My view on Lean IT

Organization Name | Group Name

Lean IT: Separates Added Value from WasteEvgeny Nedelko, April 2012

Copyright © 2011-2012 Accenture All rights reserved.

Lean IT: Separates Added Value from Waste

The goal of any organization is to bring more value for its customers at less costs

All widely recognized IT frameworks (ITIL, RUP, Agile, CMMI, ADM) say HOW to deliver IT projects, but don’t say WHY

Lean Six Sigma says WHY, but most of its tools are not applicable for project activities, which are highly variable in their nature

Lean IT provides a clear connection between Value for end customer and day to day work and it is designed to handle uncertainty of individual projects

Lean IT is based on 13 principles of Toyota Product Development system and bounds together Lean Six Sigma tools with traditional Agile development and Service delivery (ITIL) methodologies

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What is Lean Six Sigma?

Six SigmaStatistically proven process capability

LeanFocus on capabilities of the people in the

process

Definition of strategic areas for continuous improvement of business operations

A toolset and methodology for individual process improvements

Common principles and

scientific foundation

Joseph M. Juran W. Edwards Deming

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History of Lean IT

1890’s Frederick W. Taylor – Scientific Management

1910’s Henry Ford and Charles Sorensen – Ford System (Mass Production)

1920’s Walter Shewhart (Bell Laboratories)– Statistical Process Control

1950’s W. Edwards Deming teaches Statistics in Japan

1950’s Joseph M. Juran teaches Management in Japan

1948-75 Taichii Ohno and Shigeo Shingo – Toyota Production System

1984 Eliyahu M. Goldratt – Theory of Constraints

1986 W. Edwards Deming – Total Quality Management

1987 Mikel Harry (Motorola) – Six Sigma

1991 James P. Womack, Daniel T. Jones, Daniel Roos

– Lean Production

2003 Mary and Tom Poppendieck – Lean Software Development

2011 Steve Bell and Mike Orzen – Lean IT

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Agenda

· Recognise the Customer Value

· Build the Culture of Learning

· Just-in-Time Delivery

· Other Tools

– Appendix: Thirteen LPD Principles

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Recognise the Customer Value


Enterprise Systems:• Have a purpose to improve

business operations

• Usually are delivered and maintained by IT department

• Product specification is driven by business users

• Customised to company needs or custom built by request

Infrastructure and Telecoms:• Required to support current

business operations without clear business value

• If there is no infrastructure – there are no business operations

• Procured with minimal customisation from a vendor

• Product specification is driven by Vendor’s marketing or product development department

Two kinds of IT Services

The main focus of this presentation

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“Step 0” – Identify Your Customer

Purpose of Lean – To maximise value for customer while minimising the costs, thus the cornerstone of Lean is Customer

In IT there is a hierarchy of customers with their own needs– Other IT Units– Business Users– End Customers of the company

Example Voice of Customer*:– End customers want a stable quality service provided by the

company, with no interruptions during business hours

– Business users need a stable system, that would not require a support from IT and all potential problems foreseen and prevented.

– Many users want to be able to solve simple incidents by themselves with guidance of FAQ and Knowledge base, and look for a friendly guidance from Service Desk on more complex issues

– They want their issues to be solved after first call at clear timeframe,without need to push or spend their own time on technical decisions

– “Don’t get me to help you, I want you to help me!”*Adapted from Lean IT (Mike Orzen, Steve Bell), Lean Solutions (Jim Womack and Don Jones) and Sense and Response (Stephen Parry)

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IT

Business

Business Benefits

Costs and Benefits of an Enterprise System

Below are the typical costs and benefits for an business IT system

DemandFunctional Gaps, Defects

Propagated Errors

Work

aro

un

d

Rele

ase

Fix

Diagnose

Incident

Solve problem

Preventive Maintenance

Req

uest

Req

uest

Benefits / Value Costs / Waste

Act

ual

Benefits

Ori

gin

al Est

imati

on

of

Ben

efits

Tech

nic

al D

ebt

Specifyneed Gaps, Defects

Legend

Implement Solution

Rele

ase

Improvement

Implement Solution

Cost reduction

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There are direct benefits:• automation of work reduces

need for manual operation• improving quality of

manufacturing process reduces scrape and use of materials

• better control of finances reduces write-offs and other loss

and indirect benefits:• appealing user interface

expands the customer loyalty• better control of risks reduces

potential loss and reputation• better information

management improves quality of overall management in organisation

Examples of Benefits

The result of process automation should not be staff reduction, but more time to think how to serve clients better

