As a recent subscriber to ITIL News, I read a well constructed article on the website regarding Service Reporting. It started by referring to the commonly used phrase of 'aligning IT with the business', and then talked about how IT Managers' business counterparts don't quite understand how IT spending creates business value, and that IT staff feel as if they're seen as administrative overhead, or worse, that they are wasting hard dollars buying expensive new technologies just because they're "cool." The author then asked the question: 'Why else would the business people pressure IT to "do more with less" year after year or "get outsourced"?'
This inspired me to reply, referring to a recent strategic service improvement program that I delivered for a leading global IT Services company. This company, like so many others has to respond to the pressure of "doing more with less" to remain competitive in these austere times. In its quest for achieving this panacea it has launched a number of new initiatives, but one that is really delivering business benefits is 'Lean IT'
The challenge for businesses today is to find new ways to dramatically reduce costs and improve investment returns while better serving their customers, e.g. doing more with less. To meet these challenges, organizations are turning to Lean thinking, which seeks the elimination of all forms of waste, strives for continuous improvement, and simplifies business processes. Lean is an improvement methodology, but with a focus aiming to enhance process flow, reduce cycle time, and eliminate waste. By applying Lean tools and techniques, organizations can become more competitive, agile, and responsive to customer demands. Hence, 'aligning IT with the business'
In the Lean program to which I referred, we directly reduced the operating costs by 23% within a 9-month period. This was achieved via a combination of 'Leaning' operations and better use and exploitation of technology developments. This included a proof of concept phase followed by the implementation of Lean improvements. As one would expect from any well-managed program, the business continues to realize benefits, including further savings, long after this program closes.
The benefits realized were not only financial, although without sound financial benefits being represented in the business case, this (as with other programs) would not have got off the ground. This Lean Program has realized different types of benefits, and have been categorized in MSP®[1] terms (Managing Successful Program) as Direct Non-Financial and Indirect Benefits, as well as Financial Benefits of course. Lists of the benefits realized within each of these categories are shown in the diagram below.
[1] MSP® is the UK Government recognised methodology that represents proven programme management good practice in the successful delivery of transformational change through the application of programme management. MSP® is a Trade Mark of the Office of Government Commerce.
The Lean methodology is repeatable, as it is based on core principles, grouped tasks of which can be monitored and benefits realized over the period of delivery of the program and beyond. For further details, please refer to the author - contact details shown below.
Steve Inkpen
Independent Management Consultant
steve.inkpen@hotmail.co.uk
Steve Inkpen is an independent management consultant. In a career spanning over 25 years in the application of IT and IS in business and engineering, Steve is an accomplished programme manager in complex international and national transformation programmes, and provides multi-discipline expertise and advice. This can range from the development and stakeholder agreement of IS Strategy, IT advisory fulfilment, and delivery of change programmes, through to managing post implementation and business as usual operations. He has not only managed the whole project and programme lifecycle stages from inception, business case, initiation, governance, delivery, and post-implementation operational support, but has also been a doer at each stage. This has given him a particularly special insight into the world of IT and IS application in business.
Steve has a background in private and public sectors as a consultant, interim manager, departmental manager, line manager, and technical and operational support manager. This has included managing 3rd party suppliers and strategic sourcing.