Using Lean IT to do more with less

Improving the business value of IT

by Infosys Lodestone

Lean IT: doing the right things well

Table of Contents
Executive Summary................................................................................................................................................................................... 3
Lean IT Origins........................................................................................................................................................................................... 4
Lean IT Goals............................................................................................................................................................................................. 4
Lean IT Tool Kit....................................................................................................................................................................................... 5
A closer look at Value Stream Mapping and 8 Types of Waste................................................................................................................ 6
Making Lean IT work for you..................................................................................................................................................................... 8
Case Study: Making the Service Request Management Process 75% faster.......................................................................................... 9
Conclusion............................................................................................................................................................................................... 10

Executive Summary
The Lean IT Opportunity
Our research shows that one of the greatest challenges CIOs face is finding ways to release IT capacity from just keeping the
lights on to focus on the primary value chain activities that deliver what the business values most. In other words, they need
to do more with less.
We believe that Lean IT offers CIOs a tried and tested set of tools which can be applied swiftly and pragmatically to rise to this
challenge. Lean IT enables IT to focus on the work that truly adds value to the business and to simplify the processes used to get
the work done.
Research shows that many global companies have already identified the ability to use Lean IT as key IT capability and that applying
Lean IT can free up 20% to 30% of IT capacity by streamlining IT processes, automating routine functions and eliminating redundancy.1
In other words, Lean IT raises quality and reduces cost by focusing on Doing the right things well.
In this White Paper, we explain what Lean IT is for, the main tools that it uses, and how to apply them successfully to improve
business value.
Lean IT Origins
Lean was originally developed to improve quality and reduce cost in manufacturing. Later, Lean tools were used to improve quality and
reduce costs of services. In Lean IT, the thinking has evolved into a robust approach for improving the business value of IT by improving
quality, eliminating waste, shortening lead times and reducing cost.
The Lean IT Tool Kit
The Lean IT Tool Kit has two sets of tools that simplify how IT does business:
Value Alignment Tools that ensure that IT work is focused on delivering what the Business values
Voice of The Customer
Value Stream Mapping
8 Types of Waste
Value Delivery Tools that ensure that IT work is executed efficiently
5S Analysis
Pull /Demand Systems
Continuous Flow Design
To get the best results from using these tools, they need to be focused on the right topics. In this paper we give relevant IT examples
for each tool.
We have taken a deeper look at the Value Stream Mapping and 8 Types of Waste as we believe they will set the Lean IT agenda for the
organization. We illustrate the use of the tools based on our experience of working with a client to produce a leaner IT Service Request
Management process.
Making Lean IT work for you
The potential value of Lean IT is best realized by taking a pragmatic, results focused approach to engaging your people in adopting a
lean mindset and managing the application of the Lean IT Tool Kit. We have developed a simple four step process for doing this which
enables you to lay the foundations for Lean IT, get lean and measure success.

Lean IT Origins
The approach that eventually became known as Lean Manufacturing was developed in the 1980s to find ways to improve quality
while reducing costs.
A decade later, the global success of Lean Manufacturing led to Lean principles being applied to other environments e.g. Lean
Office, Supply Chain, Health Care, and the Service Industry.
The rigorous application of Lean principles to IT services and processes started this century, in parallel to the growing adoption
on IT standards such as ITIL.

Lean Manufacturing
Optimization of production
work flows
Application of Pull/Just in Time
principles to the production/
assembly line
Striving for smooth production
flows

Lean Services

Lean IT

Focus on work flows not

associated with the making of
hard products where focus
on tact time is not key

Optimization of IT service
provisioning

Elimination of waste in the

course of executing business
processes

Holistic view on waste

elimination in IT-enabled
business processes and IT
service provision

Optimization of IT-enabled
business processes

The adoption of Lean IT globally is growing:

In a study on business and technology strategy 64% of the global executives surveyed were either deploying or piloting
Lean IT already.1
Analysis of Internet search results shows that interest in Lean IT has massively increased since autumn 2011.2
Our project experience is that more and more clients expect a well-structured approach to reducing the IT effort, cost and
lead-time and to achieving a closer alignment with the businesss perception of value.

Lean IT Goals
An IT organization is Lean when it systematically pursues the continuous ambition of establishing processes and services
that are:
At the right level of quality
Waste free
As efficient and smooth as possible
Aligned with changing business needs and priorities.
This ambition is captured in the four goals of Lean IT.

 Quality is measured by the ability of IT

Services to meet the levels of Utility (fitness
for purpose) and Warranty (reliability of use)
agreed with the business

Waste is any activity that takes up

time, capacity or resources but does
not add value to an IT Service from a
Business viewpoint.

