PRACTICAL APPLICATIONS OF LEAN IT

APPLICATION SERVICES

SEPTEMBER 2015

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WHERE LEAN MEETS ITThe business landscape is littered with discarded business improvement and process optimization methodologies: trends that were once red-hot then rejected, like yesterday’s fashions, in favor of the next big thing. The concepts behind Lean, however, have proven to be an enduring and powerful method for helping organizations create more value for their customer and, in turn, for themselves. Lean is simply about continuously improving the processes that bring value to customers.

LEAN CONCEPTS IN IT

Today, IT is responsible for a large share of the value an organization offers to customers. But it has also become complex, cumbersome and inefficient. How, then, can Lean help?

The first paper in this two-part series, “The Promise of Lean IT,” explores the broad concepts of Lean and how they can apply to IT. In this second paper, we’ll look at translating Lean terms and concepts into processes, tools and technologies you may already be familiar with. Understanding how emerging IT practices and tools relate to the principles of Lean can help you understand the intent and value of these new practices, and help you develop a more comprehensive Lean strategy.

Your IT organization is probably undertaking Lean initiatives already, but with a little exploration you’ll find many more places there for Lean concepts and techniques.

Let’s take a look at some of the parallel concepts that exist. It is important to note that Lean also encompasses concepts beyond those included in this paper. In addition, there is not a one-to-one relationship with these concepts; in fact, it is likely that one topic will have several correlations. The definitions of the Lean concepts included here are adapted from the Lean Lexicon.1

Lean Concept IT Technique

Kaizen — continuous improvement involving everyone in the organization and promoting collaborative learning to create more value with less waste

Single Piece Flow — ideal state of efficient operations where production/assembly lines produce one product at a time, minimizing forms of waste such as overproduction, inventory, transport, defects, etc.

Zero Defects — a way of thinking and doing that reinforces the notion that defects are not acceptable

Scrum is an iterative and incremental agile software development methodology for managing product development. Its premise is similar to Kaizen — it is a continuous improvement focus involving the entire development team. The idea of Single Piece Flow is also consistent with Scrum, as Scrum’s sprints focus on discrete elements of the final design that are completed before moving on to the next elements.

SMED (Single-Minute Exchange of Dies) — a system for dramatically reducing the time it takes to complete equipment changeovers, minimizing the time where a production line is NOT producing output Just in Time — an inventory strategy that companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs. This method requires that producers be able to accurately forecast demand Takt Time — the time taken to produce a single “output” of a production line

DevOps2 is basically the practice of operations and development teams participating together in the entire service lifecycle, from design through the development process to produc-tion support. There are a lot of opinions on what DevOps is and isn’t. However, there are some common themes, tools and ideas that have many parallels with Lean. Quick change-overs between development and test cycles resonate with SMED. The concept of doing the right activities at the right time to minimize wait times and unnecessary inventories is “Just in Time” for IT. The concept of reducing the time between releases is very consistent with minimizing “Takt Time.”

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Lean Concept IT Technique

Pull System — a method of controlling the flow of resources by replacing only what has been consumed. Focuses on actual customer demand — not forecasted demand

Agile is another nebulous term, given that it is being applied in so many areas of business today. A dictionary definition of Agile describes something that is “characterized by quickness, lightness, and ease of movement; nimble.”3 So when we turn to IT, it’s about “pulling” products and services through the lifecycle, rather than “pushing” them out.4

IT-as-a-Service, or the Service Enabled Enterprise,5 is about organizations moving from a “plan-build-run” model to a “plan-consume” model, which resonates well with the notion of a pull system. It gives customers real choice about what IT services they need, and how much they need to use.

Automation — the ability to perform tasks via a machine rather than a person. Focuses heavily on repeatability and efficiency

Integration Services provide the automated glue between systems. Most business processes have multiple systems supporting them. In many cases, people copy and paste data from one system to another. Integration Services create ecosystems that allow people to do what they need to without being constrained by systems, and vice versa.

Internet of Things (IoT)6 is defined by Gartner as the “network of physical objects that contain embedded technology to communicate and sense or interact with their internal states or the external environment.”7 In other words, devices and sensors collect data from the physical environment and bring this data into the IT environment — all without human involvement.

