Open innovation – A paradigm shift in defence project management?

1. Open innovation –A paradigm shift in defence project management? Ryan Hood QinetiQ Technology Leader 03 October 2007

2. Overview • 01Project management and system development • 02 Open innovation • 03 Cisco and Lucent (and Bell Labs) • 04 Analogy with Defence? • 05 Innovation and projects • 06 Agile project management, agile development • 07 Boehm’s spiral model • 08 DSDM • 09 Summary

3. 01 Project management and system development System Development Processes Technology Processes Enterprise Processes Project Processes significant shared execution of life cycle processes between disciplines

4. 02 Open innovation • In the commercial world there is a significant shift in how businesses deliver and evolve. • ‘Open’ business models are triumphing over closed ones. • Markets needs are changing faster than ever before • Most innovation goes on external to the firm • Rapid ‘clock speed’ of innovation • Cost of technology development is increasing • And, innovation is hard to control. • In such circumstances organisations are becoming more agile, they are including the user in the development process and are adopting external innovations. • Examples include: Proctor & Gamble, IBM and Cisco

5. 03 Cisco and Lucent Technologies (and Bell Labs) • Using an agile and open approach Cisco surpassed perhaps the finest industrial R&D establishment in the World, without doing much fundamental research of its own. • In the fast moving network and communications market • Cisco competed with Lucent Technologies (and Bells Labs) • By using modular design • Investing or partnering with external companies and start-ups • Working closely with users • Going early to market, gaining feedback • And rapidly iterating to fit users needs. • Cisco market value $200Bn • Lucent Technologies $20Bn (bought by Alcatel)

6. 04 Analogy with Defence? • The ‘business models’ of terrorists and insurgents are very much an agile and open approach. They do not have thick internal R&D establishments, and are willing to take knowledge and technologies from anywhere to achieve their goals. • Insurgents continue to compete using • Cells of ‘users’ and ‘technicians’ • Lessons from previous conflicts e.g. Israel • Networks, state information, media, internet • Weapons and commercial technology • Rapid development through application.

7. 05 The link with projects Motivation A requirement, timeline and reward • Business models, projects, risk and innovation are intertwined. Projects deliver solutions, generally innovative solutions. • Thus, successful innovation depends on the project management approach. • Much as we did during the Cold War we need to: • Get inside the mind of the opponent. • Focus more on the adversary rather than “our system”. • Match and better our project management approach. • But the adversaries approach is • Agile • And open to external innovation • We need agile approaches. hot-bed for innovation Ability Resources, processes, knowledge and skills Source: The Innovators Dilemma

8. 06 Agile project management, agile development Traditional • Agile development has a number of specific techniques. • Examples are: • Boehm’s spiral model • DSDM • They value user-innovator interaction and prototyping over heavy and formal documentation. • Other key characteristics are early delivery, iteration and adaptable design. Process focus Light Heavy People and prototype focus Source: adapted from ‘Standards, Agility and Engineering’, IEEE Agile

9. 07 Boehm’s spiral model Source: Cross-talk. • Spiral development is a ‘risk-driven’ approach. At a basic level it is an OODA* loop. • Meets user needs and reduces technical risk through an iterative approach: • Inclusion of user in development process • Identify risks • Develop prototypes to reduce technical risks • Modular design to facilitate change • Integrate external innovations. • Requires: • Dedicated user involvement in project team, proving facilities and CONDO** • Rapid integration of external technologies. *OODA = Observe Orientate Do Analyse **CONDO = Contractors on Deployed Operations

10. 07 Boehm’s spiral model Source: Cross-talk. • Spiral development is a ‘risk-driven’ approach. At a basic level it is an OODA* loop. • Meets user needs and reduces technical risk through an iterative approach: • Inclusion of user in development process • Identify risks • Develop prototypes to reduce technical risks • Modular design to facilitate change • Integrate external innovations. • Requires: • Dedicated user involvement in project team, proving facilities and CONDO** • Rapid integration of external technologies. Observe Orientate Do Analyse *OODA = Observe Orientate Do Analyse **CONDO = Contractors on Deployed Operations

11. Observe Orientate Do Analyse 07 Spiral model – an example Source: Cross-talk. • [1] Requirements, development plan, other plans • [2] Identify and prioritise risks P,T,C (technical, financial etc.) • [3] Develop architecture, develop prototype, other risk reduction, “spin in” • [4] Test with select group of users, “spin-out” • [5] Incorporate feedback, review requirements and plans • [6] Identify and prioritise risks • [7] Develop prototype, other risk reduction, “spin in” • [8] Test with users, “spin out” • … 13 9 10 6 5 1 2 4 3 8 7 “Spin out” 12 11 “Spin in” OODA = Observe Orientate Do Analyse CONDO = Contractors on Deployed Operations

12. 08 Dynamic Systems Development Methodology (DSDM) • Like the spiral model, DSDM focuses on reducing risk through strong use-innovator interaction, early deliver and rapid iteration. Real functionality is valued over heavy and formal documentation. • Key principles are: • Time-boxing and Pareto 80/20 rule • MoSCoW rules • Modular adaptable design • Just a time-boxed OODA loop? • Identify requirements and risk • Prototype • Test • Feedback and iterate • Key principles: • Time-boxing • MoSCoW rules • Pareto 80/20 rule Source: “DSDM in a nutshell”, Keith Richards

13. 08 DSDM – key principles • As well as user-innovator interaction and prototyping, key principles are time-boxing, the 80-20 rule and MoSCoW rule. • Timeboxing: • Decompose into bit-size chunks, easier to manage • Fixed deadline, fixed cost • Minimum box includes ‘Must have’ requirements • Each box must deliver usable functionality • Prioritised requirements MoSCoW rules: • Must have • Should have • Couldhave • Won’thave (but Wouldlike in future) • 80/20 rule: • 80% functionality delivered in 20% of the time • (Likewise, the other 20% of functionality is delivered in 80% of the time)

14. 08 DSDM – an example • Joint Data Network Backbone project, a TADL IPT initiative and DACP A3 pilot. Approach • Users embedded in the development team • Focus is delivering functionality rather than documentation • Time and cost ‘boxed’ – hard deadline • Prioritised requirement, MoSCoW rules • Competitive, parallel time-boxes • Modular design • Test with user in real operational scenario • Feedback • Iterate …

15. 09 Summary • In the commercial world and in defence, agile and ‘open’ models are triumphing over closed ones. • To manage risk in changing scenarios, projects must : • Value user-innovator interaction and prototyping over heavy and formal documentation • Utilise modular design and integrate external technologies • Deliver early prototypes, feedback and iterate.