Kanban in IT Operations

Dragos DumitriuLean Kanban Inc.

Focus on delivering value and success will follow.

I am not the smartest or most talented person in the world, but I succeeded because I keep going, and going, and going. - Sylvester Stallone

In IT From The Bottom

I am not the smartest or most talented person in the world, but I succeeded because I keep going, and going, and going. - Sylvester Stallone

Keep Going at IT

I am not the smartest or most talented person in the world, but I succeeded because I keep going, and going, and going. - Sylvester Stallone

Keep Going at IT

I am not the smartest or most talented person in the world, but I succeeded because I keep going, and going, and going. - Sylvester Stallone

Made IT

Deloitte’s Center for the Edge studies: the life expectancy of a firm in the Fortune 500 has declined from around 75 years half a century ago to less than 15 years and is heading towards 5 years.

The pointlessness that people see in their jobs is an accurate reflection of the deteriorating condition of the firms they work for.

When those doing the work are dispirited, it is inevitable that customers too will be frustrated and that the firm will not prosper.

These problems cannot be solved by job redesign or clearer career paths. Instead, the organizations must seek change with a focus on delighting the customer through continuous innovation and that can only be delivered by engaged and motivated employees.

Let’s do something about IT!

Is That IT?

“Everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted.“ – Einstein

Cynefin

Simple

Complicated

Complex

Chaotic

Major Incident

Validate(3)

Ready(5N, 4W)

ResolvedActive

(3)

Weekend

BU Crit

Not Crit

CloseMonitor

… MI ReviewTrend Analysis

Problem

M Crit

Triage

Normal IncidentsExplicit CriteriaPriority

Where We Started

Major Incident

Validate(3)

Ready(5N, 4W)

Resolved

Priority

Active(3)

Weekend

BU Crit

Not Crit

CloseMonitor

… MI ReviewTrend Analysis

Problem

M Crit

Triage

Normal IncidentsExplicit Criteria

Where We Started

Major Incident

Validate(3)

Ready(5N, 4W)

Resolved

Priority

Active(3)

Weekend

BU Crit

Not Crit

CloseMonitor

… MI ReviewTrend Analysis

Problem

M Crit

Triage

Normal IncidentsExplicit Criteria

How We Treated Problems

Major Incident

Validate(3)

Ready(5N, 4W)

Resolved

Priority

Active(3)

Weekend

BU Crit

Not Crit

CloseMonitor

… MI ReviewTrend Analysis

Problem

M Crit

Triage

Normal IncidentsExplicit Criteria

How We Treated Problems

Major Incident

Validate(3)

Ready(5N, 4W)

Resolved

Priority

Active(3)

Weekend

BU Crit

Not Crit

CloseMonitor

… MI ReviewTrend Analysis

Problem

M Crit

Triage

Normal IncidentsExplicit Criteria

How We Treated Problems

Major Incident

Validate(3)

Ready(5N, 4W)

Resolved

Priority

Active(3)

Weekend

BU Crit

Not Crit

CloseMonitor

… MI ReviewTrend Analysis

Problem

M Crit

Triage

Normal IncidentsExplicit Criteria

How Problems Treated Us

Major Incident

Validate(BC)

Ready(BC)

Resolved

Priority

Active(BC)

BU Crit

Not Crit

CloseMonitor

Problem

M Crit

Triage

Normal IncidentsTier 1 – 40% (75%)Tier 2 – 45% (20%)Tier 3 – 15% ( 5%)

D:C 400% (110%)

Explicit Criteria

M

Msg & CommsTier 2 – 50% A, TT1Tier 3 – 60% A, TT2

InfrastructureTier 2 – 10%Tier 3 – 20%

Business AppsTier 2 – 10%Tier 3 – 10%

Asset ProtectionTier 2 – 30% A, TT1Tier 3 – 10%

Weekend

Asset Prot

… MI ReviewTrend Analysis

Evolutionary Change

MLocationCountry PhilippinesCity ManilaSupport volumeAverage support incidents received per month 4942% incidents/requests submitted via phone 15%% incidents/requests submitted via email 80%

