How to Enable Lean IT in Your Organization
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.