Win in the flat world: Apply lean principles across the IT organization

Lean, as a management methodology, receives wide-ranging attention for the improvements it generates. Developed by Toyota more than 40 years ago to standardize on a methodology for continuous improvement, lean has seen numerous iterations. Lean most often is defined as a systematic approach to identifying and eliminating waste (nonvalue-added activities) through continuous improvement by flowi...

By David P. Spencer, associate VP and Gerhard Plenert, Ph.D., senior principal, Infosys High Tech & Discrete Manufacturing unit November 1, 2007

Lean, as a management methodology, receives wide-ranging attention for the improvements it generates. Developed by Toyota more than 40 years ago to standardize on a methodology for continuous improvement, lean has seen numerous iterations.

Each of the processes found in Figure 1 can be subjected to a value stream mapping (VSM) exercise that allows an individual to see what is happening in the organization, and what is possible.
The objective of the VSM is to identify nonvalue-added activities that can be eliminated, with teams focused on reducing or eliminating the activities that are targeted. Often what is thought of as the value of a process is far from what can be achieved to improve overall workflow.

Lean most often is defined as a systematic approach to identifying and eliminating waste (nonvalue-added activities) through continuous improvement by flowing the product at the pull of the customer in pursuit of perfection.

While at Toyota lean is used companywide, in the U.S., its usage focuses primarily on the production floor, and least of all in the IT department.

However, we see lean as a change-management tool. Today lean is somewhat of a religious philosophy, with numerous followers—each of which strongly believes the doctrine, but with their own spin on how the doctrine should be implemented into the lives of its followers. The result is that the version of lean being used in many organizations is quite distanced from the original Toyota version.

Most adherents see their lean implementations as something “only useful for the production floor.” We see lean as a companywide tool. Across an organization, lean practices can be used in engineering, in the front and back offices, in R&D, and even in IT to improve operations by driving waste from existing environments.

Both a management philosophy and a change methodology are incorporated in lean. The management philosophy stresses the elimination of waste. Lean does not focus on making anyone work harder, or, like its Six Sigma cousin, reduce variation in vertical processes. Rather, lean focuses horizontally across the value stream of an organization. To illustrate this we need to define these concepts:

  • Value-added time: Any time spent that either changes or improves the product being made, or directly satisfies the customer.

  • Nonvalue-added time: Any time spent on activities such as communication, setup, and preparation. Specifically, the Toyota lean process defines seven “wastes” that should be identified: Motion, Processing, Transport, Excess Inventory/Backlog, Defects, Delays, and Overproduction.

  • Process: A series of activities necessary to achieve a desired outcome

  • Value Stream: A series of activities that occur as we work ourselves through a process.

The goal of lean is to eliminate waste that occurs in any process. After working with many clients in the discrete manufacturing space, experience shows that by eliminating nonvalue-added waste, it is easy to double the capacity, throughput, and output of the organization while simultaneously reducing backlogs—the inventory of IT—regardless of whether it is a single factory or an entire IT organization.

A typical IT organization can be broken down into a set of processes that support a company’s business. These processes can be further broken down into Level 1 and Level 2 processes to which the lean methodology can be applied ( see Figures 1, 2 at right ).

It is our experience that IT organizations are notorious for reinventing the wheel, with many redundant development and maintenance practices. Across all of the Non-Value Time categories, typical IT organizations provide many examples ( see Table 1 ).

Leaning on IT

There are four recommended measures that will define the success or failure of any lean activity. When specifically applied to IT, they are as follows:

  1. Cycle Time: The time it takes to run through the entire process. For example, in the Level 2 process, “Manage Requirements,” ( see Figure 1 ), documentation activities can be reduced by applying standardization techniques, resulting in an overall throughput increase and reduced cycle time.

  2. Inventory: For IT, inventory means backlog. If the backlog of work for the IT department is measured in terms of months or even years, the IT department is out of control.

  3. Value-added content: Activity that either (1) directly adds value to the final product; or (2) directly satisfies the customer. Based on this definition, some phone calls or meetings are value-added, and some are not. Code development is value-added, but discussing coding alternatives may not be—especially when the decision for these alternatives should already have been part of a standardized set. A measure of the value-added content of the value stream is good for ongoing improvement efforts. It should be treated as an internal reference point of performance improvement. The value-added content can never be declared as “good enough,” as there is always room for improvement.

