The Seapine View

Google the phrase “99.9% is good enough” and see what comes back. For the most part you will uncover the following list:

• $761,900 will be spent in the next 12 months on tapes and compact disks that won’t play.
• 1,314 phone calls will be misplaced by telecommunications services every minute.
• 103,260 income tax returns will be processed incorrectly this year.
• 107 incorrect medical procedures will be performed today.
• 114,500 mismatched pairs of shoes will be shipped this year.
• 12 babies will be given to the wrong parents every day.
• 14,208 defective personal computers will be shipped this year.
• 18,322 pieces of mail will be mishandled in the next hour.
• 2 million documents will be lost by the IRS this year.
• 2 plane landings at Chicago O’Hare will be unsafe.
• 2.5 million books will be shipped in the next 12 months with the wrong cover.
• 20,000 incorrect drug prescriptions will be written in the next 12 months.
• 22,000 checks will be deducted from the wrong bank accounts in the next 60 minutes.
• 268,500 defective tires will be shipped this year.
• 291 pacemaker operations will be performed incorrectly this year.
• 3,056 copies of tomorrow’s Wall Street Journal will be missing one of three sections.
• 5,517,200 cases of soft drinks will be shipped flat this year.
• 880,000 credit cards will be produced with incorrect magnetic strips.

Although these statistics are now dated, the message is still clear. Quality (in fact, zero defects) matters because you may not get a chance to correct the mistake. In some situations and environments you just can’t depend on a mulligan, a do-over, or a re-load.

The concept of quality as it relates to the software industry generally blends three perspectives. First, in many industries software is mission critical; meaning the features must be reliable and always work. For example, a financial services organization is not going to tolerate bugs/defects that result in posting errors. A bank needs to keep their debits and credits in the correct column; it’s just one of those regulatory things! The second perspective that directly impacts the customer experience is technical support. In the case of an issue or problem users can be very unforgiving if prompt attention and follow-up is lacking. The third area involves innovation. Software users expect applications to continuously evolve to meet their ever changing needs and desires. Each perspective is important, and consistent quality practices will help business managers make customer-focused decisions.

I serve as a member of the Advisory Council for CustomerThink.com.  CustomerThink is a global online community of business leaders who strive to create profitable customer-centric (CRM) business strategies.  The July CustomerThink editorial calendar focuses on the use of technology to power up customer management. In fact, the main focus is on how technology can help accelerate the success of customer-centric strategies. Customer feedback is critical to customer-centric strategies; if the truth be known, often times the feedback is not exactly good news. For example, software companies sometimes receive bug reports and feature requests from their customers. Yes, despite their best effort to ensure quality, a glitch in the software application may occur. And despite best efforts to really listen to their target market, there is always room for improvement, meaning feature requests.

Many times customers have to fill out a report form and either fax, mail, or email it to a technical support department where it is then hand-entered into the master bug database. This low-tech procedure provides no support for file attachments (for example – screen shots) and leaves room for communication error. In addition, the customer is not automatically notified that their issue has been added to future projects.

For ISV’s technology opportunities exist that allow for more effective and efficient beta programs and software releases. This technology allows customers to submit bug reports and feature requests directly into the issue management and defect tracking tool thus eliminating data entry errors and also saving data entry time. Are you likely to find these types of solutions under the normal CRM banner? No; but they are intended to keep your customer-focused strategy on track nevertheless.

Recently we released the early results from our Seapine Software Quality-Ready Assessment, a survey that evaluates key indicators of quality within software development organizations. After collecting data from over 300 respondents, the results indicate that the top two factors driving development organizations to focus on ALM solutions are:

• The need to quickly respond to customer requests and requirements
• The need to reduce risk by preventing poor quality from impacting customer satisfaction

Software quality and reliability are lifelines to customer loyalty, and profitability.  Yet development organizations still struggle to achieve quality and deliver their products on time and within budget.  Survey results indicate that more than one third of companies completed their application development on time and within budget less than 75 percent of the time.  The survey also indicates that 70 percent of the companies are undertaking one of following actions to improve the quality of their software development:

• Clearly defining quality metrics
• Undertaking pilot projects or proof-of-concepts pertaining to software development quality
• Seeking executive sponsorship for software development quality improvements

The respondents represent companies of every size. Sixty-nine percent are small companies (less than $250M in revenue), 22 percent are mid-size ($250M – $2.5B), and nine percent are large. The leading industries represented include high tech (32%), financial services (16%), consumer products/retail (9%), and telecommunications (8%).

