IT Service Management And

Lean Fundamentals

Rate of Change

Deficit Reduction Action Plan

ResponsibleExpenditure Management

Reduction in Agency SpendingModernizing

and Reducing the Back

Office

Modernizing IT - SSC

“Do More with Less”

Assumption: The rate of change will accelerate

Aging Workforce

“Take Less and Do even Greater Things”

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Blueprint2020

Departmental Re-alignment

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A Time for Change An extract from the 20th Annual Report2 to the Prime Minister from Public Service Canada: “Although we face continuous change in our organizations, our important responsibilities and mandates remain. In today’s competitive world, a strong and high performing Public Service is critical to Canada’s success. We must be able to deliver the best advice to Ministers and implement our mandates with excellence. To succeed, a leaner public service must be one that is continuously performing at peak productivity. Managers should expect excellence from all employees.”

Note 2: Clerk of the Privy Council and Secretary to the Cabinet, for the year ending March 31, 2013

ITSM Challenges

Proliferation Of Computing Mobile Devices

What is ITSM’s

Value-Add ?

Reduction in Agency Spending

Cloud Solutions

ITSM Top Challenges

Assumption: The rate of change will accelerate

Outsourcing Versus

Insourcing 4

Speed of Change – Agility

Higher Availability

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ITSM from GoC perspectiveExternal Clients

Citizens/ Corporations

Provinces/ Municipalities

Other Agencies

GoC – Internal ClientsProgram Areas (Business)

ProgramArea

A

ProgramArea

B

ProgramArea

C

Internal Services Finance, HR, Legal, IM and IM/IT

ITSM Shared Services Canada

ITSM

ITSM

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“How can I increase the business value of our ITSM investment?”

A Key Question for CIO’s

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A Journey to Lean

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What is Lean? A business strategy which enables organizations

to work more efficiently to meet today’s challenging times of doing more with less

A series of principles, concepts, tools and techniques focused on the elimination of Non-Value Add activity referred to as “Waste Conditions” in any process1

Seeks to correct inefficiencies in processes, enhancing an organization’s capability to deliver on its mission

An employee-empowering continuous improvement framework

A different way of thinking Note1: James Womack, Daniel Jones, and Daniel Roos - 1990 book The Machine that Changed the World to describe the manufacturing paradigm (often referred to as the Toyota Production System).

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Lean is not … Lean does not displace ITSM models and process

frameworks, “it enhances them”

Lean is not just another quality or improvement “program of the month”

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Benefits of Lean Lean can dramatically improve the performance and effectiveness of ITSM processes in Federal Public Sector processes in a relatively short timeframe.Benefits:

Eliminate or dramatically reduce backlogs Significantly reduce lead times Improve the quality and consistency of work

products, services and activities Allocate more staff time to “mission critical”

work Reduce process complexity Enhance process transparency to internal and

external audiences

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Worldwide Government Agencies are embracing Lean

Government of Canada Canadian Provincial Governments Government of USA USA State Governments International Government Agencies

Where is Lean Deployed?

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Worldwide Government Agencies Worldwide federal government agencies are achieving

rapid results using LeanThe level of deployment of Lean within an

organization is directly correlated to the recognition of the “Burning Platform” by leadership and management levels

Levels of Transformation3 PRINCIPLE - DRIVEN

SYSTEM - DRIVEN

TOOL - DRIVEN

IMBEDDING PRINCIPLES INTO CULTURE

STRUCTURING TOOLS INTO A SYSTEMS CONTEXT

USING SPECIFIC METHODS TO CREATE POINT SOLUTIONS

Note 3: Levels of Transformation - Shingo Prize – Operational excellence

Public Sector

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Ministry of

Health

Ministry of

Health

Regional Health

Authorities Ministry of Health and Long Term

Care

Northern Alberta

Dev Council

Office of the CIO

Health PEI

Finance et Economie Québec

Dept of Agricultures, Aquaculture and Fisheries

AO

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2013: Over 20 federal agencies have used Lean to improve the speed & effectiveness of their processes

