Using Lean IT To Do More With Less: Improving The Business Value of IT
Using Lean IT To Do More With Less: Improving The Business Value of IT
Using Lean IT To Do More With Less: Improving The Business Value of IT
Table of Contents
Executive Summary................................................................................................................................................................................... 3
Lean IT Origins........................................................................................................................................................................................... 4
Lean IT Goals............................................................................................................................................................................................. 4
Lean IT Tool Kit....................................................................................................................................................................................... 5
A closer look at Value Stream Mapping and 8 Types of Waste................................................................................................................ 6
Making Lean IT work for you..................................................................................................................................................................... 8
Case Study: Making the Service Request Management Process 75% faster.......................................................................................... 9
Conclusion............................................................................................................................................................................................... 10
Executive Summary
The Lean IT Opportunity
Our research shows that one of the greatest challenges CIOs face is finding ways to release IT capacity from just keeping the
lights on to focus on the primary value chain activities that deliver what the business values most. In other words, they need
to do more with less.
We believe that Lean IT offers CIOs a tried and tested set of tools which can be applied swiftly and pragmatically to rise to this
challenge. Lean IT enables IT to focus on the work that truly adds value to the business and to simplify the processes used to get
the work done.
Research shows that many global companies have already identified the ability to use Lean IT as key IT capability and that applying
Lean IT can free up 20% to 30% of IT capacity by streamlining IT processes, automating routine functions and eliminating redundancy.1
In other words, Lean IT raises quality and reduces cost by focusing on Doing the right things well.
In this White Paper, we explain what Lean IT is for, the main tools that it uses, and how to apply them successfully to improve
business value.
Lean IT Origins
Lean was originally developed to improve quality and reduce cost in manufacturing. Later, Lean tools were used to improve quality and
reduce costs of services. In Lean IT, the thinking has evolved into a robust approach for improving the business value of IT by improving
quality, eliminating waste, shortening lead times and reducing cost.
The Lean IT Tool Kit
The Lean IT Tool Kit has two sets of tools that simplify how IT does business:
Value Alignment Tools that ensure that IT work is focused on delivering what the Business values
Voice of The Customer
Value Stream Mapping
8 Types of Waste
Value Delivery Tools that ensure that IT work is executed efficiently
5S Analysis
Pull /Demand Systems
Continuous Flow Design
To get the best results from using these tools, they need to be focused on the right topics. In this paper we give relevant IT examples
for each tool.
We have taken a deeper look at the Value Stream Mapping and 8 Types of Waste as we believe they will set the Lean IT agenda for the
organization. We illustrate the use of the tools based on our experience of working with a client to produce a leaner IT Service Request
Management process.
Making Lean IT work for you
The potential value of Lean IT is best realized by taking a pragmatic, results focused approach to engaging your people in adopting a
lean mindset and managing the application of the Lean IT Tool Kit. We have developed a simple four step process for doing this which
enables you to lay the foundations for Lean IT, get lean and measure success.
Lean IT Origins
The approach that eventually became known as Lean Manufacturing was developed in the 1980s to find ways to improve quality
while reducing costs.
A decade later, the global success of Lean Manufacturing led to Lean principles being applied to other environments e.g. Lean
Office, Supply Chain, Health Care, and the Service Industry.
The rigorous application of Lean principles to IT services and processes started this century, in parallel to the growing adoption
on IT standards such as ITIL.
Lean Manufacturing
Optimization of production
work flows
Application of Pull/Just in Time
principles to the production/
assembly line
Striving for smooth production
flows
Lean Services
Lean IT
Optimization of IT service
provisioning
Optimization of IT-enabled
business processes
Lean IT Goals
An IT organization is Lean when it systematically pursues the continuous ambition of establishing processes and services
that are:
At the right level of quality
Waste free
As efficient and smooth as possible
Aligned with changing business needs and priorities.
This ambition is captured in the four goals of Lean IT.
Improve Quality
Eliminate Waste
Reduce Lead-time
For IT, these goals are not entirely new; quality improvement and reduction of total cost have been around for a long time and
waste elimination and lead-time reduction are another manifestation of the drive for business process excellence.
What is new about Lean IT is how these goals are achieved:
A small number of tried and tested tools that both IT and the Business can use together
A pragmatic focus on governing specific initiatives targeted on fixing real problems with rapid results
The creation of a sustainable Lean IT culture that engages people in both the Business and IT in permanently altering the
approach to getting business value from IT.
Voice of the
Customer
Value Stream
Mapping
5S Analysis
Pull/Demand
System
8 Types of
Waste
Continuous
Flow
Applying Lean IT principles and best-practices within an IT organization enhances business efficiency and effectiveness in
two ways shown below:
Lean IT Value Stream Mapping
Capturing the particular process steps, information flows and relevant key metrics describing and quantifying the
current flow of activities and items in the Value Stream in order to improve efficiency and eliminate waste.
