Lean And IT’s Transformation To BT

Here’s another follow-up to our recent jam session on how to use Lean as an opportunity to make real improvement running IT. In a previous post on defining Lean, we addressed cost cutting, reduced planning horizons, consolidation and the quick killing off bad ideas. But we did not discuss whether and how Lean can help innovative CIOs transitioning their firms to Business Technology (see Forrester’s "Five Essential Best Practices For The IT-To-BT Transformation"), instead of focusing on making their IT shops skinnier.

Firms have used Lean for solving different problems. So far the most popular application has been as a process improvement tool, with Kaizen Blitz being similar to other process improvement tools such as Just-In-Time (JIT), Six Sigma, or Total Quality Management (TQM). Executives use them to uncover and implement opportunities to improve lead times, cut waste, and optimize development and provisioning processes. These tools work fine for processes with relatively stable steps and stakeholders, such as incident, problem, change, or release management (see Forrester’s "Applying Lean Thinking To IT").

But what to do when processes, stakeholders and KPI’s become moving targets because the organization’s strategy is changing? Is still Lean the right approach? Lean is certainly not a panacea, but Toyota’s most famous implementation convincingly illustrates Lean’s potential to support both incremental and disruptive transformations (you can find a summary of HBR’s article, “Decoding the DNA of the Toyota Production System,” here). Translated into popular jargon, the four principles Toyota’s success sound like the basics of good management:

  1. Build your strategy on deep knowledge of your business and it’s needs.
  2. Streamline operational processes to consistently meet – but not exceed customer needs.  Exceeding needs is a form of waste.
  3. Create a flat, flexible and fast organizational structure that reduces bureaucracy and simplifies work.
  4. Develop and maintain a performance-oriented culture, which holds individuals and teams to firm, yet ambitious performance expectations.

Companies like Southwest Airlines, Vanguard and Alcoa have applied these principles and demonstrated sustained ability to outperform their competitors over many years (see the HBS summary article, "4+2 = Sustained Business Success," here).

When I talk with CIOs about what they should do to lead their firm’s exploitation of technology, I translate those principles into these actions (see Forrester’s “The Lean Foundation For Business Service Portfolio Management”):

  1. Develop your IT strategy using services to meet the business needs.
  2. Commission execution to service providers and commit them to the business.
  3. Create a service-oriented structure able to right-size service delivery.
  4. Link individual and team rewards to the performance of the services they manage.

The Bottom Line?  The secret of applying Lean to Business Technology is not rooted in its tools but rather in the CIO’s business insights and commitment to clarity, simplicity, excellence and the people in his organization.

What do you think? Have you seen these Lean principles in action? 

Comments

re: Lean And IT’s Transformation To BT

I am in broad agreement with your final conclusions on LEAN. But I have a few comments to make. Defining "Lean" as reduced planning horizons and consolidation is good. Cost cutting could also be easily achieved by getting rid of the bad ideas of Java, XML and SOA. All those are the opposite of consolidation and require long planning horizons. Is that not obvious? SOA is complex integration work mostly by means of Java and XML. Right?Another bad and most of all UNPROVEN idea is that BPM improves processes and that SixSigma and TQM are more than a paper exercise. Show me the studies that prove that any of the above has really improved the way a business works in the long run. I am still unable to find any. I would seriously be thankful for pointers. I have been researching for my book for several years now and failed to find a single vendor independent and reliable study. Why? Because they can't prove that the idea works. SixSigma, TQM and BPM create rigid environments that people hate to work in because their initiative and intuition is flooded with bureaucracy! Why can nobody see that?The Toyota example is a good one, because each of those points says clearly that it is PEOPLE that make it work. Their knowledge (1), their innovation (2), no bureaucracy (3), and their motivation (4). So what we need is not all these unproven ideas but new and innovative software that empowers people and does not restrict them or enforces bureaucracy or even governance.How can it be done? What can IT actually do to empower those people and stay LEAN. It requires innovative software such as our Papyrus Platform that consolidates CRM, BPM, ECM, DOM, BR and BI into a single customer focused context. It enables the business to turn its strategy into a business architecture that is deployed via life-cycle management from the Papyrus WebRepository into production without intermediate coding or compilation. Processes are discovered from user interaction by machine learning the state patterns of content. Everything is secure and audited and goals are monitored. That is today's reality of the platform. All that is missing is the ability for the business user to work with the business architecture directly. As there is no coding that is at least feasible.The Bottom Line? The secret of LEAN is not rooted in its tools, but the the CIO's commitment to the people also requires the commitment to a paradigm shift in IT technology that leads away from coding and complex projects.