Improving Service Quality increases ITs

Business Value

Eliminating waste enables IT to be

more agile and responsive to Business
requirements

Improve Quality

Reduce Total Cost

Eliminate Waste

Reduce Lead-time

Total cost is the direct and indirect cost

of provisioning of IT-services including
the cost for outsourced services.

Lead-time is the time taken to execute

a process or transform service
components into finished IT services.

Lean drives cost reduction via waste

elimination and lead-time reduction.

Reducing lead-time to respond faster

to changes in customer demand and
improve return on investment.

For IT, these goals are not entirely new; quality improvement and reduction of total cost have been around for a long time and
waste elimination and lead-time reduction are another manifestation of the drive for business process excellence.
What is new about Lean IT is how these goals are achieved:
A small number of tried and tested tools that both IT and the Business can use together
A pragmatic focus on governing specific initiatives targeted on fixing real problems with rapid results
The creation of a sustainable Lean IT culture that engages people in both the Business and IT in permanently altering the
approach to getting business value from IT.

Lean IT Tool Kit

The Lean IT Tool Kit has six related techniques that broadly fit into two sets:
Value Alignment Tools that ensure that IT work is focused on delivering what the Business values
Voice of The Customer: identifies the target audience of a service or process and defines their expectations and
requirement for it.
Value Stream Mapping: Graphically displays the steps in a Value Stream, an end to end process from customer demand
to demand fulfillment, capturing the flow of work items and information involved. The visual and quantitative nature of the
Value Stream Map makes it easier to identify waste and other constraints on value delivery:
8 Types of Waste: anything in a process that does not add value from the businesss point of view can be defined as waste.
8 Types of waste provides a framework for identifying the most common sources of waste, i.e. process inefficiencies that
compromise process performance and can result in poor service quality.

 Value Delivery Tools that ensure that IT work is executed efficiently

5S Analysis: provides five directions of thinking to eliminate waste and to organize the work in a way that activities can
be performed as efficient as possible.
Pull/Demand Systems: ensure that any process activity is triggered by its preceding activity and no activities are performed
to meet possible future need or to consume surplus capacity.
Continuous Flow Design: balances the workload and cycle time in the individual process steps to facilitate a smooth,
consistent and uninterrupted flow of activities in process execution.
Value Alignment Tools focus IT and the business on doing the right things. Value Delivery Tools focus on doing them well.

Voice of the
Customer

Value Stream
Mapping

identifies the target audience

of a service or process and
defines their expectations and
requirement for it.

Graphically displays the process

steps and the flow of work items and
information involved in an end-to-end
process, starting with a customer
raising a demand and finishing with
the demand being fulfilled.

5S Analysis

Ensure that any process activity is

triggered by its preceding activity.

Pull/Demand
System

The visualization and quantification

of the process flow makes it easier to
identify waste and other constraints
on value delivery.

8 Types of
Waste

Waste is defined as something in

process that does not add value from
the businesss point of view.
The 8 Types of Waste describe
process inefficiencies that
compromise process performance
and can result in poor service quality.

Provides five directions of

thinking to eliminate waste and
to organize the work in a way that
activities can be performed as
efficient as possible.

No activities are performed to

meet possible future need or to
consume surplus capacity.
Visualize workload and capacity
that facilitate a smoother
distribution of work.

Balances the workload and cycle

time in the individual process steps.

Continuous
Flow

It facilitates a smooth, consistent

and uninterrupted flow of activities
in process execution. Continuous
flows are particularly important for
highly repetitive processes.

A closer look at Value Stream Mapping and 8 Types of Waste

We believe that the two key tools in the Lean IT Tool Kit are Value Stream Mapping and the analysis of eight types of waste.
Below we describe these in more detail and give IT examples.
Value Stream Mapping
Value Stream Mapping (VSM)3 is a technique that graphically displays the process steps and the flow of work items and information
involved in an end-to-end process, starting with a customer raising a demand and finishing with the demand being fulfilled. The
visualization and quantification of the process flow makes it easier to identify waste and other constraints on value delivery.

Applying Lean IT principles and best-practices within an IT organization enhances business efficiency and effectiveness in
two ways shown below:
Lean IT Value Stream Mapping
Capturing the particular process steps, information flows and relevant key metrics describing and quantifying the
current flow of activities and items in the Value Stream in order to improve efficiency and eliminate waste.
Inward-Facing IT Value Streams

Outward-Facing IT Value Streams

Applying the principles and tools continuously to

improve IT operations, services and projects.

Engaging data, information systems and the IT

organization in partnership with the business
continuously to improve and innovate business
processes.

