Quality is the best business plan.
— John Lasseter (b. 1957). American animator and film director. Chief creative officer of Pixar Animation Studios, Walt Disney Animation Studios and DisneyToon Animation Studios.
For some years now, we have been presenting the status of CMMI around the world, as this quality model is a good indicator of the overall health of the global IT industry. Previously, we explained its origin, and described its different constellations and logic behind their inclusion in this study. For clarity, we present a brief summary justifying its history and importance:
- CMMI stands for Capability Maturity Model Integration.
- This is a model for improvement and evaluation of processes, which focuses on certain practices of development, maintenance and operation of software systems, allowing CMMI to evaluate and measure the maturity of the software development process used by any organization.
- CMMI measures this maturity on a scale of L1 (chaotic) to L5 (continuous improvement).
- CMMI began its development in 1987 by the Software Engineering Institute (SEI) of Carnegie Mellon University in Pittsburgh, USA.
- Said model was commissioned by the Government of the United States to assess its vendors, especially those allocated to contracts for defense and space research, in order to base its bids not only on cost but also on the vendor’s maturity.
- CMMI was originally designed for the development and maintenance of software, but was later extended to systems engineering, vendor management, development and integration of products and processes, human resource management and software acquisition.
- While CMMI proponents see it as a tool to create better quality products and increase added value, as well as customer satisfaction, in practice the importance of CMMI lies in a greater catch of larger, high-risk projects, resulting in more attractive returns.
- Finally, CMMI is a business-oriented tool; it is not people-centered. That is to say, it will not make life easier nor result in a more productive staff; nor it will decrease production costs. It just makes sure the organization adheres to a standard and its people “know what they’re doing”.
CMMI in the world
On September 10, 2015, there were 5014 active CMMI appraisals, from levels L2 to L5, spread over 83 countries worldwide. This amounted to an increase of 8% with regard to the certificates recorded on the previous study (4031 certifications on July 2012). The list is as follows:
|Country / Level||L2||L3||L4||L5||Total|
|Korea, Republic Of||29||85||11||6||131|
|United Arab Emirates||1||2||3|
The most significant change with respect to the previous version, is the dramatic decrease in the number of L2 appraisals (737 in 2015 vs. 872 in 2012). This is because during the last three years, organizations have matured to higher levels of CMMI, or because of the economic difficulties that are suffering Europe, China and their respective spheres of influence, many companies that had a low level of maturity are gone. The key point here is that there are not enough L2 companies being created, which in some years may lead to further consolidation of IT companies, and possibly fewer labor opportunities. Naturally, the regional outlook has been affected by this situation:
• Anglo-America (US, Canada) has maintained a steady growth in number of certifications with just over 4% per year (996 in 2015 vs. 888 appraisals in 2012), relatively on par to its economic growth over the last three years. By contrast, in terms of L5 evaluations, their number decreased from 59 to 56 over the same period.
• Latin America has grown enormously over the past three years, about 21% annually (511 appraisals in 2015 vs. 316 in 2012). This block is being pushed mainly by Mexico and Colombia (with 224 and 84 certifications, respectively). And regarding the L5 certifications, today Mexicans and Colombians can be proud of the level of maturity found in their organizations, because by having 22 and 15 L5 certifications respectively, both countries are becoming the main IT service providers in the region. Unfortunately, you cannot say the same for Brazil, because due to its “World Cup effect“, this South American power has stalled, growing or replacing only 7 certifications in the last three years.
• With the economic problems being faced by southern Europe – Portugal, Spain, France, Italy and especially Greece – the whole region is going down with 379 appraisals in 2015, down from the 406 it held in 2012. Although the fall in number of certifications is more pronounced in Spain, with 20 fewer certifications than in 2012, Western Europe in general has decreased the number of its certified organizations. The exception is Eastern Europe, especially Poland (+3) and the Czech Republic (+2). Of course, the European maturity level has increased, reaching 41 L5 in these three years.
• The Middle East has remained as a hub of IT services for years – especially Egypt and Israel – demonstrating continuity with 38 certifications, of which 10 are L5.
• Although Africa has made an extraordinary increase (26 appraisals in 2015 vs. 8 in 2012), the continent remains underdeveloped in terms of IT industry. This is very worrying, as a continent of 1.1 billion people still does not reach the technological maturity of a country like Argentina, which has the same number of certifications, but has a population of only 42 million.
