Lean IT Foundation

Increasing the Value of IT

Version 1.11
February 2019
Table of Contents
Scope and Purpose 5
Foreword.............................................................................................................................................................................................................. 6

1. Introduction 7

2. Lean 8
2.1 History............................................................................................................................................................................................................. 8
2.2 Six Sigma and the relationship with Lean................................................................................................................................... 9
2.3 Scarcity.......................................................................................................................................................................................................... 9
2.4 Aspects of Lean...................................................................................................................................................................................... 10
2.5 Being Lean................................................................................................................................................................................................... 10
2.6 Paradigm Shift.......................................................................................................................................................................................... 10
2.7 Lean IT and IT Frameworks................................................................................................................................................................11
2.8 Lean IT, Agile and DevOps.................................................................................................................................................................. 13
2.9 Lean Community...................................................................................................................................................................................... 13

3. Key Principles of Lean 15

3.1 Waste.............................................................................................................................................................................................................. 16
3.2 Improving using the Principles......................................................................................................................................................... 17
3.3 Types of activities................................................................................................................................................................................... 17

4. Characteristics of Lean IT 19

5. Structuring Lean IT 20
5.1 Lean IT Dimensions..................................................................................................................................................................................20
5.2 Continuous Improvement with Kaizen........................................................................................................................................ 21

6. Customer 23
6.1 Value................................................................................................................................................................................................................23
6.2 The Customer ...........................................................................................................................................................................................24
6.3 Critical to Quality.....................................................................................................................................................................................25
6.4 Investigating VoC.....................................................................................................................................................................................26
6.5 Voices.............................................................................................................................................................................................................26

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7. Process 27
7.1 Process...........................................................................................................................................................................................................28
7.2 Basic processes.........................................................................................................................................................................................28
7.3 Push and Pull..............................................................................................................................................................................................29
7.4 SIPOC..............................................................................................................................................................................................................29
7.5 Value Stream Mapping..........................................................................................................................................................................30
7.6 Developing a Value Stream Map...................................................................................................................................................... 31
7.7 Takt Time....................................................................................................................................................................................................... 31
7.8 Lead Time.....................................................................................................................................................................................................32
7.9 Standard Time............................................................................................................................................................................................32
7.10 Time Metrics.............................................................................................................................................................................................32
7.11 Process Metrics........................................................................................................................................................................................33
7.12 Symbols in the VSM..............................................................................................................................................................................33
7.13 5S....................................................................................................................................................................................................................34
7.14 Heijunka.......................................................................................................................................................................................................35
7.15 Improvement Plan.................................................................................................................................................................................35

8. Performance 36
8.1 Defining Performance ..........................................................................................................................................................................36
8.2 Performance Indicators....................................................................................................................................................................... 37
8.3 Defining a KPI............................................................................................................................................................................................39
8.4 Time Usage.................................................................................................................................................................................................40
8.5 Skills and Knowledge............................................................................................................................................................................ 41

9. Organization 44
9.1 Organizing Lean IT ..................................................................................................................................................................................44
9.2 Communication Cascade.....................................................................................................................................................................45
9.3 Objectives, Feedback and Performance dialogue.................................................................................................................46
9.4 Visual Management................................................................................................................................................................................47
9.5 Making work visual.................................................................................................................................................................................48
9.6 Day or Kanban Board............................................................................................................................................................................48
9.7 Kanban..........................................................................................................................................................................................................50
9.8 Week board................................................................................................................................................................................................50
9.9 Improvement (or Kaizen) board ..................................................................................................................................................... 51

10. Behavior and Attitude 53

10.1 Lean Mindset............................................................................................................................................................................................53
10.2 Lean Transformation...........................................................................................................................................................................54
10.3 Lean Leadership.....................................................................................................................................................................................56
10.4 Jidoka..........................................................................................................................................................................................................57

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11. Kaizen 59
11.1 Continuous Improvement...................................................................................................................................................................59
11.2 Kaizen Event.............................................................................................................................................................................................60
11.3 Selecting a subject for a Kaizen event........................................................................................................................................60
11.4 Roles in a Kaizen Event....................................................................................................................................................................... 61
11.5 Running a Kaizen Event...................................................................................................................................................................... 61
11.6 A3...................................................................................................................................................................................................................62
11.7 Define............................................................................................................................................................................................................63
11.8 Measure......................................................................................................................................................................................................63
11.9 Analyze........................................................................................................................................................................................................64
11.10 Improve.....................................................................................................................................................................................................65
11.11 Control .......................................................................................................................................................................................................66
11.12 Kaizen Tools.............................................................................................................................................................................................67
11.13 Kaizen Pitfalls.........................................................................................................................................................................................67

Literature 69

Glossary 70

Authors 79
Niels Loader.......................................................................................................................................................................................................79
Jeroen Janssen.................................................................................................................................................................................................79
www.leanitassociation.com.......................................................................................................................................................................79

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Scope and Purpose
The purpose of this document is support the Lean IT Foundation qualification. The exam questions
can all be answered based on information in this document.

