This is a presentation I gave to the Ohio Valley LIG of the Service Management Forum in April of 2010. I focused the presentation on three main themes: 1) The refinement or removal of non value-added processes in IT (the "big" idea of Lean IT) 2) The institution of metrics (if you don't know where you are now, how do you know where you're going in the future?) 3) The enhancement of communications (manage projects throughout their lifecycle using normalized interfaces)

1. Presented by Matt Blair
MSISA, Dir. of Prof. Development
Indiana University

2. Agenda
1 Overview of Lean IT
• Impacts many internal and external customers of the IT value-stream.
• Cuts back the waste of outgrown information technology
2 Benefits of Lean IT
• Allows delivery of a more efficient, higher-quality product.
• Promotes companies’ CMMI, pushing for more efficient approaches.
3 Example of Implementing Lean IT
• Integrates IT resources more evenly within a company.
• Refines corporate governance to formalize processes.
4 Next Steps
• Take Advantage of a widely-accepted, repeatable process.
LEAN IT
• Reference additional resources for deeper research.
Overview Benefits Example Next Steps

3. Lean IT Impacts many Internal and External
Customers of the IT Value-Stream
BUSINESS
PRIMARY VALUE STREAMS
Supply Chain
E-Commerce
Manufacturing
IT SERVICE
SECONDARY VALUE STREAMS
Application Perf. Management
FINANCE SUPPORT
Data Backup
HR PROD. Service Catalog
LOGISTICS
By mapping the interactions of the
business between value streams,
analysts can determine which processes
LEAN IT
do not add value to the final product, and
therefore should be removed.
Overview Benefits Example Next Steps

4. Lean IT Cuts Back the Waste of Outgrown
Information Technology
Overproduction /
Rework Wasted Motion
Overprocessing
• Early fulfillment of requests • Changes in business requirements • Unprioritized task processing
• Unnecessary functionality • Application bugs, errors • Unplanned task switching
Wasted Inventory Wasted Time Wasted Intellect
• Maintenance backlogs • Key resources aren’t available • Limited cross-training
• Partially completed requests • Idle developers • Poor usage of resources
Non-Value Added Motion / Repeat
Processing Problems
LEAN IT
• Anchoring to out-of-date processes • Ignoring foundational errors
• Unnecessary documentation • Trading off for short-term gains
Overview Benefits Example Next Steps http://www.mckinsey.de

5. Lean IT allows you to Deliver a More Efficient,
Higher Quality Product
TIME-TO-MARKET PRODUCT QUALITY COST of RESOURCES
 Efficient processes lead  Decreased errors  More effective use of
to faster turnaround. provides a higher quality resources leads to
 Increased agility makes it product, increasing brand increased availability.
easier to respond to market reputation.  Less paperwork leads to
needs.  Straightforward process less working hours and
 Competitive edge helps design eases lesser staffing needs.
companies stay ahead of manufacturing woes.
competition.
By enhancing the repeatability of IT
processes, organizations can leverage
added efficiencies for more effective
resources to generate a higher quality output.
LEAN IT
Overview Benefits Example Next Steps

6. Organizations and Processes with Low CMMI’s can
Experience the Most Benefits
Lean initiatives can
• Organizational innovation & deployment
advance organizations Optimized • Causal analysis and resolution
with lower maturities to
refine processes and
progress their maturity.
Quantitatively • Highly repeatable processes
Managed • Performance measurement, benchmarking
• Process standardization
Defined • Infrastructure integration
• Focus on process enhancement
Process integration through the
• Agreements and vendor contracts use of standardized interfaces
Managed • Project planning, requirements management increases cross-division
interaction.
Lean documentation makes
LEAN IT
• Unpredictable processes maintenance more direct,
Initial • Reactive support, poorly controlled allowing more time to be spent on
prescriptive development.
Overview Benefits Example Next Steps http://www.wikipedia.com

7. Application Maintenance and Development is a
High-Risk Area of the IT Value-Chain
The Relative Cost of Correcting Errors
found in Different Development Stages
80x -- 80x
Relative Cost to Fix Defect
The frequency of errors can
be minimized through
requirement confirmation, The cost of correcting an -- 60x
(multiplier)
iteration and passing error increases as a product
procedural gates. progresses through the
application development -- 40x
lifecycle.
By focusing on the 15x -- 20x
foundations of
requirements, errors can be 2x 8x
addressed before they are 0x
designed, tested and deployed
prior to being confirmed.
LEAN IT
Overview Benefits Example Next Steps

8. Integrate Segments of the Application Development
Process with Collaborative Tools
Requirements Software
Analyst Architecture
Designer
Tool integration increases
interaction between
otherwise de-normalized
segments of the development Change
Documentation Environment
Project
process, ensuring consistent Manager Implementer
communication.
Quality Mgmt System
LEAN IT
Testing Enterprise Architecture
Tester Architect
Overview Benefits Example Next Steps http://www.ibm.com/software/awdtools/rup/

9. Refine Corporate Governance to Formalize
Processes
Application maintenance % of Total Time Spent in Processes
contributes to process
inefficiencies because of A US Bank A European Retailer
the misalignment of project
goals and documentation App.
35 65 45 65
requirements. Maintenance
App.
25 35 30 35
Development
By decreasing
administrative work and Total 60 100 75 100
increasing processing
power, companies have -40 -25
seen large reductions in
resource consumption.
LEAN IT
Overview Benefits Example Next Steps http://www.mckinsey.de

10. Take Advantage of Universally Repeatable
Processes
Move development to an
organization with core
competency to increase
production efficiency.
Design Test Deployment
Company Customer
Offshore/
Outsource
Requirements Use
Standardized, well-known Pass a higher quality product
documentation makes it onto the customer for actual
LEAN IT
easy to push defined use, increasing value for the
requirements to an outside end-user.
party for development.
Overview Benefits Example Next Steps

11. Many Resources are Available for Baselines and
Further Research
Best Practices /
Process Improvement
Methodologies
Six Sigma ITIL
Application Focuses on the cause of Illustrates concepts and
Development defects, rather than process policies for recommended
duration minimalization. Applies approaches to IT management.
Agile / Lean statistical management to Used to help progress
maximize product quality. organization’s technological
Emphasizes the use of CMMI,
maturity.
RUP and PMBOK to increase
multidisciplinary communication
and decrease setup time for CMMI COBIT
projects.
Pushes for process Best practices for IT
improvement through management to match metrics
maturitization of projects or with processes to achieve
divisions. Doesn’t directly compliance and maximize return
address the impact of waste. on investment.
LEAN IT
Overview Benefits Example Next Steps