Inward-Facing IT Value Streams
Over Production/
Over Provisioning
Inventory
Over Processing
Definition
Non-conformity of a
process or process step
outcome
IT
Examples
Software bugs
System outages
Unused applications in
standardized software loads
Unauthorized hardware or
application changes
Impact
Transporting
Motion
Waiting
Unused Knowledge
Definition
IT
Examples
Impact
Long synchronization/
replication cycles between
application platforms
Non-productive time of
resources involved in upstream
process tasks
Lean IT Strategy
Lean IT Mobilization
Lean IT Initiatives
Lean IT Scorecard
Build Communications
capability and capacity
In our experience, Lean IT delivers the best value when leaders in the Business and IT spend time laying the foundations to
create and nurture a sustainable Lean IT culture that permanently alters the approach to getting business value from IT. This
requires strong leadership from the Business and IT to:
Define and sponsor the Lean IT agenda
Promote the Lean IT culture
Engage the right people to deliver Lean IT initiatives
Set up and empower the right governance process for Lean IT
Celebrate its success
With the right foundations have been laid, we believe the best way forward is through a portfolio of small Lean IT initiatives,
focused on real problems and opportunities. The Lean IT Initiative Portfolio needs to be governed jointly by the Business and IT to:
Enable a coordinated portfolio of targeted initiatives to move the Lean IT agenda forward
Drive synergies and make trade-offs between initiatives
Measure the business value delivered by the Lean IT initiatives.
Control resourcing and costs
Working together, the leadership and the governance of Lean IT reinforce the behaviors and provide the tools and metrics
needed to embody Lean IT as THE normal way of doing business rather than as a one-off program.
Case Study:
Making the Service Request Management Process 75% faster
In the course of a re-design and transition project for the Customer SAP Competence Center our client, a globally operating
biopharma company experienced significant problems in the fulfillment of service requests.
The internal IT-customers complained that they had to wait too long for the completion of standard requests like the creation
or modification of a new SAP account, for adding or removing roles or modifying a SAP network printer.
Value Stream Mapping
Together with the staff members who were actively involved in the service request management the project team developed
a Values Stream Map of the process.
Using sample data from the ticketing system the project team calculated an average lead-time for the fulfillment of service
requests of 25 days. However, the cycle- time, the time people actively worked on a request in average was 3 hours only. This
meant that only 1,5% of the time it took to fulfill the request added value from a customer perspective.
8 Types of Waste
By looking deeper into the steps with the largest difference in lead-time versus cycle-time the project team discovered
significant waste:
Requests were raised in inconsistent formats (defects)
It was not clear for the requestor which information had to be provided in order to process the request (over- or
underprovisioning)
The approval process involved the physical signature of the request form, which sometimes led to printing and scanning of
a request form multiple times (transporting and motion)
Roles and authorization levels were unclear and not applied in a consistent way (defect)
5S and Continuous Flow
The measures the project team applied followed the 5S and Continuous Flow principles:
To resolve the inconsistencies in the request formats a new electronic request form was created. This also resolved the
question of which information had to be provided for a particular type of request.
An electronic workflow forwarded the requests between the different activities and notified the people involved in the
approval and processing of a request.
S
tandardization of the roles and authorization levels ensured transparency, comprehensibility and adherence with the
corporate guidelines.
Lean IT Result
By implementing these changes and training the people accordingly the client accomplished a decrease in average Service
Request time from 25 days to 5 days.
Conclusion
Lean IT enables the Business and IT to work together to focus on doing the right things well. It offers a simple but robust Tool
Kit that increases quality by simplifying delivery. With the right leadership and governance it can permanently change the ability
of IT to deliver Business Value.
References
1 R
OGER ROBERTS, HUGO SARRAZIN, JOHNSON SIKES: Reshaping IT management for turbulent times, McKinsey
Quarterly, December 2010
2 Google Insights for Search, trend analysis for Lean IT searches
3
MIKE ROTHER, JOHN SHOOK, JOHN, Learning to See: value-stream mapping to create value and eliminate muda,
Brookline, MA, Lean Enterprise Institute, 2003
4 TAIICHI OHNO, Toyota Production System: Beyond Large-Scale Production, Productivity Press, 1988
10
Authors
Stefan Schrader, Managing Consultant, Germany
Stefan Schrader has more than 10 years experience in business process improvement, process
management and business transformation in different industries for example automotive,
banking, insurance and telecommunications. He is an experienced Lean Six Sigma Master
Black Belt, moderator and Kaizen workshop facilitator working with cross-functional teams in
different industries and at different levels. His origins are in IT, where he held various positions in
infrastructure operations and support.
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