Lean IT Enabling and Sustaining Your Lean Transformation. CRC Press

Steven C. Bell • Michael A. Orzen

Praise for Lean IT
“A great read on how to apply Lean principles to IT. 
These tools really work to improve IT’s performance and credibility.”
— Niel Nickolaisen, CIO Headwaters, Inc.; co-author of Stand
Back and Deliver: Accelerating Business Agility
“A groundbreaking synthesis, examining IT operations, project management, software development, and governance through a Lean lens. Taut, subtly reasoned, and laced with the kind of brilliant insights that only come from practicing masters. Required reading for IT executives, architects, and project managers.”
— Charles Betz, author of Architecture and Patterns for IT Service Management,
Resource Planning, and Governance, and practicing Fortune 20 enterprise architect
“A superb primer for anyone interested in learning about Lean. Their work will help business leaders understand the arcane machinations of IT while giving IT professionals a common language to talk to the business.”
David Almond, Administrator, Office of Transformation for the Department
of Administrative Services; former CIO, Oregon Department of Revenue
“Do most IT organizations waste effort? They do. Can this book transform your thinking and
jumpstart your efforts to eliminate waste and optimize the business value of IT? You bet!”
Kurt Milne, Executive Director, IT Process Institute
“Finally! A practical Lean transformation blueprint that includes information systems and the IT
organization, while addressing the essential element of human engagement across the enterprise.
You can easily digest their lessons and learn how to adapt and apply to your specific organization. This is the key to business alignment the IT industry has been searching for.”
Andrew Rome, Talent & Organizational Performance executive
of an 80,000-person global IT Management firm
“A deft application of Lean concepts and techniques to a central challenge we all face: how to
increase effectiveness of investments in IT people and systems and the value they bring to enterprise processes. Current and aspiring business and IT leaders and managers at all levels of the organization will benefit from their in-depth knowledge and broad perspective.”
John Pierce, Vice President, Information Systems, Tripwire, Inc.
“Lean IT is an idea whose time has come, especially now that applications like electronic medical records may soon revolutionize health care. Bell and Orzen blend creativity and practicality as they show how to improve both information quality and ease—all the while acknowledging that more is not always better.”
Naida Grunden, Author, The Pittsburgh Way to Efficient Healthcare:
Improving Patient Care Using Toyota Based Methods
“This book is long overdue. 
The IT world needs tools and concepts to be structured in their language and approach so they can join the productivity push that manufacturing has already experienced. “
Bill Baker, co-author, Winning the Knowledge Transfer Race


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Lean IT Enabling and Sustaining Your Lean Transformation


Acknowledgments
This book was born from our realization of the pressing need to effectively
apply Lean thinking to information and information systems. We
are grateful to the many people who provoked, challenged, and elevated
our understanding of this fascinating and diverse subject. This book is
a collection of experiences, lessons learned, and insights from the many
people we have had the privilege of working with over the past 20 years.
Throughout this book, our friend, client, and colleague, Richard Carroll,
has provided thoughtful feedback and, at times, very challenging reviews.
His professional experience and insights inspired us to stress the practical
application of many of the central themes in this book.

Our appreciation also goes to those individuals and organizations who
supported us along the way. These include Jim Womack, Helen Zak, and
Mark Graban at the Lean Enterprise Institute; Jake Raymer and Bob
Miller at The Shingo Prize for Operational Excellence; and Dan Miklovic at Gartner.