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The 5 Lean PrinciplesUnderstand Value from the Client

Perspective

Understand the Value Stream

Create Flow Migrate to Pull

Pursue Perfection through

Continuous Improvement

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Lean considers Value as what matters to the ClientLean Concepts: To maintain the Client Value perspective

throughout the end to end journey until the product/service is delivered

Lean Principle #1Understand

Value from the Client

Perspective

• ITSM focuses on the customer’s perspective while aligning information technology (IT) services delivery to the needs of the organization

Lean Principle #1 -

Focusing on the value from the Client perspective creates an opportunity for integrated-process thinking

From the Client perspective, 60% to 80% of the process activities are considered to be Non-Value Add or Waste

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1

Understand Valuefrom the Client Perspective

NVA VA Waste

Waste NVA Wast

e NVA VA Waste

This diagram could reflect most existing processes

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A Value Stream represents all the activities required to bring a product or service to a Client

Lean Concept: A Value Stream is composed of two (2) types

of activities: Value Add Non-Value Add

Lean Principle #2Understand the Value Stream

• ITSM is the delivery of end-to-end services• ITSM assessments and audits are used in

determining the current state of ITSM within an organization and defining its desired future state

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Value Stream - Value Add

2

A Value Add activity is defined by the following criteria: Value Add

Recognized by the Client as adding value

Directly contributes to the creation and delivery of the product or service Is done right the first time

Policy Value Add Compliancy to GoC

legislative/policy framework Compliancy to departmental or

agency policies

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Value Stream – Non-Value Add

Activities that Must Be Done Activities that must still be done

because of limitations with current technologies and assets

Maintenance activities Waste

Consumption of resources without adding value - “Muda”

Unevenness in the operations - “Mura” Overburdening of resources - “Muri”

A Non-Value Add activity can be classified into two (2) categories: 2

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Value Stream - Non-Value Add

Non-Value Add

Activities that must be done

Due to current

limitations Maintenance

Activities

Waste

Muda Resource

Consumption Mura

UnevennessMuriOver-

burdening

How much process waste is generated by ITSM frameworks?

Waste (Muda) Conditions

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Understand the Value Stream

There are eight (8) Waste (Muda) conditions:

Muda - Waste Types & ConditionsTypes Muda Waste Examples

Defects and Rework

Data errors, Missing information, incomplete templates Errors in documents, typos in emails Confusing instructions or requirements

Overproduction Unneeded reports, templates, Printing multiple copies Preparing large quantities of documentation just in case it is

required Doing work not requested, Excess email Implementing an enterprise scale methodology with numerous

templates when only a couple of templates are required

Waiting Client waiting, Waiting on decisions Waiting for people in meetings Related to multi-approval cycles Time for approval cycles, waiting for information or decisions Poor flow, batch, queuing, results in periods of inactivity in a

downstream process activity Waiting on preceding task

Negligence Underutilizing human capabilities and creativity Delegating tasks without ensuring adequate training Building silo’s

Transportation Moving people, products & information Report routing Client application routing

Inventory (Excess)

Backlog of work (service requests, application requests, plan approvals)

Excess materials for both external and internal Clients

Motion (Excess) Poor layout of office creates unnecessary “steps” to printer and copier

Unnecessary movement to find files or supplies, travel to meetings

Client asked to perform extra steps

Extra Processing Too many process steps, overly complex processes Too many signature levels / approvals Too many meetings

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Waste - Mura

Irregular, inconsistent, uneven, and unbalanced workloads associated with a resource (people, process or technology)

Understand the Value Stream

Unevenness in a process where the source of variation is not caused by the Client

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Waste - Muri

Placing excessive demand on equipment, facilities, and people caused by Mura and Muda

