a lean production project in software development at almaviva - lean it summit 2014

C o m p a n y P r o f i l e

P r o v i d i n g S o l u t i o n s

Information & Communication Technology Group

Our mission

To develop solutions capable of upgrading the operating systems and processes of

government entities and private businesses, to help them improve the services they

offer and meet the needs of a continuously evolving market

President: Alberto Tripi

CEO: Marco Tripi

About us AlmavivA Group is Italy's number one Information & Communication Technology

provider, with a longstanding experience and in-depth knowledge and understanding

of the public and private sector markets we specialize in. Operating as a global

organization, AlmavivA Group has 38 offices in Italy, 16 abroad and employs 32.500

people, also in Brazil, Tunisia and China.

The Group offering includes ICT services and solutions based on Cloud Computing

and the Outsourcing of CRM services, using cutting-edge technologies capable of

ensuring excellence in CRM 3.0 and Big Data & Advanced Analytics solutions for the

management and enhancement of information.

The research and testing of new technologies with our international partners is at the

core of AlmavivA's success.


38 offices

14 offices

in Italy

in Brazil

in Tunisia

in China

1 office

1 office

Where we are


1 office in U.S.A.

Our Companies

Almawave and Almawave do Brasil

govern the technologies underlying the

current drivers of change: mobile,

social, cloud and big data. The two

companies develop technological

solutions for the real-time analysis and

understanding of large volumes of

destructured and highly volatile data of

various kinds, coming from a range of

sources, for the strategic and

operational valorization of information

captured by businesses and from

customer relations, offering a unique

model of «shared Intelligence».

MARKETS

Government, Banks & Insurance,

Media, Transportation & Logistics,

Finance, Tlc.

HR 2013: 166 (*)

REVENUE 2013: 14 MLN € (**)

AlmavivA Contact is a market leader in

Italy, catering to private organizations

and public entities for the outsourced

delivery of CRM services, using

innovative technologies capable of

ensuring excellence in CRM 3.0.

AlmavivA Contact, AlmavivA do Brasil,

AlmavivA Tunisie and Lit manage

inbound and outbound Customer Care

services to support clients in developing

a successful Customer Experience

strategy, based on Almawave cutting-

edge semantic technologies for

recognizing natural language.

MARKETS

Banks & Insurance, Media,

Government, Tlc, Transportation &

Logistics.

HR 2012: 28.661 (*)

REVENUE 2012: 371 MLN € (**)

A longstanding partner to the main central

government agencies, AlmavivA supports

the country's key digitization and

technological Innovation projects and

processes. AlmavivA upgrades and

integrates complex systems with

emerging technologies, through software

development services and processes of

excellence and cloud computing.

AlmavivA also provides an impressive all-

round offering of IT services, based on

certified infrastructures and unique

competences, which enable the company

to ensure service continuity, privacy and

data security.

MARKETS

Agriculture, Banks & Insurance,

Homeland Security & Protection,

Government, Tlc, Transportation &

Logistics, Utilities.

HR 2013: 3.119 (*)

REVENUE 2013: 329 MLN € (**)


(*) Figures at 31 December 2013

(**) Company revenue calculated gross of intercompany transactions

Competence Centers

CRM

Project Management

Information Discovery & Advanced

Analytics

Service Oriented Architecture

Java, Microsoft.NET, Opensource

Information Security

Portal Development e WEB 2.0

Document & Data Management

Monetica & Payments

Mobile Solutions

Energy Management

Command & Control Integrated

Systems

Surveillance Integrated Systems

IT Biometrics Solutions

SAP

CE

RT

IFIC

AT

ION

S

CO

MP

ET

EN

CE

CE

NT

ER

S


Our strong points

Certifications

EN UNI 15838

ISO 9001

ISO 27001

ISO 20000

ISO 14001

AQAP 2110/AQAP 160

CMMI ML3


Offering guidelines

ICT Services

Cloud computing

CRM 3.0

Big Data &

Advanced Analytics

Markets

Software development - ICT outsourcing -

Application and Infrastructure management - Service assurance

Hosting on cloud - Application Services on cloud - Security -

Virtualization & Consolidation - IT Infrastructure

Consulting and process reengineering -

Inbound and Outbound Services -

Back Office & Document Management - Market Analysis -

Adaptive Front/end - Multichannel Customer Solutions -

Case Management & Quality Monitoring

Business Data Management - Enterprise Knowledge Solutions -

Semantic Solutions & Speech Recognition -

Business Intelligence 2.0 - Data Science - Predictive Analytics

Homeland Security

& Protection

Banks

& Insurance

Transportation

& Logistics Telco, Energy

& Services Healthcare

Central

Gov

Local

Gov Agriculture

Lean Production Project

P r o v i d i n g S o l u t i o n s


OPERATIONS

INFRASTRUCTURE AND

APPLICATION SERVICES

SW Engineering

SW Development Model


OPERATIONS INFRASTRUCTURE AND APPLICATION SERVICES

Transportation Global

Outsourcing

Market Global Outsourcing

Managed Operations

Software Engineering

Application Maintenance

Services

Functional Competence Centers

Company IT Systems Management (HRM, PayRoll, Financial & Accounting Management, ..)