  4. Throughput: The measure of on-time customer delivery on or before the customer’s original requested delivery date. From an IT perspective, this could mean anything from a business application required by the business, or a solution to a customer’s problem from its Shared Services group.

Starting with Level 2 processes, IT organizations can identify and initiate lean-related activities to improve their ability to support the overall business ( see Table 2 ).

What of “world-class”?

Lean adapts the Capability Maturity Models (CMM) commonly used in IT to define world-class status. However, a major shortcoming of CMM measures is that they don’t measure time—e.g., time to implement, time to change, cycle time for the IT process.

Lean takes the world-class characteristics of the CMM and accelerates their implementation and integration throughout the IT organization.

Finally, lean philosophy stresses not making changes based solely on financial measures. This will cause inappropriate activities to take place. Successful organizations make changes based on operational measures. When these measures perform well, the financial measures will follow suit.

For IT, this could mean these operational improvements:

  • Shortened lead time between project inception and initiation;

  • Increased on-time delivery performance;

  • Heightened customer satisfaction across business teams;

  • Better-quality products & services provided to internal and external customers;

  • Decreased cost of quality of products and services provided;

  • Reduced cycle time between project start and completion;

  • Increased capacity for other needed tasks that traditionally would be delayed;

  • Higher employee satisfaction; and

  • Lower-cost administrative processes.

Lean has a history of excellent performance results across many manufacturing-related functional areas. These results are demonstrated in both product and nonproduction environments. But lean’s capability to improve organizations shouldn’t stop in the manufacturing areas.

Given heightened product innovation challenges and the need to optimize global workforces, IT organizations must consider the improvement opportunities available to them by using lean change methodologies. It is through the use of lean that many manufacturing organizations are now finding themselves achieving world-class status in the flat world they compete in.

Superior organizations can no longer stay competitive in rapidly changing 21st century organizations without IT joining the lean continuous-improvement wave.

Nonvalue time Examples found within IT
Motion The flow and movement of individuals can be extremely inefficient. Accessibility to tools—e.g., files, documentation—can cause an IT employee to spend a lot of time walking, which is nonproductive waste. In IT we also find inefficient “movement” of data within the “system.”
Processing The big problem in this area is a lack of standardization. A lot of time is spent reinventing the wheel. There are a lot of similar activities and the lead time (set-up time) for reinventing the process of doing these activities can be eliminated.
Transport Transport in IT equates to the amount of time it takes to navigate through a series of applications to accomplish a highly repetitive task. For instance, this can show up within internal support systems.
Excess inventory/backlog In IT, inventory is backlog. What we find is that the workload throughout the organization is not evenly distributed. Rather, it is assigned by some predefined “area of responsibility.” The result is some individuals have enormous backlogs while others have very little. Backlog is expensive in that it equates to reduced results and lost revenue. Often this is seen in documentation reviews, support team queues, and development projects not able to be initiated due to resource (money, people) constraints.
Defects Defects in IT occur in both the area of bad code, and in inadequate documentation. The question to ask is, “Does the product being delivered (including the documentation) satisfy the needs of the customer?”
Delays Delays occur between activities—for example, between coding and testing, or between test and documentation. This is waste that increases total cycle time.
Overproduction Overproduction is where “just in case” work is done in anticipation of some upcoming event. In IT, this occurs when there is some “downtime,” and we feel the need to keep people busy, so we have them generate documentation, or code some mini-systems that in the end will never be used. Lean thinking would suggest that it is better to not use resources than to waste them on nonvalue-added efforts.

Lean measures IT process area 1 IT process area 2
Cycle time All Level 1 processes Business assessment
Discover and evaluate opportunities
Application maintenance
Review project architecture
Manage strategic sourcing model
Inventory All Level 1 processes Design
Application maintenance
Value-added content All Level 1 processes All Level 2 processes can have waste in their methodology and procedures.
Throughput Deliver business solutions Deployment/post-implementation
Operate business systems Application maintenance
Manage IT architecture Manage business systems performance
Client support
Production systems support
Post-project auditing
System sunsetting
Manage application architecture
Integrate emerging technology
Manage suppliers
Resources planning

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