Muri is pushing a machine or person beyond natural limits

Overburdening people results in health, safety and quality problems

Understand the Value Stream

Overburdening of resources

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Lean Principle #3

Create Flow Flow is the sequencing of the Value Add activities while always keeping the Client Value at the forefront of each step

Lean Concept: To achieve a smooth and leveled process

• ITSM is process-focused and aligns to process improvement frameworks and methodologies

• ITSM provides a framework to structure IT activities and interactions with customers/users

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Quality Metrics - Client Satisfaction

- % returned for Rework- % Complete

- Rolling First Pass Yield (How often sent back)

Process Outputs Metrics- Backlog

- Work in Progress - Inventory

- Production (Service/Product)

Time Metrics- Lead, Takt, Process, Cycle

- VA, PVA, NVA, Waste- Completion (Best, Average, Worst) - SLA related , % on time delivery

- % Activity of total process

Process Complexity - # of Handoffs

- # of Decisions - Waste Delay

- # of Process Steps - Waste Factories

Cost Metrics - Salary Costs Savings

- O&M P/Services Savings- Product Cost Savings

Leadership/ Management Engagement

Deployment & Employee Satisfaction

Lean Metrics and Types

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Lean Principle #4Upstream process activities only occur when real demand exists at the downstream operation

Enables Just-In-Time delivery of products and servicesLean Concept: The combination of Flow and Pull with support

from Visual Indicators such as a “Kanban” results in an effective and efficient process

Migrate to Pull

• ITSM promotes best practice process models• ITSM Tools Universe highlights available

ITSM technology for management of IT Services

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Pursue Perfection through

Continuous Improvement

Lean Principle #5Lean Thinking becomes part of your day-to-day approach

Lean Concept: The selection and applicability of the different

Lean tools depends on process complexity, desired outcome and metric(s)

• Service Management needs to be seen as a practice, not a project

• Service management takes practice, commitment and focus

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Lean / ITSM Outcomes

The “value” is defined by the Client Increases visibility into the complete journey of the

product or service and ITSM enabling role Develops a culture of continuous improvement Creates new ways of working Improves quality, cost effectiveness, IT service

delivery and responsiveness to the Client

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The 5 Lean Principles and ITSM • ITSM focuses on the customer’s perspective

while aligning information technology (IT) services delivery to the needs of the organization

• ITSM is the delivery of end-to-end services• ITSM assessments and audits are used in

determining the current state of ITSM within an organization and defining its desired future state• ITSM is process-focused and aligns to process improvement frameworks and methodologies

• ITSM provides a framework to structure IT activities and interactions with customers/users• ITSM promotes best practice process models

• ITSM Tools Universe highlights available ITSM technology for management of IT Services

• Service Management needs to be seen as a practice, not a project

• Service management takes practice, commitment and focus

Understand the Value Stream

Create Flow

Migrate to Pull

Pursue Perfection through

Continuous Improvement

Understand Value from the

Client Perspective

Understand Value from the Client

Perspective

Understand the Value Stream

Create Flow Migrate to Pull

Pursue Perfection through

Continuous Improvement

Lean Principles & Tools/TechniquesGemba

Genchi Genbutsu

Spaghetti Diagram

Value Stream Mapping

Waste Identification

FishboneDiagram

5 Whys

PullKanban

Pay-off Matrix

Poka-Yoke

Andon

SMART Objectives

Lean Metrics

Kaizen Event

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A3 Report

PDCA Cycle

Lean Action-out

Report

Famous Quotes If we are in a constant and accelerated state of change then maybe…“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.” Darwin

If we need to adapt then maybe…“We can’t keep doing things the same way and expect different results.” EinsteinIf we need to change then maybe…“We can't solve today’s problems by using the same kind of thinking we used when we created them.” Einstein

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Q & A

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Helping Transform the Business

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Ottawa, OntarioK1P 5H9

www.bpmconsulting.ca