Value Stream Mapping — method for analyzing the current state and designing a future state for the series of events that take a product or service from its beginning through to the customer — focusing on those activities that the customer would be prepared to pay for, and eliminating waste

Business Process Management (BPM) is a methodol-ogy allowing organizations to define, model and execute activities in coherent and efficient processes. In many organizations there is a disconnect between business operations and IT. BPM is the place where these two worlds collide. It involves elements of people, process, tools and data. BPM can be described as the tools that help people execute business processes to achieve business goals and objectives. Using entities such as APIs, Business Services, SOA Grids/Enterprise Service Bus, and Big Data and Analytics, this approach seeks to open up access to systems of record to optimize tasks and activities that truly add value for the organization’s customers.8

5S* — a simple method of organizing a workplace in a clean, efficient and safe manner to enhance your productivity, visual management and ensure the introduction of standardized working

Kanban — sometimes called a “two-bin” system that dictates the manufacturing and supply of parts and components to an assembly line. Kanban is a signaling mechanism that authorizes and gives instructions on what items to supply and in what quantity (no more and no less)

* Seiri, Seiton, Seiso, Seiketsu, Shitsuke

The notion of “a place for everything and everything in its place,” which is at the heart of 5S, certainly has application when looking at the world of IT. Portfolio Rationalization is a classic “Seiri” or “Sort” exercise that removes unwanted elements from an IT portfolio. It makes navigating the IT landscape much easier and reduces costs and footprints, but it also has the added benefit of just simplifying the ecosystem. Creating a centralized Enterprise Portal or App Store allows an organization to “Seiton” or “Straighten” the IT “things” that people need in order to complete tasks. It also promotes “Seiketsu” or “Standardization” within the environment. By creating and optimizing the “supply chains” that sit behind these elements with Kanban-style elements, it enables organizations to minimize their IT “inventory” as a way of minimizing spend on “run and maintain” while maximizing available funding for innovation.

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Lean Concept IT Technique

Visual Management — the placement in plain view of all tools, parts, production activities, and indicators of production system performance, so the status of the system can be understood at a glance by everyone involved

The ability to sort through the ever-increasing complexity of data sources and display them simply is the key to enabling the right people to focus on the right things. Dashboards are tools that allow organizations to “hide the complexity” and give people only the data and information needed to make decisions.

Gemba or Gemba Walk — a manage-ment practice for grasping the current situation through direct observation and inquiry before taking action. Gemba means “actual place” in Japanese and is often used for the shop floor or anyplace where value-creating work actually occurs. A Gemba walk implies that decision makers go, see and interact with people who are actively involved

The Social Media phenomenon has certainly been one of the most disruptive elements behind this technology-driven transformation we find ourselves in today. Social media allows people to share information, ideas and experiences in virtual communities. This has enabled innovations like Crowdsourcing to transform the ways that people source goods and services. Enabling people to “come and see” what others have experienced enables them to make more informed choices as well as offer service providers valuable insights into how customers define value.

FOLLOWING THE LEAN PATH

The kind of transformation that takes place under Lean principles can’t be considered a minor change. This type of transformation completely alters the operating model of an organization. It affects every facet of an organization’s construct: people, process and tools.

The journey to a truly Lean as-a-Service enterprise starts with a cultural change that must be led from the top. And the benefits of such a change are profound. The transformation of the automotive industry and many other manufacturers has proven that continuously optimizing systems that create value for customers creates value for the organization. Lean has changed the way that consumers and manufacturers interact.

The same thing is happening in IT. Advances in technology have changed what we as users value and expect from IT systems. And again, Lean offers many of the principles we need to meet these expectations. Shortening delivery cycles, driving efficiencies within the supplychain, giving customers choice — these are just some of the outcomes of this transformation.

Can Lean help organizations turn IT into an as-a-Service enterprise? Many organizations have already, without realizing it perhaps, begun following the Lean path. Those who’ll benefit the most are organizations that realize how far Lean can take them and develop a comprehensive strategy to maximize the value of Lean. Understanding how today’s IT concepts and emerging practices match up with Lean’s core principles is the first step.

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Shortening delivery cycles, driving efficiencies within the supply chain, giving customers choice — these are just some of the outcomes of this transformation.

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References

1. Lean Lexicon 5th Edition, 2014 http://www.lean.org/Bookstore/ProductDetails.cfm?SelectedProductId=380

2. http://newrelic.com/devops/what-is-devops

3. http://www.thefreedictionary.com/agile

4. Base 36, “Agile & Waterfall Methodologies — A Side-By-Side Comparison” http://www.base36.com/2012/12/agile-waterfall-methodologies-a-side-by-side-comparison/

5. http://assets1.csc.com/application_services/downloads/building_a_service-enabled_enter-prise.010815.pdf

6. Forrester, Brief: The Internet Of Things Will Transform Customer Engagement, May 2015 https://www.forrester.com/Brief+The+Internet+Of+Things+Will+Transform+Customer+Engagement/fulltext/-/E-RES122373

7. Gartner, IT Glossary, “Internet of Things” http://www.gartner.com/it-glossary/internet-of-things/

8. ComputerWeekly.com, “Rentokil opens up core IT systems to business,” May 2015 http://www.computerweekly.com/news/4500246338/Rentokil-opens-up-core-IT-systems-to-business

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