Special thanks for the contribution and support we received from Scott
Alldridge, Dave Almond, Scott Ambler, Valerie Arraj, Bill Baker, Jackie
Barretta, John Bernard, Charlie Betz, John Bicheno, Aaron Brown, Stevie
Campion, Steve Castellanos, Tim Costello, Phil Coy, Beth Cudney, Toni
Doolen, Susan Duke, Troy DuMoulin, Ron Durham, Martin Erb, Dennis
Feagin, Russell Field, Gwendolyn Galsworth, Manoj Garg, Naida Grunden,
Lance Harris, Darren Hogg, Steve Hoeft, Nathan Holt, John Houlihan, Paul
Imai, Ed Israel, Tom Jackson, Gene Kim, Elizabeth King, Susan Kirchoff,
Dr. David Labby, Rick Lemieux, David Mann, Karen Martin, Brian Maskell,
Kurt Milne, Niel Nickolaisen, Debbie Nightingale, Tom Perry, John Pierce,
Travis Pierce, Tom and Mary Poppendieck, Carol Powers, John Price, Jack
ReVelle, Patrick Roach, Andrew Rome, Terry Ross, Brandon Ruggles, Joe
Rutz, James Scott, James Serazio, Praveen Sharabu, Bill Siemering, Rajesh
Solanki, Damon Stoddard, Pete Stofle, Tom Vest, Mike Wegener, Brian
Wellinghoff, Dennis Wells, Brett Wills, Dave Wilson, Stephen Wilson,
and Colleen Young. We’d also like to thank Aurelia Navarro and Caralee
Anley-Casares for their outstanding editing and coaching skills.

We are deeply in debt to those individuals and organizations who
invested the time and patience to write, in their own words, actual case
studies that illustrate real-world examples of the power of Lean IT.
These include Brian Wellinghoff, Barry-Wehmiller; Richard Carroll and
Aaron Brown, Con-way; Mike Manis and Bill Siemering, Group Health;
Rajesh Solanki, Bill Kemerer, and Brent White, Ingersoll Rand Security
Technologies; Mark Swets and Tim Schipper, Steelcase; John Houlihan
and James Scott, Toyota Australia; Lee Darrow, John Eusek, and David
Krause, Virginia Mason Medical Center.

And to the hundreds, or perhaps thousands, of individuals not listed
here, with whom we have interacted over the past years during consulting,
teaching, workshops, conferences, and research, we are grateful. Together
we are forging ahead in a collaborative journey of discovery, learning, and
knowledge sharing, as we collectively 
develop this new body of knowledge around Lean IT.

Finally, our heartfelt appreciation and admiration go to our wives, Karen
and Lynda, who endured the many challenges that often accompany projects
such as this. Your tireless faith, support, patience, understanding,

acceptance, and love have helped us to become the people we are today.


Introduction
Today’s IT organization faces a clear imperative: reduce costs while improving
service levels. At the same time, it must assume an active leadership
role to drive change—continuous improvement, innovation, and agility—
throughout the enterprise, enabling efficient yet flexible business processes
that create value and establish preference in the eyes of each customer.
How can these potentially competing objectives be satisfied with limited
resources? For the answer, we turn to the lessons learned from Lean, which
emerged in manufacturing during the 1950s and has since been embraced
across every industry. It is now the time for IT to adopt Lean thinking as well.

This is the first definitive and comprehensive text on the Lean IT body of
knowledge, demonstrating how the various aspects of Lean can be applied
to the continuous improvement of information and information systems
in order to enable and sustain the Lean enterprise. Written by Lean IT
pioneers Steve Bell and Mike Orzen, this book distills over 40 years of
experience in applying Lean principles, systems, and tools to information
technology across many industries.

This book was written to help you—whether you are a business executive,
manager, IT professional, or member of an improvement team—to
proactively improve, integrate, align, and synchronize information and
information systems to enable breakthrough performance and agility.

What Is Lean IT ?
Is business process improvement part of Lean IT? What about best practices
and benchmarking? Is agile software development a Lean IT practice?
What about IT operational excellence and the ITIL service management
framework? How about performance management dashboards and scorecards?
Is applying Lean techniques to project management considered a
Lean IT practice? And is cloud computing relevant in a Lean IT world?

The answer to all these questions is yes. But Lean IT is much more than
just a set of tools and practices; it is a deep behavioral and cultural transformation
that encourages everyone in the organization to think differently
about the role of quality information in the creation and delivery
of value to the customer. Lean IT enables the IT organization to reach
beyond alignment toward fundamental integration, cultivating an inseparable,
collaborative partnership with the business.