% incidents/requests submitted via webchat (Lync) 5%

Service providedHours of support (eg 8 x 5, 24 x 7) 24x7Language(s) supported English% of incidents/requests resolved by help desk 73%

% of incidents/requests assigned to local office support 12%

% of incidents/requests assigned to other support teams 15%

Help desk Team Structure# Total FTEs (US) 0.5US contractors 1Manila 13# primarily focused on direct end user support 13

# primarily focused on management/supervision (US) 0.5

# primarily focused on other supporting roles (Manila) 1

Costs per Month (in thousands)

Total cost of team $ 38,083.00

Payroll costs $ 33,749.00

Other people related costs $ -

Facility/technology costs $ 3,751.00

Other costs $ 583.00

Basic Metrics

Average cost per incident: $ 7.71

Average GHD cost/per employee/per month $ 6.04

Average tickets/per person/per month 380 Customer Satisfaction 92% of 100%SLA

Please provide details of SLAs that apply to help desk

P1 - 4 HoursP2 - 8 HoursP3 - 24 HoursP4 - 36 HoursP5 - 72 Hours

Tools

What tool is used for incident management including assigning incidents to other support groups?

SCSM

What tool is used as a knowledge base? SharepointWhat tool is used for self-service portal (if available)?

SCSM will be used for Self-Help Portal in Q4

Any other important tools used?

Lync, Exchange Management Console, Active Directory, Alerts Tool, HR Reports (Headcount, Terminations, etc), SCOM, SharePoint, Microsoft Office, Vovici (customer satisfaction tool), Asset Management Tool, Inventory Tool (laptop compliance).

Comments

Any other comments on requirements, current services, customer satisfaction etc.?

Customer Satisfaction goal must exceed 80% (actual is 92%).

Evolutionary Metrics

M

Fully Loaded Hourly Rate

# of hours per

year

Vacation Hours

Sick Hours

Training Hours

# of Hours Per

Year Sub Total

$ 75.39 1040 N/A N/A N/A 1040 $ 78,405.60 $ 26.00 2080 N/A 2080 $ 54,080.00 $ 22.71 520 0 0 0 520 $ 11,809.20 $ 14.76 2080 120 40 60 1860 $ 27,453.60 $ 10.94 2080 120 40 60 1860 $ 20,348.40 $ 10.94 2080 120 40 60 1860 $ 20,348.40 $ 10.94 2080 120 40 60 1860 $ 20,348.40 $ 10.94 2080 120 40 60 1860 $ 20,348.40 $ 8.34 2080 120 40 60 1860 $ 15,512.40

Shift Night

Differential Hours

Night Differential $

Meal Allowance

Transportation

AllowanceSub Total Yearly Total Monthly

Total

N/A N/A N/A N/A N/A $ - $ 78,405.60 $ 6,533.80 N/A N/A N/A N/A N/A $ - $ 54,080.00 $ 4,506.67 N/A N/A N/A N/A N/A $ - $ 11,809.20 $ 984.10

Th-Sa 10p-10a 1236 $1,824.34 $544.19 $634.88 $3,003.41 $ 30,457.01 $ 2,538.08 Th-Sa 10a-10p 0 $0.00 $544.19 $0.00 $544.19 $ 20,892.59 $ 1,741.05

M-Th 7p-5a 1236 $1,352.18 $725.58 $725.58 $2,803.35 $ 23,151.75 $ 1,929.31 Su-W 9p-9a 1236 $1,352.18 $544.19 $634.88 $2,531.25 $ 22,879.65 $ 1,906.64 Tu-Fr 11a-9p 0 $0.00 $725.58 $0.00 $725.58 $ 21,073.98 $ 1,756.17 W-Sa 10p-9a 1664 $1,387.78 $544.19 $634.88 $2,566.85 $ 18,079.25 $ 1,506.60

