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Slide 1: LeanSigma Information Technology
Slide 2: The worldwide business environment is in turmoil… • Marketplace volatility • Credit squeeze • Slowing global expansion • Banking restructuring • Mergers and acquisitions …and organizations are developing or executing strategies to cope … 2 © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
Slide 3: …with traditional approaches to cost reduction… • Portfolio segmentation CapEx 30% • Shorten planning horizons • Postponing long-term projects in favor of near-term ROI • Consolidation/standardization OpEx 70% • Staff and asset utilization optimization • Revisiting existing service contracts • Seeking productivity increases 3 © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
Slide 4: …however, CIO’s remain caught between conflicting demands… • Still, the biggest challenge is in reducing cost while balancing the needs of the business… – Reduce overall costs for IT, while also – Improving operating efficiency, AND – Improving service to customers, while also – Enabling new business capabilities for the future …the challenge is in “how” to do all four at once… 4 © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
Slide 5: …CIO’s need a comprehensive and flexible approach to deliver both short term improvements and longer term strategy… The economic downturn hasn’t reduced the pressures being placed on IT to reduce costs by 10%, 20% or more… And today IT is embedded in the business – delivering value to the business and on behalf of the business out to customers and suppliers… Yet, business requests for IT services are unabated… As a result CIO’s are looking for new ways to further increase productivity and reduce costs without impacting service… …fortunately the one constant in every IT organization is that all activities are made up of processes… 5 © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
Slide 6: Sample IT Organization Processes Change Management Legacy System Support Application Development Database Administration Information Security Data Center Operations Telecom Desktop Support Hardware Acquisition Software Implementation Project Management Hardware Deployment Vendor Management Outsourcing Project Selection Help Desk LeanSigma provides the best combination of tools for streamlining and improving functional and end-to-end processes 6 © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
Slide 7: What is LeanSigma? LeanSigma is the combination of two powerful business process improvement methods that came out of the manufacturing sector in the 1980’s. In recent years it has been developed and successfully deployed in the service sector to include banking, retail, healthcare, staffing and financial services. WHAT DOES LEAN MEAN? Lean is the elimination of all forms of non value added work from the customers perspective (waste) in business transactions and processes WHAT DOES SIX SIGMA MEAN? Six Sigma is a statistical based methodology used to eliminate defects (errors or variations) in business transactions and processes © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 7
Slide 8: Why LeanSigma? LeanSigma incorporates the principle of Lean’s simplified flow and speed to increase business process velocity… …and incorporates Six Sigma’s approach to eliminating errors, variation and instability… …the combined tools, principles and methods of LeanSigma attacks the “hidden factory” of complexity in your business Applying Lean work practices to IT processes can drive ~20-30% in annual productivity improvements 8 © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
Slide 9: LeanSigma Focuses on Efficiency and Effectiveness of Business Processes “Doing Things Right” EFFICIENCY • • • • • • • “Doing The Right Things” EFFECTIVENESS Process quality Measurement systems Information & analysis Business integration Governance Organizational alignment Project Portfolio Management Examples: Total cost reduction as a % of systems supported Percent of IT spend under procurement management influence Service level agreements Business disruptions Solution delivery IT cost per employee Help desk tickets per $1M in sales Images per System Administrator Provider scores Examples: 100% SLA adherence $0 of lost revenue due to system outages 9 © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
Slide 10: Time is the Underlying Measurement of LeanSigma… The key is to reduce end-to-end processes and effort to “core value” • Customer’s definition of “core value” provides a common lens to identify, prioritize and achieve both tactical cost reduction and strategic advantage – simultaneously • Common element of time consumption allows for engagement and participation at every level in the IT organization as well as with the business and customers • Drives a rapid shift in paradigms by sifting “what we do” through a simple, common-sense filter • Accelerates bottom-line and operational results which can be leveraged for growth 10 © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
Slide 11: Core Value Value is always defined from the customer’s perspective Value-Adding Activities Transform products or information into products and services the customer wants Non-Value-Adding Activities Consume resources, but don't directly contribute to process or service 11 © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
Slide 12: IT Process Waste • Extra Features • Partially completed work; task switching • Unnecessary transportation; electronic and manual movement • Unnecessary movement; walking; looking for information • Waiting • Defects • Excessive Quality Checks 12 © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