Whether you are new to Lean, or a seasoned veteran, in this book you
will find new insights into the power of Lean and the critical impact of an
integrated IT function. In this book, Bell and Orzen explore all aspects of
Lean IT within two primary dimensions:
1. Outward-facing Lean IT: Engaging information, information systems,
and the IT organization in partnership with the business to
continuously improve and innovate business processes and management systems
2. Inward-facing Lean IT: Helping the IT organization achieve operational
excellence, applying the principles and tools of continuous
improvement to IT operations, services, software development, and projects
These two dimensions are not separate but complementary, two sides of
the same coin. They serve the ultimate objective of Lean transformation:
creating value for the enterprise and its customers.

We begin in Part 1 by exploring the foundations of Lean, and how they
apply to information, information systems, and the IT organization. Part
2 then explores the various outward-facing aspects of Lean IT applied to
business process improvement, supported by an effective Lean management
system that links strategy with daily work. Part 3 explores inwardfacing
issues: how Lean IT improves the performance of IT operations
and services, software development, and project management, while considering
the implications of a shift toward cloud computing. Part 4 brings
it all together, with a comprehensive perspective on Lean management
and governance, offering a Lean IT roadmap to help readers on their own
transformation journey.

The book concludes with case studies from several Lean leaders: Barry-
Wehmiller, Con-way, Group Health, Ingersoll Rand, Steelcase, Toyota,
and Virginia Mason Medical Center. Each offers, in their own words, a
practical example of how Lean IT can enable and sustain the Lean enterprise
transformation.

An ancient proverb says that the best time to plant a tree is 20 years ago.
The next best time is right now. So let’s get started.


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Product details
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 372 p
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 ISBN-13
 978-1-4398-1757-5 (Ebook-PDF)
 Copyright
 2011 by Steven C. Bell and Michael A. Orzen 


