Implement a Methodology for Constant Improvement

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

Guiding pillar No. 3: Implement a methodology for constant improvement

Markets were created around software focused on measuring cost and quality, aligning resources, empowering workers and measuring team performance for manufacturing or corporations as a whole. IT needs data-driven processes and systems for intelligently and continuously reducing waste and increasing value. Lean IT will only meet its potential if there is a deep understanding of cost drivers, value chain and quality metrics, as well as a grassroots empowerment to act on that data.

Guiding pillar No. 4: Establish financial agility

A key component of lean is just-in-time (JIT) or flow. In the manufacturing industry, the net outcome is that "the factory" can adjust to business needs quickly in order to meet the changing needs of the customer. A lean IT department will be able to react to business fluctuations by reducing spending in down cycles, quickly ramping up in up cycles and rolling out new services quickly, as needed.

This requires a deep understanding of the cost structure, how those costs relate to business services and how those services are susceptible to business fluctuations. Such costs should be also broken down by fixed or variable, direct or indirect and CAPEX or OPEX. A lean, proactive IT department should plan for normal business cycle variances (that is, "What if business is down 10 percent this year? How is that going to affect IT and how can IT react? What if business grows by 15 percent over plan?").

Understanding these business cycle variances allows a company to achieve financial agility. IT leaders should create teams, processes and development methodologies that will enable IT to make quick shifts or improvements to service-or to roll out new services-in a time frame that optimizes value for the organization.

Achieving lean IT in three steps

To achieve lean IT, companies must focus on three key objectives: become a world-class service provider to the business, establish ongoing IT/business dialogue and optimize IT decisions. Let's take a closer look at each step:

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

Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel