Articles

By Joanne Moretti

Today, IT budgets are being cut as the impact of the global economic recession becomes local. Yet the demands on IT are no less than they were before. Customer service cannot be compromised, compliance mandates continue to proliferate and IT complexity is ever-increasing. With even tighter spending, a new approach is required to address these challenges. Some leading-edge IT organizations have realized great results by applying Lean thinking to IT.

The beauty of Lean is its pragmatism. It rewards and even encourages incremental wins, doesn’t require a grand overhaul of systems, and isn’t obscure in its methodology, terminology or theory. The core philosophy of Lean thinking can be summarized in four words: Maximize Value, Minimize Waste.

Value is always defined from the standpoint of the end customer. Customers can be internal, such as business analysts who employ these systems to support revenue and take care of clients. Or they may be supply-chain partners who rely on the system for real-time product ordering and shipping. Often the customer is a paying consumer who is purchasing goods and services from online Web stores.

Visual Management Systems for Lean IT

Lean thinking advocates the use of visual management systems to present and share critical information and facilitate process efficiency. Examples of visual management systems include:

• Status boards that show personnel availability
• Lights on machines showing status (red for unavailable, yellow for available and green for in use)
• Performance metrics posted in public areas that show throughput and quality performance

Perhaps the best example of a visual management system is the kanban card system that production workers in the Toyota Production System use as inventory pull signals. These manually constructed visual management systems work well in discrete manufacturing industries like automotive and electronics because of the physically tangible nature of the work-in-process (WIP) and because the process steps being managed are typically conducted in a single location, on the manufacturing floor.

In IT, business services consist of bits and packets coursing through electronic infrastructure, the ultimate in intangible WIP. It’s not visibly apparent which servers and infrastructure components are supporting which services. Moreover, the infrastructure and personnel supporting service offerings are often distributed across the globe. Here, then the need to visualize end-to-end transactions and the underpinning infrastructure of said transactions is even more critical. How can IT operations be streamlined, virtualized, automated or managed without visibility about what is going on in the IT environment?

The answer is that IT managers need enterprise IT management systems that provide visual management of all customer transactions with the organization, whether they be external customers or internal business users and executives. These systems require an understanding of the infrastructure and staff supporting services, insight into the performance and utilization of staff and assets, and most importantly a level of data consolidation and presentation.

To optimize critical business services and achieve Lean IT, there are four dimensions that need to be considered:

1. Business Engagement with IT
2. Transaction Visibility
3. Operational Excellence
4. Security and Compliance

Business Engagement with IT

The economic downturn has not diminished the demands on IT. Business executives still require new or updated IT applications and services to support their strategic initiatives. Employees still need access to services and service support. Change requests are unabated and need to be prioritized, approved, scheduled and managed through a controlled process.

Project and portfolio management software can provide insight into the investment planning process to help ensure that funds are allocated to the IT projects that best support business objectives. Service lifecycle management enables IT to successfully engage with employees, customers and partners to manage both strategic and tactical demand. Together, these solutions can provide financial transparency into every project and service, and optimize their delivery. Studies have shown that the application of enterprise IT management software and best practices can reduce the cost of service delivery by up to 30 percent 1, reduce project duration by 35 percent 2 and reduce project costs by 37 percent. 3

Transaction Visibility

To improve customer value, it is important to know what the customer is experiencing. Are your customer-facing applications giving you a reputation for first-class service and responsiveness or causing frustrated customers to seek out your competition?

Application performance management proactively monitors and manages the customer experience, identifying when service performance is degrading. It integrates with infrastructure management software to quickly identify and remediate the root cause of problems before customers are impacted. Studies have shown a reduction in application downtime of up to 70 percent due to application performance management and infrastructure management software. 4

Operational Excellence

Strategies to achieve operational excellence include identifying and remediating bottlenecks, automating processes to reduce wait-time and errors, and optimizing IT asset utilization through virtualization and consolidation efforts. Just-in-time resourcing needs to become a key discipline within IT.

High-impact transactions typically are supported by Web-based front-ends and a variety of infrastructure components, often spanning mainframe and distributed platforms. The mainframe, it should be noted, is considered the “leanest” platform due to its energy efficiency and extreme reliability. For optimal efficiency, it’s advisable to leverage an infrastructure management system that can accommodate complex, heterogeneous environments and can integrate processes across all layers of the operating stack from applications to servers, networks and databases.

Companies that deploy infrastructure management solutions gain a better understanding of their asset utilization and their bandwidth capacity requirements, and save money by only buying what they need; bandwidth and networking costs can be reduced by 50 percent. 5 They can troubleshoot problems more accurately, thereby reducing Mean-Time-to-Repair by 50 percent. 6

Controlled change management processes are also critical for achieving operational excellence. Change management solutions help ensure that changes are scheduled to avoid a negative impact on the business, reduce the risk of error and can reduce downtime by 20 percent. 7 Ideally, change management solutions support both application and operational change to facilitate an integrated and efficient approach to change management.

Security and Compliance

When focusing on optimizing value streams to deliver more value and reduce costs, risk and compliance are necessary considerations. Proving that only authorized users have access to sensitive information to support compliance initiatives continues to be a challenging and expensive endeavor that may become even more complex if new financial-regulation compliance mandates are rolled out in the aftermath of the market meltdown.

Additionally, the economic climate has resulted in many disruptive human resources-related changes; companies are downsizing, reorganizing, conducting mergers and acquisitions activity, bringing in more contractors and outsourcing functions. This results in a dire need for short- and long-term identity provisioning and de-provisioning of user access to sensitive information. A 2009 Poneman Institute survey revealed that more than 60 percent of employees admitted they took confidential company information with them when they were laid off or switched jobs. 8

Integrated Security and Compliance solutions help streamline and automate processes to reduce the cost of assuring and validating compliance. At many companies, compliance processes are highly manual and redundant; many different groups use their own spreadsheets or other fragmented toolsets, which can quickly get out of synch, leading to further risk. By centralizing compliance information and standardizing processes and toolsets, you can reduce risk, remove redundancies and increase agility to respond as regulations change.

The Time for Lean IT Solutions is Now

CIOs seeking competitive advantage should embrace Lean IT. It provides the means to intelligently address the currently difficult economic environment, while positioning the enterprise to thrive in the up markets to come. The pragmatism of Lean IT means that CIOs can take advantage of it incrementally, adding value every step of the way.

For more information on Lean IT, read “The Case for Lean IT.”