Table of Contents
Acknowledgments.......................... xv
Introduction..............................xvii
Section I Foundation
What Is Lean IT and Why Is it Important?
Chapter 1 Why Does Lean IT Matter?................................................ 3
The Business View........................................................................3
The IT View...................................................................................5
What Causes IT and Business Misalignment?.........................6
How Lean IT Encourages Alignment and Creates Value.......8
Moving Forward.........................................................................10
Endnotes......................................................................................11
Chapter 2 Foundations of Lean......................................................... 13
A Brief History of Continuous Improvement........................13
The Age of Scientific Management: 1890–1940.................13
The Age of Engagement: 1940–1995...................................14
The Age of Integration: 1996–Present................................15
Lean Principles...........................................................................16
Constancy of Purpose...........................................................17
Respect for People..................................................................21
Continuous Improvement and the Pursuit of
Perfection................................................................................22
Proactive Behavior.................................................................24
Voice of the Customer...........................................................26
Quality at the Source.............................................................27
Systems Thinking..................................................................27
Flow, Pull, and Just in Time.................................................29
Culture................................................................................... 30
The Central Concepts of Value and Waste.............................33
Value Stream..........................................................................33
Value........................................................................................33
Value-Added Work: VA, NVA, and NNVA................. 34
The Three Ms......................................................................... 34
Unevenness: Mura........................................................... 34
Overburden: Muri............................................................ 34
Waste: Muda......................................................................35
The Power of the Three Ms..............................................36
Lean Tools Overview.................................................................36
A3 Thinking, the Scientific Method, and PDCA..............36
Value Stream Mapping.........................................................37
Kaizen..................................................................................... 40
System and Process Kaizen............................................ 40
Kaizen Events, Projects and Daily Improvement.........41
Kaikaku.................................................................................. 42
Standardized Work............................................................... 42
5S and the Visual Workplace.............................................. 43
Let’s Get Started!....................................................................... 43
Endnotes..................................................................................... 44
Chapter 3 The Lean IT and Business Partnership........................... 45
Why Hasn’t IT Been a Focus of Lean?.................................... 46
What Is IT’s Burning Platform for Transformation?........... 48
Lean versus Traditional IT: A Natural Tension?...............49
Legacy Systems.......................................................................50
What about Process Maturity Models?..............................51
What Is Information Waste?.....................................................52
Excess Information Inventory Waste..................................53
Information Overprocessing Waste................................... 54
Poor Data Quality Waste......................................................55
Learning to See Information Waste.........................................55
Health Care Information Quality........................................... 56
Lean and Green IT.....................................................................61
The Tools of Lean IT..................................................................63
How Do We Do Lean IT?..........................................................65
Endnotes..................................................................................... 66
Section II Integration
Aligning Lean IT and the Business
Chapter 4 Lean IT and Business Process Improvement.................. 69
Chapter Objectives.............................................69
The Coordinating Function of Information, IT, and
the Lean Office............................................................................70
The Intangible Nature of Information Value and Waste......74
IT Brings Systems Perspective to Business Process
Improvement..........................................................................75
Enterprise Software Applications and the Ghosts of
Projects Past...........................................................................77
The Efficiency–Flexibility Trade-Off: Agility....................79
Process versus Practice........................................................ 80
What Processes and Practices Are “Best”?.............................82
Benchmarking: No Need to Reinvent the Wheel..................83
Using Measurement Effectively................................................85
Compliance: A Special Form of Measurement..................87
Business Process Management (BPM)................................... 88
Prioritizing Process Improvement with Strategy................. 90
Supporting Processes........................................................... 90
Innovating Processes.............................................................92
The IT Organization’s Contribution........................................93
Endnotes......................................................................................95
Chapter 5 Lean IT Lessons Learned from Lean
Manufacturing: Flow and Pull......................................... 97
Chapter Objectives.....................................................................97
Push versus Pull: What Went Wrong with MRP?.............. 100
Flow, Balance, and Agility.......................................................102
Kanban Is an Information System for Pull............................104
Creating a Level Schedule.......................................................107
IT Demand Management: The Foundation for Flow..........109
Only Three Choices When Demand Exceeds Capacity.111
The IT Demand Management Cycle.................................112
Demand Planning...........................................................112
Flow Simplifies Demand Planning...............................114
Capacity Planning...........................................................115
Balancing.........................................................................116
Executive Review............................................................117
Lean IT Lessons Learned from the Shop Floor....................118
Endnotes....................................................................................119
Chapter 6 Lean Management Systems............................................ 121
Communication....................................................................... 123
Knowledge Management and Collaboration....................... 124
Knowledge Management....................................................125
Collaborative Workspaces..................................................127
The Evolution of a Lean Intranet Site................................... 128
IT Service Desk (Help Desk)..............................................129
Education and Training......................................................130
Performance Measurement.....................................................131
Lean Business Intelligence.................................................133
Rapid Acquisition and Integration....................................135
Strategy Deployment................................................................136
The Role of Information Systems in Strategy
Deployment..........................................................................139
Measuring Value: Lean Accounting......................................140
Focus on Creating Value, Not Cost Reduction....................143
The Importance of the Lean Management System..............144
Endnotes....................................................................................145
Section III Performance