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These could be direct costs:• business outage due to system

unavailability• loss due to incorrect system

behaviour• extra costs required for system

modification due to complicated design

• cost of regression testing

and indirect costs:• impact on reputation • operational risks• human errors that could be

prevented by software• training costs required for new

users

Examples of Costs

In most of the cases the cost of system implementation can be reduced, but an impact on operational (running) costs is inevitableTechnical debt is costs that are imposed by the system

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Build the Culture of Learning


Relentless Learning and Improvement

System implementation projects are unique in their nature. Even when you have a plan, you cannot say whether you run itin the most efficient way before you try. That is why it is so important to build learning cycles into your delivery.

Make sure you not only “Plan what you do and Do what you plan”You should also Check the results and Act accordingly

To err is human, but not to learn from mistakes is a crime

Vivek Nayer

Plan

Check

Act Do

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Front-load the Development Process

The main waste in any process is rework – developing system that needs to be corrected due to error or design flaw• To prevent this - all alternatives should be identified as

soon as possible to allow enough time for evaluation of options and to identify possible constraints before completing dependent tasks

• Work on alternatives – as SOON as possible• Make a choice – as LATE as possible

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Short Iterations

In quickly developing organisation requirements and priorities change quickly due to changing market conditions and learning process and better understanding overtime

• 30% of change requests lose their priority and 10% can get new requirements after one quarter

– This means that 25-65% of original system features become irrelevant for client after one year of implementation

– This is probably one of the main reason why so many long term projects fail to deliver satisfactory results

• Therefore it’s important to present the system to client as often as it is possible and to adjust plans according to the feedback

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Standardise Work Items and Steps

It is impossible to distinguish waste from value in the process before you identify the sequence of steps performed to achieve expected results

• Always plan a project• Define a workflow for user

requests• There are standard steps even

for casual tasks (define what needs to be done, assign the responsible, do the task, validate the result)

When you split your project delivery into a set of similar steps it becomes possible to compare results of individual iterations and identify repeatable problems

• In Agile development, Project iterations (sprints) take 1 or 2 weeks permitting to collect lessons learned often enough to identify issues long before they become a real problem

• In Scrum, daily meetings permit to reduce learning cycle to one day

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Knowledge Management Tools

– Supplier technology demonstrations

– Competitor teardown analysis

– Checklists and quality matrices

– Learning focused problem solving

– Know-how database

– Lessons learned events (Hansei)

– Program manager conferences

– Business Revolution Teams

– On the job trainings skill matrix, learning focused career paths

– Resident Engineers (RE)

Adapted from The Toyota Product Development System, (James M. Morgan and Jeffrey K. Liker)

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Just-in-Time Delivery


Kanban

Whatever planning technique is used to forecast workload of functional groups in the project, there are inevitable variation causing delays, when one group waits for output from another, and when a group has not enough capacity to handle all incoming tasks

Kanban ( 看板 ), is the concept of Just-In-Time production, when centralized end-to-end planning is replaced with individual tasks flowing through the process, and controlled centrally

Pulling knowledge through the process flow

Customers Group

Support EngineersTestersDevelopersDesigners

Project Manager / Chief Engineer

pull pull pull pull

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Alignment through Visual Communication

Visual communication is much more effective than verbal communication, even though it takes more efforts

• Visual boards are used– To define and demonstrate tasks and their priorities– To present current results (plan/fact)– To promote overall goals– To provide feedback to team members

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Leveled Process Flow

When you have your process flow defined you can see the bottlenecks and remove them (i.e. level the process)

Uneven load on functional groups can be identified and then mitigated by a bench of temporary resources (contractors) preselected, but not hired until actual need for extra people

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Integrate Suppliers into the Quality System

If you take look on the end-to-end value stream for IT you see that it starts from suppliers and finishes at the end customer of the company

To remove waste from the flow you need to start from the waste delivered by supplier, which means that you cannot improve your process excluding suppliers from scope

