One of the great ironies of the growth of offshoring American jobs is that many foreign companies owe their success in part to business processes and procedures developed in America, but not widely adopted here. This is especially true for the software development industry.

Worldwide, the software industry has largely adopted the Carnegie Mellon Software Engineering Institute’s process for software development, called CMMI, for Capability Maturity Model Integration The CMMI process can be applied to most businesses, but it has proven particularly effective for developing software.

In essence, the CMMI process defines and documents the key processes and key employees that are required to perform specific jobs or tasks. This can range from performing a weekly update for a small business Website, to developing a huge corporate e-commerce Website. There are some basic rules, too, like a company must commit adequate resources to projects before it starts them.

CMMI ranks company’s processes as falling into five levels. The higher the level a company achieves, the more likely it will succeed.

In a CMMI level one business there is no well defined set of processes and procedures for performing essential business activities, like updating a company Website. In a level one business, chaos reigns, and success, if it happens at all, only happens because of the heroic actions of the employees. Staying at level one is not recommended because this kind of effort cannot be sustained. The employees will eventually burn out and quit, taking everything they know about the business with them.

In CMMI level two, the development process is well enough documented that the same process can be repeated, again and again with a high degree of confidence, even if key employees quit. This is a critical achievement because the knowledge of what it takes to perform essential business tasks is now part of the business itself, and not just certain employees.

CMMI level three is achieved when all processes and documentation have become standardized and exist as cookie cutter templates, to be used on all new projects so the proverbial wheel doesn’t have to be reinvented for each new project.

CMMI level four, the manageability level, is achieved when a company has the experience to estimate exactly how much new resources a project will require to be successfully completed.

CMMI level five, the optimization level (rarely seen in America), is achieved when management understands the development process so well that the only improvements left to be made concern efficiency.

The cost of implementing CMMI level 3 standard can range from a few thousand dollars for a small business to $250K or more for a large corporation. After the CMMI process is in place, there are trade groups that will audit the company’s efforts and award a certification for the CMMI level the company has achieved.

CMMI may be somewhat expensive to implement, but it’s worth it. Properly implemented, CMMI will almost always make a business more efficient, and more reliable. Employees may not like the restrictions and extra steps CMMI will impose initially, but in the long run it will make their jobs easier, and more secure.

Conversely, not implementing CMMI has its costs, too. One of the problems American companies have had in offshoring software development, particularly to India, is that they have not accounted for how much additional expense not being up to a level two or better will cost them. For instance, replacing an American QA team with low cost Indian QA engineers, will cost more if no test documentation exists, which is typical at a level one shop. At a level three company, all documentation needed would be readily available.

I was a QA contractor at a well-known security software company that decided to replace its entire QA department with an India based QA team. The company was a level one shop with little documentation, and they made things worse by laying the entire QA department off thirty days before the Indian team was to start. The Indian team asked for better documentation, pointing out it would take weeks, perhaps months, to develop test documents based on nothing more than user manuals they were provided with. The American company had no choice but to pay for the additional time required because they had laid everyone in their company off who knew enough to write the documents.

Indian software companies like Wipro, now with over 55,000 employees, take CMMI very seriously, and feature their advanced CMMI certifications prominently in their advertising. The Indians claim to have the first CMMI certified level five software development company, and there are several level four companies in India.

CMMI is beginning to become popular in America, but more with software customers than developers. Recently, the United States government started requiring companies bidding on certain projects to be certified CMMI level three or better. There is a lot of pressure on the Federal government to avoid repeats of costly fiascoes like the FBI’s attempt to modernize its computer system with software that was ultimately too buggy and poorly constructed to use (and wasted $170 million in the process, according to the Washington Post).

The CMMI process should be used by every company with a Website on the Internet. E-commerce Websites may vary in their nature, but they all are built on software code that must work reliably if the business is to be a success.

Just because most American companies have largely failed to implement a repeatable and standardized process for software development doesn’t mean your company is condemned to chaos. You can require companies you purchase software development services from to be certified level three or better, and you can implement CMMI in your company. It’s really not hard. It just takes commitment.

All the information you need to start your company on the road to CMMI certification is available on the Carnegie Mellon SEI CMMI Website (at www.sei.cmu.edu/). Amazon.com carries several books on CMMI, some even come with software copies of the major CMMI document templates.

CMMI may sound like overkill for a small business, but it’s not. Even small businesses need to do things right.

Glen Emerson Morris has worked as a technology consultant for Network Associates, Yahoo!, Ariba, WebMD, Inktomi, Adobe, Apple and Radius, and is the developer of the Advertising & Marketing Review Data CD.