Presented by Matt BlairMSISA, Dir. of Prof. Development

Indiana University

Agenda

Overview of Lean IT• Impacts many internal and external customers of the IT value-stream.• Cuts back the waste of outgrown information technology

Benefits of Lean IT• Allows delivery of a more efficient, higher-quality product.• Promotes companies’ CMMI, pushing for more efficient approaches.

Example of Implementing Lean IT• Integrates IT resources more evenly within a company.• Refines corporate governance to formalize processes.

Next Steps• Take Advantage of a widely-accepted, repeatable process.• Reference additional resources for deeper research.

1

2

3

4

Overview Benefits Example Next Steps

LEA

N IT

Lean IT Impacts many Internal and External Customers of the IT Value-Stream

Overview Benefits Example Next Steps

FINANCE SUPPORT

HR PROD.

LOGISTICS

PRIMARY VALUE STREAMSSupply ChainE-CommerceManufacturing

PRIMARY VALUE STREAMSSupply ChainE-CommerceManufacturing

IT S

ERVI

CE

B

USI

NES

S

SECONDARY VALUE STREAMSApplication Perf. Management

Data BackupService Catalog

SECONDARY VALUE STREAMSApplication Perf. Management

Data BackupService Catalog

By mapping the interactions of the business between value streams,

analysts can determine which processes do not add value to the final product, and

therefore should be removed.

By mapping the interactions of the business between value streams,

analysts can determine which processes do not add value to the final product, and

therefore should be removed.

LEA

N IT

Lean IT Cuts Back the Waste of Outgrown Information Technology

Overview Benefits Example Next Steps

• Maintenance backlogs• Partially completed requests

Wasted InventoryWasted Inventory

• Key resources aren’t available• Idle developers

Wasted TimeWasted Time

• Limited cross-training• Poor usage of resources

Wasted IntellectWasted Intellect

• Early fulfillment of requests• Unnecessary functionality

Overproduction / OverprocessingOverproduction / Overprocessing

• Changes in business requirements• Application bugs, errors

ReworkRework

• Unprioritized task processing• Unplanned task switching

Wasted MotionWasted Motion

• Ignoring foundational errors• Trading off for short-term gains

Motion / Repeat Problems

Motion / Repeat Problems

• Anchoring to out-of-date processes• Unnecessary documentation

Non-Value Added Processing

Non-Value Added Processing

http://www.mckinsey.de

LEA

N IT

Lean IT allows you to Deliver a More Efficient, Higher Quality Product

Overview Benefits Example Next Steps

LEA

N IT

TIME-TO-MARKET

By enhancing the repeatability of IT processes, organizations can leverage

added efficiencies for more effective resources to generate a higher quality output.

By enhancing the repeatability of IT processes, organizations can leverage

added efficiencies for more effective resources to generate a higher quality output.

Efficient processes lead to faster turnaround.

Increased agility makes it easier to respond to market needs.

Competitive edge helps companies stay ahead of competition.

PRODUCT QUALITY

Decreased errorsprovides a higher quality product, increasing brand reputation.

Straightforward process design eases manufacturing woes.

COST of RESOURCES

More effective use of resources leads to increased availability.

Less paperwork leads to less working hours and lesser staffing needs.

Organizations and Processes with Low CMMI’s can Experience the Most Benefits

Overview Benefits Example Next Steps

Initial • Unpredictable processes• Reactive support, poorly controlled

Managed • Agreements and vendor contracts• Project planning, requirements management

Defined• Process standardization• Infrastructure integration• Focus on process enhancement

Quantitatively Managed

• Highly repeatable processes• Performance measurement, benchmarking

Optimized • Organizational innovation & deployment• Causal analysis and resolution

http://www.wikipedia.com

Lean initiatives can advance organizations with lower maturities to refine processes and

progress their maturity.

Lean initiatives can advance organizations with lower maturities to refine processes and

progress their maturity.

