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Published on March 2nd, 2012

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Lean IT: much greater than a cost saving exercise

Ovum is bringing its ITSM expertise to the Service Desk & IT Support Show with a series of keynotes and seminars dissecting some of the key issues faced by the industry.  In the first of a series of four articles written for ServiceDesk360 previewing the content on offer, Roy Illsley explains the principles of Lean IT and why it may prove to be an excellent fit for service and support teams today.

The business principle of ‘lean’ originates in Japanese manufacturing, coined to describe Toyota’s business during the late 1980s by a research team headed by Jim Womack, Ph.D. at MIT’s International Motor Vehicle Program.  ‘Lean’ is defined by the Lean Enterprise Institute as:

“A lean organisation understands customer value and focuses its key processes to continuously increase it.  The ultimate goal is to provide perfect value to the customer through a perfect value creation process that has zero waste.”

Today it is becoming a vogue term for how organisations can look to ensure the operational aspects of business functions are made more efficient; hence the term operational efficiency (OE) is now more widely understood.  However, moving a function like IT to be a ‘lean’ operation requires organisational change as well as a shift in thinking by the IT department.  Critical to this is defining the role of IT within the enterprise and getting both business leaders and IT to agree on the key aspects of responsibility and accountability.

Lean IT is more than just a standard, it’s a culture

Most IT departments either have begun, or are part way through, adopting a standard process and procedure model for operational activities, with ITIL being the most widely used.  However, lean IT is more than just adopting standard, repeatable processes; it is embedding those processes in the culture and people of an organisation: like the roots of trees the culture is difficult to see, and therefore difficult for competitors to copy, yet provides the foundations of stability for future growth.  The purpose of lean IT is not just OE, but using OE to create a strategy that provides a clear sustainable competitive advantage between an enterprise and its competition.

Ovum believes that very few organisations will be ready and able to adopt ‘lean’ IT principles without going through a standardisation/consolidation stage first.  The need to consolidate the services offered as well as understand the services consumed is a foundation-layer of any move to lean IT.  Some advanced ITIL-based organisations will have the maturity to adopt ‘lean’, but while ITIL provides the starting standardised platform it is not a given assurance of ‘lean’ success.  The take-away from any discussion on adopting lean IT is it is a journey and its path must be navigated based on a vision for the organisation.

Recognise the role of IT differs within and between organisations

The role of IT in many organisations is viewed as an adjunct to the main business, which has created the perception of the IT ‘ivory tower’.  While many management gurus and analysts have argued that IT is now a core element in any business, changing people’s perceptions will not happen overnight.  For many organisations a prime decision needs to be exactly what role does IT have within a company’s theatre of operations?  This question does not have a simple answer, as the choice depends on many different factors.

The Ovum model considers two main dimensions

Firstly, where is the organisation in terms of its business cycle?  The cycle of business performance can depend on many factors, but for clarity we have used a declining market or a growing market.  While the nuances of business can mean opportunities exist in both, the typical business approach has been used to represent the role of IT.  Secondly, the degree to which the industry is reliant, or places significance, on IT to ensure continued business operations.  This may appear a very counter intuitive measure given IT’s view of its own importance, but some operations do remain manual, despite IT automated solutions.  For example warehouse operations can rely on manual procedures such as chalkboards or use a fully integrated warehouse management system.

By using these two different dimensions it is possible to identify key requirements from IT.  That is not stating elements such as cost are not an issue for all, it is identifying the primary business requirements from its CIO.  However, within each organisation, different business units will have specific requirements, which may be in agreement with the overall view as to the role of IT, or may be contradictory.  Therefore, the role of IT must operate on at least two different levels.

First is the corporate strategic level, which drives the overall purpose of IT and defines the architecture.  This must be the dominant role of IT and must reflect, or be ready, for any change in business/market conditions.  The key elements at this level should focus on the need for speed of change.  For example, if IT is seen as a cost saver, but is in a volatile market, IT must be capable of rapid expansion/contraction to maintain its key objective.  Whereas, in a stable/declining market, IT may not need to respond with such speed.

Second is the Business Unit (BU) level, which may require IT to accommodate a different set of priorities, but within its primary objective.  Conundrums such as this are one of the driving forces behind cloud computing.  IT can effectively operate as per its primary objective, but offer BU level choice.

The objective of lean IT

The biggest lesson for any IT department is that lean IT is not about the tools that are used; it is about the processes and procedures deployed.  Every journey has to start somewhere, and for lean IT the journey begins with understanding what assets an organisation has and how they are used.  For most organisations, usage will be measured on a cost and value basis, but they should measure anything that is meaningful to the enterprise.

The objective of lean IT is to eliminate waste and to make IT as efficient as possible, but efficiency is only one dimension that organisations must consider.  Risk is a second dimension, which can influence decisions on where a certain activity is performed.  The final dimension is sustainability, which should allow the CIO to ensure that IT services will be delivered to match the organisation’s future demands.

Roy Illsley is principal analyst, infrastructure management for Ovum, follow him on Twitter @royillsley 
www.ovum.com
@OvumICT

Ovum has produced a video to accompany this article which you can view here

View more of OVUM’s ITSM research on YouTube: www.youtube.com/OvumITSM

Free registration is available now for the Service Desk & IT Support show.

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