Target audience

The target audience of this document is:

•• Candidates for the Lean IT Foundation Exam

•• Accredited Training Organizations

Copyright Notes

ITIL® is a registered trade mark of AXELOS Limited.

Acknowledgements

The authors would like to thank the people who have put their time and effort into creating this and
earlier versions of this document.

Special thanks go out to the following people whose critical reviews have improved both content and
readability of the content:

•• Troy DuMoulin, Pink Elephant

•• Frederik Schukken, Quint Wellington Redwood
•• Eline Zweers, Quint Wellington Redwood
•• Rita Pilon, EXIN
•• Arjan Woertman, ITpreneurs
•• Tammy Butler, Pink Elephant

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Foreword
When writing Lean IT – Enabling and Sustaining Your Lean Transformation back in 2010, I dreamed
that perhaps someday, there would be a professional certification recognizing proficiency in the
practical application of Lean IT. I am thrilled that the Lean IT Association (LITA) was formed to
make that dream a reality, and to promote awareness, understanding, and practice of Lean IT. The
organization’s mission is to contribute towards a clear understanding of the value and positioning of
Lean IT relative to other bodies of knowledge ..

Lean IT represents what I believe is the most impactful application of Lean thinking, methods, and
tools for any organization because of our interdependence on information, communication, and
technology. Lean IT is the fulcrum with which we can accelerate Lean transformation across the
enterprise, because the quality and timeliness of products and services we produce is a direct
reflection of the quality and capability of our people, information, and technology. Transformations
build upon the value that we provide customers and reflect the abilities of our people to skillfully
exploit capable processes and quality information enabled by great technology.

The Lean IT Foundation Certification is a significant step toward identifying standard work of the
core terminology, methods, capabilities, processes, and tools of Lean as they specifically apply to
Information and Technology. In the pages that follow, a wide-ranging discussion of the core ideas of
Lean IT is succinctly presented.

My hope is that your pursuit of Lean IT training and certification is not your final destination, but
inspires the continuation of a lifetime of learning, experimentation, and discovery.

Best Wishes Towards Your Pursuit of Lean IT and Enterprise Excellence,

Mike Orzen
Oregon City, Oregon, USA

Oct 2, 2015

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1. Introduction
In compiling the Lean IT Foundation publication, The Lean IT Association defines Lean IT as:
our goal was to provide a broad and practical
basis for people wishing to gain knowledge “Lean IT is the extension of lean manufacturing
about Lean, and how it can be applied to and lean services principles to the development
IT. This publication provides the content on and management of information technology
which the Lean IT Foundation exam is based. products and services. Its goal is to continuously
It also serves as a reference guide to ensure improve the value delivered by IT organizations
the knowledge required for this certification to their customers and the professionalism of
is accessible to all who wish to acquire it. At people working in IT”
the end of this document, we also provide
Lean IT focuses on improving people working
references to other publications for further
within IT, IT processes and information
reading, and understanding of Lean IT.
technology in order to deliver more value to its
The call for applying Lean principles to IT customers.
organizations had been growing since the
early 1990’s and, after decades of application
and development of the Lean philosophy
within production industries, the principles
were transferred to service organizations. The
key driver behind this development was the
continued inability of IT to deliver the required
value to its customers. Despite the industry’s
IT-initiated attempts at improvement through
maturity or process models, IT has continued to
underperform in the eyes of its customers.

The problem is that year-over-year, these same

customers have become more dependent on
their IT departments and the services they
provide. As a result, in organizations where
Lean principles have been applied to the
primary business, it was thought Lean must
also be able work within IT department.. As
you will see, the thought is correct but the
application of Lean to IT has specific challenges.
Altogether, Lean principles are readily
adaptable within IT, however the first issue we
found was there is no clear definition of what
Lean IT is.