Process integration through the use of standardized interfaces

increases cross-division interaction.

Process integration through the use of standardized interfaces

increases cross-division interaction.

Lean documentation makes maintenance more direct,

allowing more time to be spent on prescriptive development.

Lean documentation makes maintenance more direct,

allowing more time to be spent on prescriptive development.

LEA

N IT

Application Maintenance and Development is a High-Risk Area of the IT Value-Chain

Overview Benefits Example Next Steps

80x

60x

40x

20x

0x

Rel

ativ

e C

ost t

o Fi

x D

efec

t (m

ultip

lier)

The cost of correcting an error increases as a product

progresses through the application development

lifecycle.

The cost of correcting an error increases as a product

progresses through the application development

lifecycle.

2x 8x

15x

80x

LEA

N IT

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--

--

--

The frequency of errors can be minimized through

requirement confirmation, iteration and passing

procedural gates.

The frequency of errors can be minimized through

requirement confirmation, iteration and passing

procedural gates.

By focusing on the foundations of

requirements, errors can be addressed before they are

designed, tested and deployed prior to being confirmed.

By focusing on the foundations of

requirements, errors can be addressed before they are

designed, tested and deployed prior to being confirmed.

The Relative Cost of Correcting Errors found in Different Development Stages

Integrate Segments of the Application Development Process with Collaborative Tools

Overview Benefits Example Next Steps

LEA

N IT

RequirementsAnalyst

EnvironmentImplementer

SoftwareArchitecture

Designer

ChangeDocumentationProject

Manager

Quality MgmtTesting

Tester

SystemArchitectureEnterprise

Architect

Tool integration increases interaction between

otherwise de-normalized segments of the development process, ensuring consistent

communication.

Tool integration increases interaction between

otherwise de-normalized segments of the development process, ensuring consistent

communication.

http://www.ibm.com/software/awdtools/rup/

Refine Corporate Governance to Formalize Processes

Overview Benefits Example Next Steps

A US Bank

http://www.mckinsey.de

A European Retailer

App.Maintenance

App.Development

Total

65 65

35 35

100 100

35 45

25 30

60 75

-40 -25

Application maintenance contributes to process

inefficiencies because of the misalignment of project goals and documentation

requirements.

Application maintenance contributes to process

inefficiencies because of the misalignment of project goals and documentation

requirements.

By decreasing administrative work and increasing processing power, companies have seen large reductions in resource consumption.

By decreasing administrative work and increasing processing power, companies have seen large reductions in resource consumption.

LEA

N IT

% of Total Time Spent in Processes

Take Advantage of Universally Repeatable Processes

Overview Benefits Example Next Steps

Offshore/Outsource

Requirements

Company

Design Test Deployment

Use

Customer

Move development to an organization with core competency to increase

production efficiency.

Move development to an organization with core competency to increase

production efficiency.

Pass a higher quality product onto the customer for actual use, increasing value for the

end-user.

Pass a higher quality product onto the customer for actual use, increasing value for the

end-user.

LEA

N IT

Standardized, well-known documentation makes it

easy to push defined requirements to an outside

party for development.

Standardized, well-known documentation makes it

easy to push defined requirements to an outside

party for development.

Many Resources are Available for Baselines and Further Research

Overview Benefits Example Next Steps

LEA

N IT

Agile / LeanEmphasizes the use of CMMI, RUP and PMBOK to increase

multidisciplinary communication and decrease setup time for

projects.

Application Development

Six Sigma

Process Improvement

ITIL

Best Practices / Methodologies

CMMI COBIT

Focuses on the cause of defects, rather than process

duration minimalization. Applies statistical management to maximize product quality.

Pushes for process improvement through

maturitization of projects or divisions. Doesn’t directly

address the impact of waste.

Illustrates concepts and policies for recommended

approaches to IT management. Used to help progress

organization’s technological maturity.

Best practices for IT management to match metrics

with processes to achieve compliance and maximize return

on investment.