IT Operational Excellence
Chapter 7 Lean IT Operations: ITIL and Cloud Computing........ 149
Quality Is Free...........................................................................150
Functional Silo or Value-Adding Service Center?...............152
ITIL: A Lean Approach to IT Services Management..........156
ITIL Is a Set of Integrated Processes.................................157
How ITIL Emphasizes Quality at the Source.......................159
How ITIL Supports Lean IT...............................................160
A3 Problem Solving........................................................160
Voice of the Customer....................................................160
Lean Thinking Applied to Security and License
Management...................................................................161
Quality at the Source......................................................162
Standard Work................................................................162
Measurement...................................................................163
Lean IT in the Cloud................................................................164
Lean Tips for Successful IT Services Adoption....................165
Endnotes....................................................................................168
Chapter 8 Lean Software Development........................................... 169
The Challenges of Traditional Software Development........171
Lean Software Development Basics.......................................174
Lean Software Development Life Cycle.................................177
Organization and Approach..............................................177
Requirements Definition....................................................178
Demand Management........................................................181
Execution and Test Iterations............................................183
Customer Service and Support..........................................186
Measurements......................................................................187
Implementation and Integration Lessons Learned.............189
Endnotes....................................................................................191
Chapter 9 Applying Lean to Project Management..................... 193
The Value of Effective Project Management.........................193
The Project Management Body of Knowledge................197
Portfolio Management........................................................197
Program Management........................................................198
The Project Management Office...................................198
Is Lean a Program?...................................................................199
Project Management.......................................................... 200
The Disconnect between Strategy and Execution:
The Role of the PMO................................................................201
Improving Project Management Results with Lean
Thinking.............................................................................. 203
Lean Project Management..................................................... 206
The Triple Constraints Model........................................... 206
Applying Lean Thinking to Project Management......... 207
A3 Thinking................................................................... 208
Value Stream Mapping...................................................212
Plan-Do-Check-Act, DMAIC, and Project
Management.........................................................................213
Initiate..............................................................................213
Plan...................................................................................215
The Five Whys...........................................................................217
The Fishbone Diagram............................................................217
Execute.............................................................................219
Monitor and Control..................................................... 220
Close.................................................................................221
Lean Project Management Enables the Lean Enterprise... 222
Endnotes................................................................................... 223
Secrion IV Leadership Roadmap 
Chapter 10 Leading the Lean IT Transformation....................... 227
How to Launch a Lean Enterprise Transformation............ 227
Strategic Intent......................................................................... 229
Leadership Is a State of Mind.................................................232
The Importance of Effective Management Systems........... 234
Strategy Deployment...........................................................235
Demand Management....................................................... 236
Business Process Management..........................................237
Project, Program, and Portfolio Management............... 238
Governance.......................................................................... 238
The Three Levels of a Lean Management System............... 240
Integrating Lean IT................................................................. 244
Endnotes................................................................................... 248
Chapter 11 A Lean IT Roadmap.................................................... 249
People Lead Lean IT Change................................................. 249
How to Start the Lean IT Transformation............................252
Lean IT Transformation Roadmap........................................253
Strategy..................................................................................... 254
Establish Leadership Vision and Consensus.................. 254
Articulate Strategic Intent and Drivers........................... 256
Planning.................................................................................... 256
Define and Communicate the Transformation Plan..... 256
IT’s Stop-Doing List.................................................................257
Build a Lean Leadership Team......................................... 258
Create a Basic Toolkit..........................................................259
Assess Key Enterprise Value Streams...............................259
Execution.................................................................................. 260
Launch Pilot Kaizen Projects............................................ 260
Invest in Enterprise-Wide Infrastructure....................... 260
Measure Results and Assess Understanding and
Buy-In................................................................................... 260
Who Goes First?.......................................................................261
Consolidate Gains and Build Momentum...................... 262
Setting the Pace for Change .................................................. 264
Endnotes................................................................................... 266
Secrion V Lean IT Case Studies
Case Studies......................................................................................... 269
Barry-Wehmiller: Lean and ERP Work Together............... 269
Con-way: Document Management Virtual 5S.....................271
Con-way: Focused Value Streams..........................................274
Group Health: Lean Software Development Aligns
with the Business Strategy......................................................279
Ingersoll Rand Security Technologies: Lean Six Sigma
Improves Order Quality......................................................... 284
Steelcase: Product Data Management Lean
Transformation........................................................................ 288
Toyota Australia: How IT Helped Implement
Breakthrough Strategy Management....................................291
Virginia Mason Medical Center: 
Laboratory Order Process and System Improvement......301
Appendix A: A Brief History of Continuous Improvement............. 307
Appendix B: How Lean and Six Sigma Work Together.................... 313
Focus..........................................................................................315
Roles...........................................................................................315
Project Size and Duration.......................................................316
Project Selection.......................................................................316
Complementary Coexistence..................................................317
Appendix C: Information Wastes....................................................... 319
Appendix D: IT Service Desk A3 Example........................................ 329
Index..................................................................................................... 333
About the Authors............................................................................... 349

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