMI Institute certified/ authorized Instructor and Lead Appraiser for CMMI® and People CMM®. I am available on LinkedIn and I will be glad to accept your invite. For more information please click here.

Time and Material Business Model is Injurious to Process Improvement

An incident in a large software development organization:

Here is a part of a conversation between a Sig Sigma Expert (SSE) and the Delivery Head (DH) in a software development/ maintenance organization where most projects were run on a T & M or Headcount based billing for their customers.

SSE: “Initial analysis shows that with minor changes in the processes and the use of some spreadsheet macros, we can eliminate some non-value add steps. This can reduce the effort required by 25% for the current mix and volume of work.”

DH: “But that will reduce my head-count and billing by 25%! My target this year for improving efficiency/ productivity is only 5%. Maybe we can implement the changes a bit every year, and not all at once. If I implement all these change right now, I will miss my revenue and headcount targets – these have the highest weight in my performance objectives.”

Another incident in a different organization:

A Project Manager’s project end bonus was slashed because she delivered her project at a much lower cost than what was estimated (the estimate was done by someone else). She was informed that her lower bonus was because the project total billing was much lower than the project estimate.

Both these incidents occured in situations where the projects were being run in a T & M (Time and Material) mode by a software service vendor organization.

The T & M mode of engagement basically shifts the cost related risks and benefits (cost overruns, cost efficiencies) to the customer, while the vendor organization has a steady return, and cannot make large profits or losses. The T & M mode is suitable in many situations – e.g., when requirements are unclear and likely to change, when the customer wants to work closely with the vendor team, when the customer wants more micro control (sometimes interference), or when the customer-vendor organizations are in the initial phase of establishing a relationship. A variation of this is Committed Head Count, where the customer and vendor agree on a fixed number of staff assigned to the customer’s work over a period, independent of the actual quantum of work. Another variation is the dedicated ODC (Offshore Development Center).

As against this, there is the Fixed Price (FP) mode, where the billing amounts and billing timelines are fixed based on an agreed value and agreed deliverables. The FP contract may have penalties and incentives built in (for delivery dates and/or  quality). Effort overruns are the problem of the vendor, and effort savings are additional profits made by the vendor. Variations of the FP model include billing by volume, quality and timeliness of work done. In such cases the vendor is usually free to utilize the staff in an optimal way (maybe on multiple projects).

Many engagements between customers and vendor organizations start off as T & M, for good reasons. However, they continue in the T & M mode, even when the FP mode would serve everyone better. This could be because of inertia, because no one wants to rock the boat, or because no one has examined the issue for that engagement.

Structurally, the T & M model does not create incentives for the vendor to initiate and pursue improvements that will reduce the effort and headcount. The software industry has got addicted to T & M model to such an extent that head count growth, and billable person-days have become stated performance objectives for senior executives in many software services organizations.

Maybe the title of this post should have been “T&M model kills process improvement”, like the changed statutory warnings on tobacco products. Or is that overstating the case?

Please feel free to share your views, experiences or queries, using the “comments” feature available at the top of this article/ post.

Notes:

Nothing Official About It! – The views presented above are in no manner reflective of the official views of any organization, community, group, institute, or association.


I am Rajesh Naik. I am an author, management consultant and trainer, helping IT and other tech companies improve their processes and performance. I also specialize in CMMI® (DEV and SVC), People CMM® and Balanced Scorecard. I am a CMMI Institute certified/ authorized Instructor and Lead Appraiser for CMMI® and People CMM®. I am available on LinkedIn and I will be glad to accept your invite. For more information please click here.