Suppliers Waste IT Waste

Business Departmen

tsWaste

End Customer

Value Value Value

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Customers Group

Customers Group

Customers Group







Analysis Lead Development Lead Testing Lead Support Lead

Organisational Matrix

While functional teams balance resources, take care of their people and best results for each process step, the Project manager as a Customer’s advocate pulls all requested changes through the process flow

This matrix create two career paths – for Experts in functional teams and Managers serving customer groups

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Organise to Balance the Matrix

One of the most typical problem in IT organisations is silo thinking. There are Developers who don’t care of User support, there are User support who ignore Business Analysts, Testers don’t talk to Analysts. Similarly the CRM implementation project doesn’t take care of the ERP implementation project, and IT Security don’t care of anyone at all

Lean IT says that IT management should constantly balance the project management matrix

…there should be people responsible for alignment of individual projects and…

…there should be people responsible for alignment of end-to-end delivery flow

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Other Lean Tools


Other Lean Tools

• Flow chart

• Projects Prioritisation

• Cause & Effect "Fishbone" Diagram, 5-Why Analysis

• Set-Based concurrent Engineering

• Decision Analysis and Resolution

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A3 Report is a Project Charter covering the following topics:

• Problem side (left half of a page):– Background– Voice of Customer– Current State (metrics, VSM)– Root Cause Analysis

• Solution side (right half of a page):– Project Team– Action Plan– Project Targets vs. Actuals – Effect Confirmation / Value Delivered

Principles of the A3 system:ObjectivityDistillation and visualizationResults and ProcessAlignment

A3 Reports cannot be drafted in isolation by a person working alone in their room

It’s essential that the A3 Reportshould be updated throughout the project life as long as understanding of the facts changes

A3 Thinking

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Poka-Yoke

Poka-yoke ( ポカヨケ ) is a Japanese term that means "mistake-proofing". Its purpose is to eliminate product defects by preventing, correcting, or drawing attention to human errors as they occur– Checklists– Standard, detailed test plans– Part quality matrices– Architecture patterns – Reusable components – Standardized execution processes– Test driven development

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Adapt Technology to the Problem, not the opposite

“The biggest epidemic in IT is that we routinely pick solutions that are bigger & more complex than our problems.”

Torbjörn Gyllebring

– Technologies must be seamlessly integrated– Technologies should support the process, not

drive it– Technologies should enhance people, not replace

them– Specific solution oriented: not a silver bullet– Right size – not king sized

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Appendix: Thirteen LPD Principles

1. Establish customer-defined value to separate value-added from waste.

2. Front-load the product development process to explore thoroughly alternative solutions while there is maximum design space.

3. Create a level product development process flow.

4. Utilize rigorous standardization to reduce variation, and create flexibility and predictable outcomes.

5. Develop a chief engineer system to integrate development from start to finish.

6. Organise to balance functional

expertise and cross-functional integration.

7. Develop towering competence in all engineers.

8. Fully integrate suppliers into the product development system.

9. Build in learning and continuous improvement.

10.Build a culture to support excellence and relentless improvement.

11.Adapt technologies to fit your people and process.

12.Align your organization through simple visual communication.

13.Use powerful tools for standardization and organizational learning.

As per James M. Morgan and Jeffrey K. Liker, authors of The Toyota Product Development System, Integrating People, Process and Technology (2006, Productivity Press)

Lean Product Development is driven by thirteen principles originating from Toyota PDS


Learn more

Lean Six Sigma CBT training on myLearning• https://mylearning.accenture.com/accenture/lang-en/management/

LMS_ActDetails.asp?ActId=546942

“Lean IT: Enabling and Sustaining Your Lean Transformation” by Steve Bell, and Mike Orzen (available online)• http://skillport.books24x7.com/toc.aspx?bkid=36963

“Sense and Respond: The Journey to Customer Purpose”by Stephen Parry, Sue Barlow, and Mike Faulkner• http://www.amazon.co.uk/dp/140394573X

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https://mylearning.accenture.com/accenture/lang-en/management/LMS_ActDetails.asp?ActId=546942

https://mylearning.accenture.com/accenture/lang-en/management/LMS_ActDetails.asp?ActId=546942

http://skillport.books24x7.com/toc.aspx?bkid=36963

http://www.amazon.co.uk/dp/140394573X

Your questions?