How to Enable Lean IT in Your Organization

By Sunny Gupta  |  Posted 2010-08-20 Print this article Print

Business leaders want to know what value they are getting for the money they spend on IT. But IT has been so busy supporting other departments that it has fallen behind in creating systems that help drive decisions based on ROI and understanding of cost structure. Here, Knowledge Center contributor Sunny Gupta explains how IT can provide cost transparency to business leaders, as well as create lean processes that will enable IT to quickly improve service levels in a time frame that optimizes business value.

There are many lean experts when you look across industries or business functions. We're all familiar with lean terms such as lean manufacturing, Total Quality Management (TQM), kaizen, Six Sigma and the rest. When you boil these down and apply lean to IT, enterprises are presented with four guiding pillars for creating lean IT operations.

Guiding pillar No. 1: Eliminate waste

Trim the fat. Reduce costs. Focus on the highest value activities. To be clear, this is not a race to the bottom of low-cost IT. This is about focusing on value and eliminating that which is truly waste. IT leaders need to create a culture within IT where everyone is continuously seeking to improve efficiency.

Today, there is still a lot of "fat" in IT. Servers run at an average of less than 10 percent utilization. Storage can be anywhere from 25 percent to tapped out. Data center facilities are often grossly underutilized. And very few IT organizations have a process to identify services that are no longer in use or highly valued.

Guiding pillar No. 2: Focus on the customer

IT leaders need a process to understand what the customer values and how IT can most efficiently and cost-effectively deliver that value. In this case, the customer is usually an internal customer such as a line of business. The trick is to understand the measure of value that the user puts on IT products and services-not IT's own measure of performance or quality.

Business users talk about e-commerce customer profitability, cost per transaction for an application, and quality and business performance of the application. IT needs to communicate with the customer using these same terms.

IT leaders should focus on delivering value to the customer and creating processes for discussing how value is delivered. Many people are talking about this in terms of cost transparency and tracking consumption, quality and utilization. These metrics should be reviewed quarterly so that IT can become aligned to business needs.

Sunny Gupta is co-founder, President and CEO of Apptio. Sunny's career in enterprise software spans more than 16 years, with roles in general management, strategic marketing, product management and business development. Most recently he was the Executive VP of Products at Opsware, and was responsible for all of the company's product businesses (up to its acquisition by HP for over $1.6 billion). Prior to Opsware, Sunny was the co-founder and CEO of iConclude, which pioneered the IT runbook automation market (and drove its acquisition by Opsware for $62 million in less than two years from inception). Before founding iConclude, Sunny ran the Java/.NET Performance Management Product Group for Mercury Interactive (acquired by HP for approximately $4 billion) and served as VP of Marketing and Business Development at Performant (acquired by Mercury Interactive). He also served as General Manager of Business Development at Rational Software (acquired by IBM for approximately $2 billion), while playing a role on the team that helped scale that company from $300 million to $850 million in revenue. Sunny also co-founded Vigor Technology before its acquisition by Rational, and held product management and consulting roles at Easel Corporation and IBM. Sunny earned a bachelor's degree in computer science from the University of South Carolina. He can be reached at

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