Measuring Success in the Lean IT World

LITAExecutive Webinar

Host and Presenter

Deborah BurtonMarketing LeadLean IT Association (LITA)

LITA - Pioneering a Global Standard for Lean IT Education & Certification

● Lean IT Association (LITA) is a non-profit organization founded by three Accredited Training Organizations (ATOs) - ITpreneurs, Pink Elephant, Quint Wellington Redwood and three Examination Institutes (EIs) - APMG, EXIN, PEOPLECERT International Ltd. To realize its broader purpose LITA aims to provide:

● An industry-standard set of Lean IT reference materials and other resources for practitioner organizations to use;

● An certification scheme aimed at practitioner organizations looking to adopt Lean IT principles in the IT Service development and operations department as well as professionals that want to be certified in Lean IT on various levels.

Today's Guest Presenter

Niels Loader, Partner, Quint Wellington Redwood, Content Board Lead, Lean IT Association, Chief Examiner Lean IT, APMG

● IT Service Management● IT Performance Improvement● Lean IT● DevOps

Watch the webinar recording

Webinar Recording

Measuring Success in the Lean IT World

Measuring Success in the Lean IT World

Today’s Agenda

1. Why do we need metrics?

2. Lean IT Metrics … and how to choose them

3. Getting metrics to work: Definition and Pitfalls

How can I measure my

success?

ObjectiveTo ensure you can measure your improvements, successes and progress

Why Metrics?

9

What Should I Measure?

Age-old Question

Why Measure?

Influence behavior

Ensure you have facts concerning a particular situation

Provides the answer to a question

Helps you to provide feedback

Metrics are just the BeginningWhy is it important

MeasureFrom goals to KPIs• Ensures discussions are based on facts• Ensures key measurements to monitor whether we are

achieving our goals• Facilitates concrete discussions concerning targets

VisualizeFrom KPIs to steering information▪ Consistent and effective communication about goals and

priorities▪ Enables real-time updates and continuous improvement▪ Ensures everyone has access to the same information

SteerFrom steering information to goals▪ Ability to correct where things go wrong▪ Ability to give feedback on performance (positive and negative)▪ Ability to discuss responsibilities

12

Key Lean IT Metrics

13

Lean IT Metrics are Clearly Customer-focused

1. Lost Production Hours 2. Time to Market of Changes3. Effectiveness of Changes4. Quality of Plans5. Number of Proactive Changes

No IT OutagesQuick

Time to Market of Changes

“Maintain current functionality” “Provide new functionality” “Give advice on current and new functionality”

New Use of IT

Listen to the Voice of the Customer when choosing metrics

Customer-oriented metric: DisruptionsNo. of incidents and resolution times

Time that incidents are open

Time that IT customers cannot work

Excess cost and lost revenue

Priority Total number Average time to repair (days)

Number of users

affected

Gross lost production

days

Cost per day Dependancy Net Lost

production days Net costsCosts per day to business per incident

Total cost to the business

Critical 1042 0.7 20 14,227 € 240 50 % 7,113 € 1,707,213 5000 € 3,556,695

High 2796 5.4 10 149,634 € 240 40 % 59,853 € 14,364,817 1000 € 14,963,351

Medium 12196 10.3 4 500,948 € 240 30 % 150,284 € 36,068,234 500 € 62,618,462

Low 376 9.8 1 3,699 € 240 20 % 740 € 177,556 100 € 369,90816410 668,507 217,991 € 52,317,820 € 81,508,415

It’s about Lost Production Timenot Mean Time To Repair!

• A classic Lean process metric• Just-In-Time• Use for … everything

• “Time to Market”– Start the positive part of the

business case– Meet agreed implementation date– Work within budget– Reliability

Customer-oriented metric: Lead Time

18 21 24 27 30 33 36 39 42 450.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

Average Customer Lead Time

TotalMoving average (Total)

Internal Lean IT metrics: Time

Time is IT’s primary production factor

Key Metric: Earning Capacity Analysis

Internal Lean IT metrics: Delivery

DevOps is the ultimate search for FLOW within IT

Key Metric: Release Frequency

18 20 22 24 26 28 30 32 34 36 38 40 42 44 460

10

20

30

40

50

60

70

80

Number of Story Points per week

TotalMoving average (Total)

Bringing the Metrics Together: The KPI Tree

19

Getting Metrics To Work

20

Measuring is Not as Easy as it Seems

Pitfalls of Metrics• Spending insufficient time on defining metrics• Focusing on the numbers and not on what the

numbers are trying to tell you• Steering on individual scores rather than the

trend• Creating ‘insignificant’ metrics• Always test metrics against Lean Principles

Measurement Do's and Don’ts

22

• Do not assume that a measurement measures what people say it measures

– Describe the purpose of the measurement• Clearly define the things you want to measure

– Ensure the measurement process is accurate and precise enough for the purpose

– Ensure the measurement is trusted and that its quality is constant

– Define the population you are measuring– State when measurement starts and ends

• Use tools to reduce errors

You ALWAYS need to explain a measurement.

No measurement is self-explanatory.

Getting Metrics to Work: DefinitionKPI : Lead time

Formula:Lead time• Date/time customer submits the request (in Service Now: field

“Open Date”) subtracted from the date/time the request is fulfilled (in Service Now: field “Actual Close Date”. This gives the Lead time.

• For each type of unit of work, the average lead time is calculated per week.

.

Issues (Ways in which the KPI can be 'gamed'): • Incorrect registration of stories and tickets may lead to an incorrect view of

lead time performance.• Requests are not registered at all, meaning no data is available

Frequency of reporting:WeeklyData should be updated on a daily basis, or be available realtime

Measurement Accuracy1 decimal

Data collection process: - Extract data (see formula) from ServiceNow (separate files)

- Stories from Backlog section - Tickets from Risk section

- Load into Excel- Calculate Lead Time according to formula- Present data as a time series chart showing at least the last 16 weeks

with a 4-period moving average trendline

KPI owner:RS MT

Category: process, customer

Definition: Measure the lead time of all units of work in order to understand where improvements in processes can be made to decrease lead time

Unit of measurement (%, number, index)- Number

Level at which the performance indicator is used:RS MT, teams

Goal: To influence behaviour towards ensuring that customers get the value they have requested as quickly as possible

Getting Metrics to Work: Key Steps

Defining and measuring metrics• Use the KPI card• Start with a quick measurement, automate later• Learn to work with the metric

Using metrics• Focus on the behavior you want to change• Lean IT metrics lead to action• Integrate metrics into your visual management

Setting goals• Leadership team of IT is responsible for setting the

direction • Identify the aspects of strategy you want to measure

Want to Learn More About How Metrics fit into Lean IT?

25

Contact Us

Niels LoaderPartner Quint Wellington Redwood, LITA Lead Author Courseware Development

n.loader@quintgroup.com

 

Deborah Burton Marketing LeadLean IT Association (LITA)

deborah.burton@leanitassociation.com

Experience Lean IT in Action

We believe that “Lean Thinking” should be an integral part of every Enterprise IT organization and also every IT professional’s toolkit.

Lean thinking is about understanding how to assess business processes, to identify and eliminate waste. Today, many IT professionals stakeholders from cross-functional areas -operational, tactical and strategic — have or are planning to get certified in Lean IT with the objective of reducing waste and improving efficiency.

27

Become a LITA Training Partner

Watch the webinar recording

Webinar Recording

Measuring Success in the Lean IT World

Thank you!