Simplification, standardization and increasing

transparency of IT services continuously to improve
customer value-add, reliability and efficiency.
Example Inward-Facing IT Value Streams are:
IT Service Management processes
IT Organization Optimization

Example Outward-Facing IT Value Streams are:

IT Strategy Development
IT Governance and Demand Management
IT Portfolio Management

IT Vendor Selection and Management

Typical metrics, which are documented in the course of value stream mapping, are:
Lead-time (how long does it take until a particular process step is finished)
Cycle-time (what is the net time to perform the activities involved in a particular process step)
Number of resources assigned to a process step
Number of items in inventory (waiting to be processed)
Quality level (percentage of items that have been processed without errors)
The right metrics in combination with a proper graphical representation easily help to determine waste, unbalanced workload,
broken interfaces etc.
8 Types of Waste
The 8 Types of Waste4 describe eight different characteristics of process inefficiencies that compromise process performance
and can result in poor service quality. The evaluation whether something in a process is considered to be waste is generally
taken from a customer`s point of view. Anything in the process has to be useful, meaningful and effective. Although originally
developed for manufacturing, these potential sources of waste are still relevant to IT.
Defect

Over Production/
Over Provisioning

Inventory

Over Processing

Definition

Non-conformity of a
process or process step
outcome

Delivering more than what is

necessary to fulfill customer
requirements (Quantity)

Keeping available more services

or material than needed or
backlogs that occur in the
execution of a process

Providing more options,

functionality, features than
needed/requested by the
customer

IT
Examples

Software bugs

Software licenses on stock

System outages

Deployment of automation scripts

even for events with rare
occurrence

Unused applications in
standardized software loads

Unauthorized hardware or
application changes

Mirroring of file servers that do not

contain business critical data

Rework (task has to be

repeated)

Cost for maintaining idle services,

material (resources, depreciation,
floor space) and disposal

Impact

Increase of lead time;

Cost for material, time,
resources involved in the
rework

Problem tickets waiting for

resolution
Change requests waiting for
decision/ implementation

IT portfolio elements that are

not requested
An Incident Management
System supports multiple
levels for severity where three
levels are sufficient

Risk of outdated services or

material in the moment they are
requested by the customer

Increased effort and cost for

training and support due to
higher complexity

Cost for follow up, maintenance

and coordination of inventory

Higher chance for failure or

defects

Transporting

Motion

Waiting

Unused Knowledge

Definition

Physically moving work

items between subsequent
tasks in a process

Physical movement in the course of

performing a particular task

Idle time until arrival of a work

item from a downstream
process task

Unconsidered knowledge and

experience of people involved
in the process

IT
Examples

E-mailing data to upstream

process steps, e.g.
customer data is extracted
from a CRM system into an
Excel spreadsheet and
send to marketing for
performing a mailing
campaign

Manually moving data, e.g. look up

data in application A to complete a
transaction in application B

Slow application response times

Problem solutions and/or

workarounds are not
documented and shared
consequently

Waiting time for the

upstream task before the
activity on the work item
can start
Extension of lead time

Longer cycle time until task

completion

Impact

On-site visits to resolve an incident

Long synchronization/
replication cycles between
application platforms

Non-productive time of
resources involved in upstream
process tasks

Higher resource occupation

Missed opportunities for

process improvement and/or
simplification;
Missed cost-saving potential

Making Lean IT work for you

The potential value of Lean IT is best realized by taking a pragmatic, results focused approach to engage people in IT and the
Business to adopt a Lean mindset and use the Lean IT Tool Kit to take action on real problems that deliver real benefits.
We have developed a simple four step process for doing this which enables you to lay the foundations for Lean IT, get lean and
measure success.

Laying the Lean IT Foundations

Getting Lean and Measuring Success

Lean IT Strategy

Lean IT Mobilization

Lean IT Initiatives

Lean IT Scorecard

Be clear on your Lean IT

objectives, priorities and
metrics

Sell the strategy and create

a sense of urgency

Run parallel Lean

initiatives, each focused
on a specific measurable
improvement using Lean
IT tools

From the beginning,

capture and publish the
measurable impact of
Lean

Drive Lean IT with small,

focused initiatives

Empower Lean IT Leaders

to build and nurture
competence

Start with Internal Value

Tune the Lean IT Tool Kit to
Streams unless there is an
meet your needs
external burning platform Operationalize the Portfolio
Manage the Lean IT
Management and the
initiatives as a Portfolio
Metrics
Measure the performance
of the Portfolio

Build Communications
capability and capacity

Share ways of working and

results across the Lean IT
initiatives
Empower and sell the
initiatives through powerful
communication and good
Portfolio Management

Use the scorecard to

prioritize initiatives within
the Portfolio
Celebrate success and
create a sustainable Lean
IT mindset