Boring and Important: BudgetNumber in Ringing to Plan Monthly Price Prepaid Annual Additional MinutesAustralia - 1300 USA 250 59.00$ 44.00$ 0.27$ China - Toll Free (800) Low Volume USA 125 59.00$ 44.00$ 0.47$ Malaysia - Toll Free USA 250 39.00$ 34.00$ 0.15$ Singapore - Toll Free - Low USA 250 59.00$ 44.00$ 0.20$ Belguim - National USA 250 19.00$ 14.00$ 0.60$ Denmark - National USA 250 19.00$ 14.00$ 0.60$ Finland - Helsinki USA 250 19.00$ 14.00$ 0.60$ France - National USA 250 19.00$ 14.00$ 0.60$ Germany - Munich USA 250 19.00$ 14.00$ 0.60$ Netherlands - National USA 250 19.00$ 14.00$ 0.60$ Norway - National USA 250 19.00$ 14.00$ 0.60$ Spain - National USA 250 19.00$ 14.00$ 0.60$ Swedent - National (10) USA 250 19.00$ 14.00$ 0.60$ Switzerland - Zurich USA 250 19.00$ 14.00$ 0.60$ United Kingdom - National 0870 USA 250 19.00$ 14.00$ 0.60$ Total Monthly 425.00$ 320.00$ FY11 Cost 1,700.00$ 1,280.00$ FY12 Cost 5,100.00$ 3,840.00$ Annual Savings 1,260.00$ FY12 Extra Minutes Overage 2,400.00$ Total 7,500.00$

FY 11 Sunday Monday Tuesday Wednesday Thursday Friday Saturday # of Shifts/Week Cost per week Cost per Year# of 1st Shifts 1 3 4 4 4 2 1 19 $399.00 $20,748.00# of 2nd Shifts 1 3 4 4 3 2 1 18 $60.30 $3,135.60# of 3rd Shifts 1 2 3 3 3 2 1 15 $50.25 $2,613.00

Total $509.55 $26,496.60

FY11 with 2 Gs Sunday Monday Tuesday Wednesday Thursday Friday Saturday # of Shifts/Week Cost per week Cost per YearSEAAC 1 4 5 5 5 3 1 24 $504.00 $26,208.00EALA 1 4 5 5 4 3 1 23 $77.05 $4,006.60AMER 1 2 3 3 3 2 1 15 $50.25 $2,613.00

Total $631.30 $32,827.60

FY12 with 2 Fs Sunday Monday Tuesday Wednesday Thursday Friday Saturday # of Shifts/Week Cost per week Cost per YearSEAAC 1 5 6 6 6 4 1 29 $609.00 $31,668.00EALA 1 4 5 5 4 3 1 23 $77.05 $4,006.60AMER 1 3 4 4 4 3 1 20 $67.00 $3,484.00

Total $753.05 $39,158.60

0

20

40

60

80

100

120

140

160

180

FY04 Q4 FY05 Q1 FY05 Q2 FY05 Q3 FY05 Q4 FY06 Q1 FY06 Q2

MSimilar Results and Approach

Productivity

Cost(x 100)

Sev 1TTR

OtherTTR

Make work, workflow, and queue/wait times visible (Kanban) Enterprise NOT Stakeholder prioritization based on capacity,

eliminate failure demand, shorten cycle time. Cross train people and focus on moving knowledge (first)

and work (second) from T3 to lower tiers 80-300% boost to tiers capacity over 2 years, lower cost, higher

productivity Establish Service Lines run by a Service Manager (ITIL v3)

Put the pain where it belongs; resulted in jaw dropping reduction of failure demand within weeks.

MI Reviews and Trend Analysis are tied to Service Team rewards Automation, identification of training needs for IT and for customers Established reputation for building the right thing, right

IT Org wins CIO’ Magazine Awards two years in a row.

The short story

Conclusion

Making a person work and profiting from that work is different.

It is not important to optimize locally, it is essential to optimize flow through the organization from demand to service consumption.

Reduce WIP to achieve shorter cycle times, increased output reduced costs

It’s not luck.

“I love your work dude; I’ve

been using kanban boards for

over 3 years, and wish I had

learned about it 10 years ago.  I

will never go back to life without

one it’s just too dangerous!”

Gene Kim,

author, The Phoenix Project

,

I pioneered Kanban with David Anderson 10 years ago and ever since, we helped customers thrive, CIOs win awards, and helped develop a new field that is generating best of class books, tools, training and success stories. Let me know how I can help.

Q & A

Appendix

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