Slide 13: Examples of Waste • • • • • • • Significant amount of support work done outside of Service Desk process (e.g., email, IMs) Service desk escalates large volume of L1-solvable work Users designate tickets as high priority regardless of true urgency and impact to business Tickets lack sufficient detail for resolution and require follow-ups and clarifications Excessive alerts and warnings Constant interruptions (e.g., walkups/IMs/Emails) prevent resources from focusing on individual tasks Resources often required to perform multiple roles (e.g., BAs perform QA, developers do support and project work simultaneously) Significant time spent on non-value added activities and waste (e.g., unnecessary documentation, service ticket clarification) Lack of prioritization guidelines limits ability to segment work Some roles technically overspecialized (e.g., mainframe skills only) limiting resource flexibility 13 13 © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. • • •
Slide 14: Eliminating Waste in IT Processes Your most powerful competitive advantages are where the work gets done “The secret is in the dirt.” -Ben Hogan 14 © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
Slide 15: Example: End-to-End Application Development • Total Elapsed Time (lead time) = 36 Weeks • Cycle Time Efficiency = 53% • Estimated Project Cost = $1.8M (assume $50k/week) • Total Elapsed Time = 18 Weeks (from 36 weeks) • Cycle Time Efficiency = 78% (from 53%) • Estimated Project Cost = $900,000 (from $1.8M) 15 © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
Slide 16: Example: Individual work practices - non-core activities and waste consume time and capacity Breakdown of developer activities Typical developer’s day Value Added Activities Other activities 9:00 Value Added 10:00 11:00 12:00 ▪ Frequent task switching drives losses in productivity build personal rhythm 70% ▪ Blocks too short to 8% Waste 22% Other Non-value added activities typically represent 10-16% of total (best practice) 2:00 4:00 5:00 6:00 7:00 ▪ Constant interruptions have significant impact on productivity (e.g., 3-5 interruptions/hour leads to 10-15% productivity loss) Total productivity SOURCE: CA Study improvement estimated to be 15-30% 16 16 © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
Slide 17: LeanSigma IT Transformation Journey Future State Realization Tactical “Quick Hit” Improvements • Functional opportunities with • Focus on the customer • Lean, customer-centric Awareness & Assessment – Leadership Engagement and Buy-in – Pilot End-to-End & Functional Assessments • • • • • • Value Stream Maps Metrics/KPIs Volume Data Supplier Performance Business Case Prioritized Improvement Opportunities • Scorecard limited impact on the customer value stream • Discrete processes – change processes • Relentless focus on waste • Leveraged for competitive advantage management; asset management • Aligned to end-to-end as well to manage cross-impacts • Leverage collaborative problem solving to develop solutions and rapidly implement • Begin end-to-end/systemic improvement • Start with the customer and work backward to the vendor – Organizational Awareness © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 17
Slide 18: Lessons Learned • Active leadership and ownership from Senior Leadership – – – – – Top organizational talent should be assigned to the effort to drive the on-going change Aligned metrics and incentives Everyone has to play Create a “burning platform” if one does not exist Walk the talk • • • Build “tension” – stretch goals Connections – integrate with other initiatives and teams, customer councils, governance • • Invite self and promote contributions Service Level Agreements – two way relationship Communicate, communicate, communicate – – – WIIFM Solicit participation at every level Complaints are a gift LeanSigma Metric-centric: (scorecards, business reviews, operating reviews, performance boards) • Quality, Cost, Delivery • Passion around Process – – – End-to-End Focus • • • Savings and improvements need to be integrated into the on-going budgeting process Do not mistake effort for results Expect results – not “let’s see if it works” 18 18 © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
Slide 19: REPRESENTATIVE CLIENT RESULTS 19 © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
Slide 20: Server Stand Up Process Profile Internal IT Organization of Fortune 500 Financial Services Firm Challenge The client was experiencing excessive inventory and high client dissatisfaction in its process of server installation. The team established their goals to design an uncomplicated, efficient process to allow the Central Hub to complete installation within 5 days Solution The go-forward plan was to drive for: • Obtaining leadership buy in for changes • Definition of data requirements for Server Stand Up (SSU) Process • Dedicated build teams • Definition of hardware standards Results • 50% handoff reduction • 85% loop back reduction • 33% reduction in groups involved • Reduced lead times resulting from standard hardware from 9hrs to 100 hrs of lead time eliminated from the process 20 © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
Slide 21: Data Center Asset Decommission Profile A Fortune 500 ITO company with annual revenues of over $20B Challenge The client was spending over $1.5M annually to maintain various servers in their datacenters. They were also taking an average of 45 days to actually perform the decommissioning of equipment throughout their datacenters. Solution The team collaborated to: •Develop an end-to-end process with 46% less steps •Stop billing after asset removal not before •Establish a decommission document with all critical data •Centralize change request creation Results •66% overall lead time reduction •78% less process decision points •83% less loop backs •71% less handoffs •25% less tools •81% less delays $1.5M annual maintenance costs reduction © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group. 21
Slide 22: Thank you Guidon Performance Solutions, LLC Email – rwince@guidonps.com Website – www.GuidonPS.com Phone – (866) 986-4414 22 © 2009 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.