INFRASTRUCTURE SERVICES APPLICATION SERVICES

Technical bid management

S e

c u

r i

t y

P r

a c

t i

c e

Central & Local Government, Financial Services, Telco, Utilities, Manufactoring, Retail, Transportation

BUSINESS UNITS

I n n

o v

a t

i o

n

OPERATIONS INFRASTRUCTURE AND APPLICATION SERVICES


SW ENGINEERING (*)

(*) more than SIX hundred people

SW Engineering - Development Model


MISSION

Knowledge

Development &

Transfer

Innovation

Prototyping

Building Blocks

CMMI

(Lev.3)

MISSION

OPTIMIZE:

Quality

Time to Market

Cost

10

Technical Competence Center

competence center 1

competence center ..

competence center n

Solution Competence Center

competence center 1

competence center ..

competence center n

STAFFING

SOFTWARE DEVELOPMENT & TEST LAB

SW DEVELOPMENT & MANAGEMENT TOOLS

Work Packages Development

Test Lab

Delivery

Management

KPI

INFRASTRUCTURE AND

APPLICATION SERVICES

SW Engineering

Lean Production Project


12

BUSINESS DRIVERS

The Market Value of SW Development is rapidly decreasing

Quality Level and Time to Market are crucial for Customer Loyalty and for Company’s market share and Company’s reputation

Labour cost is a constraint, to maintain profitability we should increase productivity

OPERATIONAL TARGETS

Customer Satisfaction

Increased quality

Compliance with the plan baseline

Increased productivity

Lean Production Project: Business Drivers and Goals


Lean Production Project: Actions, Context, Roadmap

13

Actions Adopt Lean Production in order to increase SW quality and customer

satisfaction (external goals) and to reduce waste and losses (internal goals)

Context Operations – Application Services SW Development


14

The Almaviva Lean Production Project is very ambitious because of the complexity and the extent of the adoption field.

The project approach is based on the paradigm “Train the Trainer”: the focus is on people coaching – both operational teams and internal lean staff

Lean Production Project: Adoption Strategy

Phase 1 3 IT projects

10 people

8 weeks

Phase 0 Assessment

3 weeks

Kick off Project Review Workshop

Go/NoGo Go/NoGo

Phase 2 Large Adoption

100 people – 40.000 FP

FY14 2Q 3Q 4Q


15

Context: 3 projects – about 1,000 FP(*)

Lean Production Project: Assessment Step

(*) A Function Point is a unit of measurement to express the amount of business functionality an information system provides to a user. Function points measure software size.

Assessment Step has allowed to: Highlight the specific context of application and technology Identify the categories of problems and issues Define the KPIs Detect the level of customer satisfaction (Voice of Customer) Implement the first field observations Start training the first two internal lean experts


10 people

8 weeks

Phase 0 Assessment

3 weeks

Kick off

Project Review Workshop


100 people – 40.000 FP

FY14 2Q 3Q 4Q

September 2013


16

Lean Production Project: Assessment Step

Main findings:

Performance levels and targets not known by the teams and team leaders

Projects managed based on estimated completion percentages that are very distant from reality

Very large number of obstacles faced by developers and analysts in their day to day work


Effort

Necessary No Value

Added Activity

WASTE TIME

Development TIME

BUGS FIXING TIME

17

Planning Measurement Reporting HRM …

Broken production flow Transmission of defects from one stage to the next Downtime due to the unavailability/inadequacy of

work tools and equipment Lack of technical skills related to this specific work

environment …

Errors caught in user acceptance testing

Bugs found in production

Lean Production Project: Assessment Step Improvement Targets

ADDED VALUE TIME

12% Information & Communication Technology Group

Effort

Development TIME

18

Optimize necessary activities

Reduce Waste

Increase the net value share of development time

Lean Production Project: Assessment Step Improvement Targets

ADDED VALUE TIME


Necessary No Value

Added Activity

Reduce Bugs & Defects

BUGS FIXING TIME

WASTE TIME

19

Project People FP

Project 1 6 480

Project 2 2 140

Project 3 3 310

TOTALE 11 930

ACTIVITIES

Using Visual Management for Problem Management and Problem Solving

Defining and implementing metrics for measuring and monitoring the Value Stream

Identifying: • improvement areas, • efficiency enhancement actions • optimization of production processes

Team leaders and team workers coaching

Lean Production Project: Phase 1 - 3 IT Projects


10 people

8 weeks

Phase 0 Assessment

3 weeks

Kick off



100 people – 40.000 FP

FY14 2Q 3Q 4Q

December 2013


20


1. Clarify the operational challenge

Setup internal weekly

releases

Adjust production plans

4-6 month project

Weekly releases Make team daily goals clear

Create a visual environment to reveal problems

Daily meetings Daily goals

Problem solving (PDCA)