Software development and QA organizations can complete the assessment on-line (www.seapine.com/qualityready).  Once the initial benchmarking data has been tabulated I’ll let you know how various organizations (by revenue and industry) compare.

In the early 80’s I was a marketing director for a small oil field service company located in Abilene, Texas.  It was electrifying to be on location when a wildcatter hit oil.  If investors happen to on-site during the discovery they would literally break out the champagne bottles.  If the driller hit water and the well started pumping mud the show was over.  The only thing that can be done at that point is to plug the well, tear down the drilling rig, and move to the next location.  It seems fitting that during that early 80’s oil boom the developers at Texas Instruments would borrow oil field jargon to describe one of their error messages:

“SHUT ’ER DOWN, CLANCY, SHE’S PUMPING MUD”

Of course when a phrase of that nature is associated with code instead of oil the reaction – and results, can be devastating.  High-risk is a given when it comes to oil exploration.  In fact, only about 40% of wells recently drilled find commercial hydrocarbons.  When it comes to software though, customers expect the applications they buy to work 100 percent of the time.  Software defects can cause serious business consequences that have the power to ruin a company’s reputation, and possibly shut’er down forever.

Zero defects sounds unachievable, particularly during a time when products are so complex.  After all, aren’t software bugs just part of the feature set?  In truth, research shows that given the choice of higher cost, longer delivery time or poorer quality, customers will choose to protect quality.  That means development and QA organizations need to think like customers, and put aggressive quality programs in place to remain true to their customer-focused objectives.  A sustainable competitive advantage emerges when quality-centric business practices are put into place.  A focused discipline on service, quality, and reliability has proven to be a timeless strategy that both engages the customer, and builds loyalty.

Recently one of my students stated that, “quality means different things to different industries.”  The example they shared was that the toys they buy their kids better work (or not be coated with lead paint) because that’s what they expected. However; for intangible items – like the accountant they hired for their business taxes, they evaluated quality differently.

Reflecting on those differences, my student suggested that creating a “quality process” would require different goals and organizational efforts. For example, at a high level, manufactured goods require more of an engineering perspective of quality. Conversely, business that is more complex or intangible may need a program to define quality in the relationships they have with their customers.  The mention of quality around customer relationships brought the PIMS (profit impact on marketing strategy) study into our classroom discussion.  The PIMS Principle (Buzzell and Gale, 1987) contains interesting research. The study indicated that the profitability of a business is affected by 37 basic factors, explaining the more than 80 percent profitability variation among the businesses studied. Of the 37 basic factors, seven proved to be of primary importance. Based on analysis of information available in the PIMS database, Buzzell and Gale hypothesized that “in the long run, the most important single factor affecting a business unit’s performance is the quality of its products and services relative to those of competitors. A quality edge boosts performance in two ways. In the short run, superior quality yields increased profits via premium prices. In the longer term, superior or improving relative quality is the more effective way for a business to grow, leading to both market expansion and gains in market share.”

The concept of quality as it relates to the software industry generally blends three perspectives. First, in many industries software is mission critical; meaning the features must be reliable and always work. For example, a financial services organization is not going to tolerate bugs/defects that result in posting errors. A bank needs to keep their debits and credits in the correct column; its just one of those regulatory things! The second perspective that directly impacts the customer experience is technical support. In the case of an issue or problem users can be very unforgiving if prompt attention and follow-up is lacking. The third area involves innovation. Software users expect applications to continuously evolve to meet their ever changing needs and desires. Each perspective is important, and consistent quality practices will help business managers make customer-focused decisions.