In our experience, Lean IT delivers the best value when leaders in the Business and IT spend time laying the foundations to
create and nurture a sustainable Lean IT culture that permanently alters the approach to getting business value from IT. This
requires strong leadership from the Business and IT to:
Define and sponsor the Lean IT agenda
Promote the Lean IT culture
Engage the right people to deliver Lean IT initiatives
Set up and empower the right governance process for Lean IT
Celebrate its success

With the right foundations have been laid, we believe the best way forward is through a portfolio of small Lean IT initiatives,
focused on real problems and opportunities. The Lean IT Initiative Portfolio needs to be governed jointly by the Business and IT to:
Enable a coordinated portfolio of targeted initiatives to move the Lean IT agenda forward
Drive synergies and make trade-offs between initiatives
Measure the business value delivered by the Lean IT initiatives.
Control resourcing and costs
Working together, the leadership and the governance of Lean IT reinforce the behaviors and provide the tools and metrics
needed to embody Lean IT as THE normal way of doing business rather than as a one-off program.

Case Study:
Making the Service Request Management Process 75% faster
In the course of a re-design and transition project for the Customer SAP Competence Center our client, a globally operating
biopharma company experienced significant problems in the fulfillment of service requests.
The internal IT-customers complained that they had to wait too long for the completion of standard requests like the creation
or modification of a new SAP account, for adding or removing roles or modifying a SAP network printer.
Value Stream Mapping
Together with the staff members who were actively involved in the service request management the project team developed
a Values Stream Map of the process.
Using sample data from the ticketing system the project team calculated an average lead-time for the fulfillment of service
requests of 25 days. However, the cycle- time, the time people actively worked on a request in average was 3 hours only. This
meant that only 1,5% of the time it took to fulfill the request added value from a customer perspective.
8 Types of Waste
By looking deeper into the steps with the largest difference in lead-time versus cycle-time the project team discovered
significant waste:
Requests were raised in inconsistent formats (defects)
It was not clear for the requestor which information had to be provided in order to process the request (over- or
underprovisioning)
The approval process involved the physical signature of the request form, which sometimes led to printing and scanning of
a request form multiple times (transporting and motion)
Roles and authorization levels were unclear and not applied in a consistent way (defect)
5S and Continuous Flow
The measures the project team applied followed the 5S and Continuous Flow principles:
To resolve the inconsistencies in the request formats a new electronic request form was created. This also resolved the
question of which information had to be provided for a particular type of request.
An electronic workflow forwarded the requests between the different activities and notified the people involved in the
approval and processing of a request.
S
tandardization of the roles and authorization levels ensured transparency, comprehensibility and adherence with the
corporate guidelines.
Lean IT Result
By implementing these changes and training the people accordingly the client accomplished a decrease in average Service
Request time from 25 days to 5 days.

Conclusion
Lean IT enables the Business and IT to work together to focus on doing the right things well. It offers a simple but robust Tool
Kit that increases quality by simplifying delivery. With the right leadership and governance it can permanently change the ability
of IT to deliver Business Value.

References
1 R
 OGER ROBERTS, HUGO SARRAZIN, JOHNSON SIKES: Reshaping IT management for turbulent times, McKinsey
Quarterly, December 2010
2 Google Insights for Search, trend analysis for Lean IT searches
3 
MIKE ROTHER, JOHN SHOOK, JOHN, Learning to See: value-stream mapping to create value and eliminate muda,
Brookline, MA, Lean Enterprise Institute, 2003
4 TAIICHI OHNO, Toyota Production System: Beyond Large-Scale Production, Productivity Press, 1988
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Authors
Stefan Schrader, Managing Consultant, Germany
Stefan Schrader has more than 10 years experience in business process improvement, process
management and business transformation in different industries for example automotive,
banking, insurance and telecommunications. He is an experienced Lean Six Sigma Master
Black Belt, moderator and Kaizen workshop facilitator working with cross-functional teams in
different industries and at different levels. His origins are in IT, where he held various positions in
infrastructure operations and support.

Mike Murphy, Partner, Switzerland

Mike Murphy has 14 years experience of designing and implementing global IT transformation
programs for major companies, often as part of an ERP-enabled business transformation. He has
delivered consulting projects in Pharma, FMCG, Financial Services and Manufacturing all around
the world and managed the global delivery of offshore application services. Before joining Infosys
Lodestone, Mike worked for Price Waterhouse, PwC and IBM. Mike leads Infosys Lodestones IT
Excellence practice.

About Infosys Lodestone

Infosys Lodestone, a fully owned subsidiary of Infosys, is a management consulting firm advising international companies
on strategy and process optimization as well as IT-enabled transformation. Adopting a value-integration approach, Infosys
Lodestone is focused on a value-adding combination of management and IT consulting. The firm, with its 1200 employees in 17
countries on five continents, delivers consulting services primarily geared to the life science, chemical and financial services
industries as well as the investment, automotive and consumer goods sectors.
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