Formulation of a Production Strategy for a Softwar

FormulationofaProductionStrategyforaSoftwareProductLineGaryJ.ChastekPatrickDonohoeJohnD.McGregorAugust2009TECHNICALNOTECMU/SEI-2009-TN-025Research,Technology,andSystemSolutionsProgramProductL[e-mail]erformanceofFederalGovernmentContractNumberFA8721-05-C-0003withCarnegieMellonUniversityfortheoperationoftheSoftwareEngineeringInstitute,afederallyfundedresearchanddevelopmentcenter.TheGovernmentoftheUnitedStateshasaroyalty-freegovernment-purposelicensetouse,duplicate,ordisclosethework,inwholeorinpartandinanymanner,andtohaveorpermitotherstodoso,forgovernmentpurposespursuanttothecopyrightlicenseundertheclauseat252.227-7013.i|CMU/SEI-2009-TN-025TableofContentsAbstractvii1Introduction12ProductionPlanning33Porter’sFiveForcesModel54ProductionScenarios75FormulatingaProductionStrategy95.1IdentifyingtheCriticalFactors95.1.1MarketAnalysis105.1.2BuildingaBusinessCase105.1.3Scoping105.1.4TechnologyForecasting115.1.5UnderstandingRelevantDomains115.2FormulatingtheProductionStrategy125.2.1GenericStrategies135.2.2Integration135.3ExampleProductionStrategies145.4EvaluatingandVErifyingtheProductionStrategy166AnExample186.1Defineproductionscenarios186.2Identifythecriticalfactors196.3FormulatetheProductionStrategy206.4Evaluatethestrategy227Summary23Bibliography25ii|CMU/SEI-2009-TN-025iii|CMU/SEI-2009-TN-025ListofFiguresFigure1:ProductionPlanning3Figure2:Porter'sModelofForcesDrivingIndustryCompetition5Figure3:TechniqueOverview9iv|CMU/SEI-2009-TN-025v|CMU/SEI-2009-TN-025ListofTablesTable1:Porter'sForces6Table2:ProductionScenarioFormat7Table3:StrategicForces12Table4:InitialProductionScenario18Table5:ProductLineProductionScenario18Table6:PortabilityScenario19Table7:AGM'sCriticalFactors19Table8:AGM’sStrategicActions21Table9:EvaluationofAGM'sStrategy22vi|CMU/SEI-2009-TN-025vii|CMU/SEI-2009-TN-025AbstractSoftwareproductlinesareofstrategicimportancetotheorganizationsthatadoptthem,affectingbothanorganization’spositioninanexistingmarketanditsabilitytoreacttonewandchangingmarkets.Anorganization’sproductionsystem(i.e.,howitbuildsitsproducts)isalsoofstrategicimportance,directlyaffecting,forexample,thatorganization’sabilitytodelivernewproductsquickly(i.e.,itstimetomarket).Theproductionstrategyforasoftwareproductlineisthehigh-leveldescriptionofhowthepro-ductionsystemrealizesboththecoreassetsandproducts.Theproductionstrategyisderivedfromtheorganization’sbusinessstrategyandisintendedtocoordinatetheactionsofthecoreassetandproductdevelopers.Thestrategydescribeshowtheproductlinepracticesshouldbeemployedsothattheproductlineorganizationwillachieveitsproductiongoals.Thistechnicalnotedescribesatechnique,whichisbasedonwell-knownproceduresfordefiningandevaluatingabusinessstrat-egy,forformulatingtheproductionstrategyofaproductionsystem.Anexampleofstrategycrea-tionisprovided.viii|CMU/SEI-2009-TN-0251|CMU/SEI-2009-TN-0251IntroductionAbusinessstrategyis“thepatternorplanthatintegratesanorganization’smajorgoals,policies,andactionsequencesintoacohesivewhole”[Quinn1980].Rumeltstatesthatstrategyisaboutthedirectionoforganizations:Itincludesthosesubjectswhichareofprimaryconcerntoseniormanagement,ortoanyoneseekingreasonsforthesuccessorfailureamongorganizations.Firmshavetomakechoicestosurvive.Thosewhicharestrategicinclude:theselectionofgoals,thechoiceofproductsandservicestooffer;thedesignandconfigurationofpoliciesdetermininghowthefirmposi-tionsitselftocompeteinproductmarkets(e.g.,competitiveadvantage);thechoiceofanap-propri