Here's a question I've run across in many, many companies: should QA teams report to the development organization, or be equivalent to development in the company hierarchy?
For arguments sake and to answer the question, QA manger is the head role and really should report to a production manager. They should report to the site or general manager and the same with the factory production manager.
QA is an integral part of the module development team. QA is involved in every stage of the Software Development Life Cycle (SDLC).
Both report to the same member of the management team: the CTO. This ensures that there is a single person responsible for the product (our CTO) and that both QA and Development are independent of each other.
Engineering was responsible for unit testing and basic QA, whereas Product was responsible for the rest of QA.
Quite the opposite. Development should report to QA.
If you imagine the QA department to be your customer (note: QA, not test) then you will do very well. Bugs will get fixed, products will get developed to good standards, development will realise they are there to serve the business and code products accordingly.
However, company politics gives seniority in other ways, so generally development does become more senior to the smaller QA department, if you have a QA department at all.
EDIT: a little addendum to explain myself: at one company I worked at, we had a 'model office' that was set up as a customer site. We'd build the installer CD and deliver it to the QA team, who would install it onto a cleanly-restored set of machines. If there was problems with it in any way, it's be reported back to us and we'd have to fix it (obviously, depending on bug severity) before building another CD and repeating the process. At first I thought "this is gonna be hell", and it was.. but only for a couple of iterations, then dev got the message and made sure those CDs worked, and the software it installed worked.
My current company needs something like that, feedback from site is through a mailing list, installer often doesn't fully work, sometimes there's missing dependencies, and the same install issues crop up again and again. Quality here is poor in comparison to the QA dept that made sure it worked so well before. Here we have a dev-driven group, they're always focussed on the next release, new features. QA is always concerned about the current release, the existing product. It makes a huge difference to what the end-user gets.
So, even if the QA dept is there to ensure quality is acceptable, I still think it should be treated as if it is the customer that development 'reports' to.
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