Repeat after me … Lean is not just for manufacturing … Lean is not just for manufacturing …..  Fire up your browser and just ask Google.  It will enlighten you with many, many examples of  Lean making a big impact on service organizations … reducing costs, making things faster, making things just better.  You’ll find it in healthcare, government services, financial services, logistics,  and one that is near and dear to everyone’s heart ….. IT.  Yes, I said the I-word …

Remember, Lean is first and foremost about the elimination of waste, and I would argue that there is plenty of waste in IT, hence there is applicability for Lean in IT.   To take things further, since IT is supporting the broader business needs, waste in IT can be magnified into bigger waste (and bigger problems) as it filters through the business.  A good way to look at how Lean applies is to look at the elements of waste and make the connection to IT ….

Waste of Defects.  Systems not meeting requirements, software bugs, missed deadlines, blown budgets, etc.  This clearly adds cost to IT, but I would argue that the impact to the business can be even larger in terms of $’s.  Incorrect handling of a single customer transaction can cost the business big in terms of cost, lost revenue, and potentially attrition.

Waste of Overproduction.  Here, overproduction means simply doing things that don’t need to be done, like working on low-impact squeaky wheel projects that really don’t provide value to the business.  This is the classic IT Alignment with the Business problem that has been talked about for years and years.  The cost to the broader business is that strategic projects offer real value don’t get worked.

Waste of Waiting.  Test teams waiting for the next load that’s running behind, development teams waiting for test results, waiting for new hardware, waiting for software upgrades and patches, etc.    But, again, the business impact can be bigger.  Think about slow application response times, inefficient problem escalation process, missed deadlines delaying product launches, etc.

Waste of Overprocessing (non-value add processing).  A good example here is IT keeping track of excessive amounts of technology metrics, and then reporting those metrics to business managers.  Again, the old business / IT alignment demon rears its head.

Waste of Transportation. On site visits to correct hardware/software issues, physical security, compliance, or software audits, vendor visits for equipment that might not really be needed, etc.

Waste of Excess Motion. Firefighting creates excess motion, and I think it’s safe to say that firefighting is a way of life for many IT organizations and a productivity killer.

Waste of Excess Inventory.  Server sprawl, under-utilized hardware, software installed that no one uses, development and test teams benched, waiting for their next assignment

Waste of Underutilized Talent.  Failure to encourage and capture new ideas for innovation, retention issues, high-value employees used for mundane tasks that really require a much lower skill level, or possibly even automation (i.e. regression testing).   And I’ll add one more here … build vs. buy.  What is the impact when IT leverages its resources to build something inhouse, when a better and cheaper solution could have been bought?  This negatively impacts IT and the business heavily.

a short Powerpoint that discusses Lean in a services environment

OK, do can we agree that some (or all) of the above wastes happen in the typical IT department?  I thought so.  And, if Lean thinking and tools can help you reduce these and other wastes???   They can.

So, I think it’s pretty clear that there are many opportunities to use Lean to help IT organizations better serve their customers (i.e. the business), and lower IT costs and resource requirements.  I also believe that, due to most businesses’ increasing dependence on IT, the bigger value to improvements will likely be realized by the business, through smoother operations, better resource utilization, and happier customers and employees.   There are some really interesting trends like SOA and BigData that I’ll talk about in future articles that make Lean even more applicable.

Think about it and Contact me if you’d like to discuss how lean can be applied to IT organizations in more detail.

Organizations are increasingly adding tried and true Lean principles, tools and techniques to their continuous improvement initiatives to eliminate waste, improve customer satisfaction and reduce unnecessary costs.  And rightly so.  Successful Lean routinely reduce operating costs 20% – 40% and cycle time by even greater margins, and those cost reductions often go straight to the bottom line.

Traditionally, in applying Lean, trained teams identify then eliminate or significantly reduce the non-value added activities and related costs for specific processes within their operation.  But what if there are no “trained teams”?  What if process boundaries are unclear in a functionally silo’d organization?  Does this mean you can’t do anything to get results until significant infrastructure is in place?  I think not.

a short overview of our approach to applying lean at an operations level to internal service functions

We’ve found that Lean concepts and tools can be leveraged at a higher, function or operation level  very effectively.  The good news is that this approach delivers impressive business results on its own in the short term AND sets the stage for even more impactful process level improvements.  This is especially true for back office / internal service operations like HR, finance, IT, sales and marketing, supply chain management, etc.

Lean applied at an Operation Level for internal service and back office functions like HR, Finance, Procurement, IT, Marketing and Sales, and Supply Chain Management can make an immediate business impact …

The idea is to identify a complete business operation‘s most impactful cost drivers, BEFORE tightening focus to any process/subprocess in the value stream.  For those of you that have done Lean at the process level, I know this sounds a bit strange and your first thought may be that the scope will be too big and nothing will get done. But, our experience is that this can work very well and be very impactful:

• It can serve as a front-end audit function, greatly helping to identify next tier focus areas.
• It recognizes and works within functional boundaries that exist in the enterprise, as opposed to attempting to force artificial process boundaries that, while may be desirable, do not exist
• It maps and costs all key value streams of a targeted business function or sub-function, a necessary prerequisite for lower level improvements
• Attacks waste organization wide,  in both the supply-side (internal function itself) and demand-side (customer, consumer of the output).
• It consistently identifies low hanging fruit opportunities that can be realized immediately
• It can be used to jumpstart a new lean initiative or address unrealized opportunities from earlier lean events.

Lean Operations (lean applied at an high-level operations level) can definitely be a powerful tool for enterprises that are looking for immediate cost savings and/or performance improvements in internal service operations, but don’t have the desire/bandwidth/budget to start up a formal Continuous Improvement program.   It can be applied to an entire operation (e.g. HR, finance, Legal, IT, etc)  in a relatively short time period, and it does not require a big investment in training and infrastructure.  For those organizations that do want to move to a more structured Continuous Improvement program, it can be an excellent way to jumpstart a BPM, Lean, Six Sigma, etc. program

Need to improve performance or lower costs in internal service functions like Human Resources (HR), Finance, Procurement, Supply Chain, IT, Marketing and Sales, or any other back office type function?   Contact me to learn more about our approach to applying lean at an operations level.