How to Advance the Industrialization of Testing Services?

The always thought-provoking findings of the 2015 World Quality Report published by Capgemini crossed our desk recently. In our view, it represents the best publicly available primary data points on testing services in the industry. In this edition, one set of data stood out:

How many organizations have implemented a Testing Center of Excellence (TCoE) for both the advancements of industrialization and consolidation of testing activities (see Exhibit 1)?

Exhibit 1: Standardized/industrialize Testing Center of Excellence

Source: Capgemini World Quality Report 2015-16

As the report puts it, the key objective of a TCoE is to set up a highly standardized and industrialized quality assurance and testing factory. This is a key good proxy for organization’s centralization efforts akin to shared services for other, broader IT services as well as being a segue to comprehensive outsourcing that is starting to emerge across the industry.

What caught our eye is the suggestion that 25% of organizations have an operational TCoE and of that 9% do it through a third party. Compare that to HfS data on application maintenance and development: Our data suggests that 46% have a fully operational shared service center, 37% are utilizing outsourcing, while 17% have a (decentralized) in-house function. Thus, not only are the differences in centralization efforts striking but the authors of the report suggest that efforts to run a centralized TCoE have plateaued. The point here is not to question the validity of either data set, but to discuss the implications for testing services.

This discussion should start with the notion that there is no mainstream organizational model for testing services. Mature approaches focus on centralized governance processes and reporting but use a blend of centralized and decentralized work streams. TCoE have become a reference point for the consolidation of testing practices. However, the report authors state that these centralization efforts might have plateaued. Regardless of organizational models, there is a clear emergence of comprehensive standalone testing outsourcing deals that are in the hundreds of millions of $ in TCV. While there is no mainstream organizational model, the increasing pervasiveness agile and DevOps initiatives adds to the complexity, as they require adaption in a centralized as well as outsourced environment.

While organizations as well as the industry at large spend millions on advancing, understanding and promoting SSC and GBS, testing services are at best an after-thought. The testing community needs to find its voice about being integrated into these evolving organizational principals or provide a distinctive and compelling alternative to optimize testing services – and in that context, it does not matter whether testing consists of project centric work or comprehensive outsourcing.

HfS does not profess to have all the answers, but our deep involvement in advising clients on evolving both SSCs and GBSs provides a sound platform to extend these discussions toward the testing community. If you are interested in engaging with us, just drop me a line at [email protected].