A quick one page project report to explain operational implications of Software Development and Quality Management at Microsoft

1. Software Development and
Quality Management at
IMBA NOV 2010 N1 Group H
IE BUSINESS SCHOOL
Andrea Carrow
Kundan Bhaduri
Miguel Piedrahita
Mitsuru Nakayama
Paolo Dina
Regina Hernández

2. Software Development and Quality Management at Microsoft
Microsoft designs and delivers several lines of consumer and enterprise software products every year that form
the core of its business. Each software product development process is considered a project and therefore has
different sets of inputs, outputs and workflows. Further, the design process differs amongst product type (OS,
ERPs, DTP applications, Database applications, Web Services etc). Each project is characterized by multi-
member teams consisting of between 3 to 10 members per project, depending on the size of product (Small or
Medium). However, it is not uncommon for larger projects to typically involve 100s of engineers and product
specialists. Since skilled manpower form the key resource for each project, most projects at Microsoft are
generally estimated with a buffer of 20-25% idle capacity.
The Software design and development process is sub-divided into four sub-processes: Scope definition,
Development, Stabilization and Delivery which have linear milestone-based sub-tasks (Exhibit 1). Although
there are many software product development methods that have evolved at Microsoft over the past decade,
one of the most prevalent ones is the Risk-Requirement based development methodology. In this process, at
the time of scope definition and requirement design, all pertinent risks to the project are identified and
associated to one or more requirements in what is known as a Risk-Requirement Matrix (Exhibit 2). At the end
of development, this matrix is used to prioritize testing for those requirements that had the highest risk
associated to them, thus mitigating these risks. This method ensures product quality with lower effort and cost.
Microsoft observes three quality goals in all its software development projects – Functionality, performance and
timeliness of delivery. The key quality issues that are commonly experienced are low reliability, high
interoperability costs, and low scalability. These can be attributed to various bottlenecks arising out of
interdependence of various systems and modules. Microsoft also identifies its Software Quality Gap, which is
defined as the deviance between the result of quality delivered and the combined expectation of the software
producer and the customer. These gaps are mitigated through managed development methods such as Joint
Application Development (JAD) at Microsoft. The key metrics that are used to benchmark software quality at the
company are explained in Exhibit 3.
In its very basic form, the software development process is nothing but an assimilation of inputs in terms of user
requirements that are transformed into usable software programs. The process has many subdivisions and
therefore several intermediate outputs get generated throughout the process of software development. The key
principle assumed in this process is that the resources are able to meet the schedule and process the
deliverable. Project Management is therefore a key aspect in the software development process. Project
managers frequently use planning and quality tools such as Microsoft Project Plan (MPP) and Quick Test Pro
(QTP) to track resource utilization, identify bottlenecks, generate cost estimations and track revenues.
Microsoft uses several key ratios to track efficiency of their development and quality assurance processes. The
two widely used ratios are Defect Leakage Rate (DLR) and the Defect Rejection Rate (DRR) (Exhibit 4). At an
overall level, for every defect in the system at the 3 quality level (i.e. 3 defects per 1000 lines of code [LOC]),
on an average 37.5% defects get leaked into production. It is therefore clear that early detection and resolution
of defects is critical for Microsoft to keep its costs low. Therefore it is important that the company makes the
right tradeoff between Costs and Quality (COQ) during the software development process (Exhibit 5).
The company also adopts a lean Quality Control process throughout its development cycle. The process begins
by allocating a severity and priority to all identified defects. The severity is based on the defect’s importance to
the technical implementation, while the priority of a defect signifies its importance to business requirement
conformance. Only upon resolution of all high severity and high priority defects, is any product released to
market after iterative testing (Exhibit 6). However, we all know from our experience that zero-defect-release has
always been elusive for Microsoft. Some permutations of inputs that result in ‘bugs’ get potentially leaked
through the testing cycle, and creep into production release (but get subsequently detected by the consumers
due to a large install base). Over the past four years, Microsoft has consistently focused on decreasing its DLR,
which has shown impressive results. While the Vista operating system had a very high DLR (upwards of 10%),
the company’s most successful OS till date, Windows 7, introduced in 2010 enjoys a DLR of <1% (while
improving the process quality to 6 ) thanks to improved control systems in the company.
In conclusion, right quality assurance practices can help reduce development & maintenance costs and lower
customer dissatisfaction, which in turn drives sales. Microsoft is a perfect case in point in this direction.
© IE Business School | Operations Management T2 Final Project | IMBA Nov 2010 N1 Group H 1

3. Software Development and Quality Management at Microsoft
Requirement Risks
Q1 R1
Q2 R2
Q3 R3
Q4 R4
Requirement Q5 is not tested,
Q5
since no risks are associated
Exhibit 1: Software Development Process Exhibit 2: Risk-Requirement Quality Assurance Method
 Functionality: Correctness, completeness, security and timeliness.
 Usability: User-friendliness, availability, suitability, adaptability.
 Reliability: Resilience, Recovery, Degradation, Transfer
 Performance: Speed, Economy
 Supportability: Testability, Maintainability, Portability, Manageability
Exhibit 3: Software Quality Metrics
Exhibit 4: Important Quality Ratio used at Microsoft
Total Cost of Quality
High
Microsoft’s sweet
(TCQ)
spot
COST
Cost of
implementing Defects
Cost of rectifying
Low
Defects
Low QUALITY High
Exhibit 5: Cost of Quality and point of equilibrium Exhibit 6: Defect Prioritization System
© IE Business School | Operations Management T2 Final Project | IMBA Nov 2010 N1 Group H 2