21


2. Solve information transfer problems

Make problems visible

(« red » bins)

Study concrete examples

Specification transfer sessions

with checklist

Entire days lost by developers searching for missing information in specifications


22


3. Solve development problems

Standards / on the job training for frequent

technical tasks

Lack of knowledge of the specific technical environment

by the developers

Very slow change/compile/test

cycle time

Application server

Business logic

DB Access

EJB

Application server

EJB Business logic

DB access

Need to restart the application Server after each code change (3 min)

The business logic can be tested in a few seconds


23


4. Involve management

Sponsor interventions and Gemba visits in order to clarify the challenge and create a trust relationship with and within the team:

Focusing on enterprise business drivers and understanding together the team challenge

Paying attention to team issues: Supporting lack of competencies with specific training Regulating knowledge transfer from seniors to juniors with the

«question time» Finding better team mix Observing and understanding real workloads

Paying attention to workplace and tools: Finding ways to speed up developer workstations Fixing severe air conditioning problems to improve working

environment Co-locating teams to improve teamwork


INDIRECT OUTCOMES (SIDE BENEFITS) The 3 Project Teams have increased awareness of the overall application

architectures The 3 Project Teams highlighted to Systems and Network Administrators

the opportunity of improving the performance by different configuration choices for DBMS, middleware and network resources

Project FP/g/p Start

FP/g/p TARGET

FP/g/p AT THE END OF PHASE 1

Project 1 0,5 3

Project 2 1,8 3

Project 3 1,6 3

24

Lean Production Project: Phase 1 - OUTCOMES

1

+ 100% That’s OK but not yet Goal

3,2 + 78% Goal !

3 + 88% Goal !

DIRECT BENEFITS


The evidences and the outcomes of Pilot Phase and Phase 1 were discussed with Top Management in Project Review Meeting.

On the basis of these results, the Board decided to continue with Phase 2 of Lean Production Project, involving about 100 employees in the rest of FY2014 , for a total estimated production of approximately 40,000 Function Points.

Lean Production Project: Adoption Strategy Phase 2 - Scenario FY 2014


10 people

8 weeks

Phase 0 Assessment

3 weeks

Kick off


Go/NoGo Go/NoGo


100 people – 40.000 FP

FY14 2Q 3Q 4Q


25


26

CONFIDENTIAL

Lean Production Project: Adoption Strategy Phase 2 – Project Goals

Reduce waste time

Reduce errors and defects

Reduce time to market

Increase Value Added Time, i.e. more Function Points delivered per working time unit (man/day)

Decrease FP unit cost Reduce total number of workers for a

given amount of FP Increase Customer Satisfaction

1,8 FP/man/day to 3 FP/man/day

Reduce unit FP cost by 30%

Free approximately 20 FTE that can be used to develop new projects or to replace external resources

Win the tender for the new contract

27

Lean Production Project: Phase 2 – Large adoption

Deploy at the SW factory level

Deploy the new production approach

Factory-level performance management

Problem solving for factory manager and

all team leaders

Weekly reviews and problem solving coaching by the factory manager and all team leaders

Weekly internal releases

Visual management Problem solving

+



28 CONFIDENTIAL

Lean Production Project: Adoption Strategy Phase 2 – August 2014: Results

SW Factory productivity

FY 2013

FY 2014 (Lean)

22 workers left the project due to the increase of productivity

Lean Production Project: Adoption Strategy Phase 2 – August 2014: Results

They were all reallocated to other projects or services

No «Victims», No «Collateral Damages»

TRUST & ENDORSEMENT


30

CONFIDENTIAL

Lean Production Project: Adoption Strategy Phase 2 – August 2014: Actuals

… and last but not least:

We won the tender for the new 2 year contract

31

AlmavivA Lean Production Project was born from clear, compelling and widely shared Business Drivers.

It is not an "ideological" project, because it is based on a heuristic approach:

A first phase of evaluation of the specific needs in the context of our SW Application Lifecycle

A subsequent pilot phase, which enabled us to better understand operational objectives and specific measures of our reality

An experimental phase of full implementation of the Lean approach in three heterogeneous SW development projects

Each of these phases was concluded with a discussion of the project outcomes with corporate stakeholders and decision-making, and with an assessment step on the opportunities and usefulness of continuing the project.

Lean Production Project: Lesson Learned (1/2)


32

The evidence of the steps carried out so far are very encouraging, both in terms of improvement results achieved, and in terms of motivation of the operational teams involved in the project.

The challenge that the project involves is hard, because it requires a change of culture and vision which covers all company roles involved in the production process.

The commitment of the Company Top Management is not important, it is crucial. Without the conviction and determination of the management and corporate stakeholders, the project would have had no chance of success.

Last but not least: this is not a "one shot" initiative, it is a journey of continuous improvement, and search for production process quality targets increasingly challenging.

Lean Production Project: Lesson Learned (2/2)


www.almaviva.it

Via di Casal Boccone, 188 – 190

00137 Roma

Italia