• Australia and New Zealand have remained relatively stable (9 certifications in 2015 vs. 8 in 2012).
• Finally, Asia (3055 certifications in 2015 vs. 2248 in 2012) has reached an annual growth of 12% being led by China and India (2078 and 545 appraisals, respectively). Both countries together have just over half of the L5 certifications in the world (276 out of 485 certifications). However, this does not detract from other countries such as Thailand (50 certifications), Turkey (35) and Vietnam (25), having made a successful effort to attract investment to the IT industry.
CMMI in Mexico: using the Fuaaa
On September 10, 2015, Mexico had 224 certifications distributed among 219 organizations, making the country the fourth in the world with more evaluations in this model, after China, India and the United States. Having overtaken Brazil, Spain, Japan and South Korea in number of certifications, Mexico is also fourth in L5 assessments (22), behind the two Asian and American giants, respectively.
If each unit is considered as independently assessed – for example, HITSS Solutions (21855) has distributed functions between the states of Queretaro and Aguascalientes, counting as two certifications – there would be a total of 251 independent evaluations, distributed among Mexican states as follows:
|Estado / Nivel||L2||L3||L4||L5||Total|
|Federal District (a.k.a. Mexico City)||16||36||3||14||69|
• It is notorious the ongoing rivalry between Jalisco and the Federal District for supremacy in terms of CMMI adoption. While both entities had 35 and 28 certifications in 2012, three years later both have 63 and 69 certifications, respectively. Federal District organizations have focused on consolidating the L5 level, while the Mexican Silicon Valley, being more dynamic, has 38 L2 organizations: just over 32% of the country overall.
• On the third place is the northern state of Nuevo Leon, which agglomerates 27 certifications, and following very closely, the state of Sinaloa with 25. It is worth mentioning that for some time, both states also have become strong rivals seeking to offer nearshoring services to the United States, taking advantage of proximity to customers in the case of Nuevo Leon (bordering Texas upstate), or cheap labor and relative proximity to California, as is the case with Sinaloa.
• Although the state of Queretaro is still establishing itself as an important industrial and IT services hub with 15 appraisals – of which 6 are L5: second place nationally – the surprise this time is the state of Yucatan, because it had no certifications in 2012, having attained 7 in the last three years. The most significant point of its growth is that it already has a L4 certification, which will become a new L5 in less than a year.
It’s interesting to see how the North-South divide does not apply to IT: so distant nations that are hardly heard in the news – such as Thailand and the Philippines – are powers within this industry. Of course, although it is not reflected in this study, there are multinationals that are responsible for these success stories: for example, the renowned Irish consulting company Accenture owns seventeen L3 certifications, one L4 and nine L5, distributed throughout Europe, Asia and Latin America – 27 in total, equal in number to those of the entire United Kingdom.
On the other hand, it is sad to see how powers in this area (Brazil, Spain) are deflating due to economic problems, as this will impact the medium and long term viability of their IT industries. This in fact is already evident in the case of Spain, since in recent years, Mexico has seen a new wave of Spanish immigrants fleeing the current economic crisis, and whom for better or worse, have benefited Mexico at the expense of Spain.
Speaking of Mexico, it is a pleasant surprise to see how the country has risen to the fourth place in the world rankings. Perhaps due to greater economic integration we have with the United States, or possibly some of the programs implemented by the federal government are paying off. Leaving aside the cause for another time, the reality is that by having an IT market worth approximately 23.63 billion dollars and an expected growth of 6.4% for 2015, Mexico is becoming one of the major global players. According to Gartner:
- On 2016, one in five of the leading providers of local IT services will be acquired by a multinational.
- By 2017, the dynamic server market in Mexico will experience the highest growth in the region.
- On 2018, Mexico will become a Latin American power in data center services, which will result in large-scale creation of several dozen data centers.
- By 2018, retailers in Mexico will double their existing investments in CRM, ERP, supply chain and BI due to the rapid growth of the retail market.
However, we must not lower our guard: with an economic downturn in our doorsteps, many of these plans can come down. For now, let’s have a toast: this is an occasion to celebrate.