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2. Lean
Lean traces its roots back to people’s and sending an invoice to the customer.
desire to create products. It consists of Their ideas became known as the Toyota
continuously evolving concepts and deeper Production System (TPS). This system shifted
thinking on business performance. Since the focus of the manufacturing engineer from
Lean principles are applied in many contexts, individual machines and their utilization, to the
tools and methods have multiple sources. flow of the product through the total process,
However, many of the iconic elements of which was strongly tied to customer demand.
Lean come from the Toyota Production Toyota soon discovered that factory workers
System. had far more to contribute than just muscle
power.
2.1 History
The Toyota Production System was based on
Lean history starts at a time when most two basic principles: Just-in-time production
production was a matter of craftsmanship. and Jidoka. As Toyota improved, TPS became
Towards the end of the 19 th century, part of the encompassing "The Toyota Way",
Frederick Taylor investigated workplace that was published in 2001. Today, the Jidoka
efficiencies. His ideas included dividing and Just-in-Time principles remain, however
work and specifying tasks to be performed the Toyota Way philosophy within which
for workers, training workers so they they now reside has included two higher
could perform these tasks, and installing principles: Respect for People and Continual
supervisors to ensure that tasks were Improvement.
performed as specified. A supporter of Taylor,
J. Edwards Deming is regarded as having a
Henry Ford introduced interchangeable parts
huge impact upon Japanese manufacturing and
with standard work and moving conveyance
business. He showed that organizations could
to create what he called flow production. This
increase quality and reduce costs by reducing
type of production thrived on the division of
waste, rework, staff attrition and litigation
labor and specification of tasks.
while increasing customer loyalty. The key was
As the people at Toyota looked at this to practice continual improvement and think of
situation in the 1930s, and more intensely just manufacturing as a system, not as a series of
after World War II, it occurred to them that parts to be optimized.
a series of innovations might make it more
Although Deming is credited with the Plan-
possible to provide both continuity in process
Do-Check-Act (PDCA), he always referred
flow and a wide variety in product offerings.
to it as the Shewhart cycle. The PDCA has a
It was vital for Toyota to catch up with the
built-in improvement cycle; an iterative four-
rest of the world, particularly America. Due
step management method used in business
to scarcity in a general sense, Toyota focused
for the control and continuous improvement of
on minimizing the amount of raw materials
processes and products.
required to produce cars and on minimizing
the time between purchasing raw materials

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The Deming (or Shewhart) cycle is an integral Six Sigma, for example the problem-solving
part of the Lean philosophy and embodies the cycle DMAIC.
goal for continual improvement:
Lean has continued to develop into a concept
•• Plan: Design or revise business process
in its own right even though it is still largely
components to improve results
associated with manufacturing. Although
•• Do: Implement the plan and measure its
originally developed in the manufacturing
performance
industry, the concept has proven itself relevant
•• Check: Assess the measurements and report and applicable in other businesses, industries
the results to decision makers
and functional roles such as Finance, Human
•• Act: Decide on changes needed to improve Resources or Insurance, Banking, Healthcare
the process and IT Technology.

The Deming cycle creates a feedback loop for

management to ensure that improvements are 2.3 Scarcity
identified and implemented.
Lean thrives in environments with scarcity
of resources such as time, money, talent or
2.2 Six Sigma and the relationship with Lean
materials. Toyota’s pioneering ideas come from
a time where they could not afford to produce
Originating at Motorola in the 1980’s,
inventory simply because there wasn’t enough
Six Sigma today is widely adopted in
material, which, among other things, led to
many industries and sectors.. Six Sigma
the continuous focus of reducing set up times
is a disciplined, data-driven approach for
for their machinery. A scarcity of resources is
eliminating variability, defects and waste
a reason for the development of Lean and a
that undermines customer value and loyalty.
reason to apply Lean principles and use Lean
Six Sigma improvement projects help to
tools.
increase performance and decrease process
variation, leading to defect reduction and vast
The key perceived scarce resource within
improvements in profits, employee morale and
IT is time. Since IT is ‘knowledge work’, the
the quality of a product.
productivity of knowledge workers becomes
critical to understand. And time is an
One of the methodologies, inspired by the
important factor in calculating productivity.
PDCA cycle is DMAIC (Define, Measure,
In IT, it seems we “are too busy with solving
Analyze, Improve and Control ) . Six Sigma
incidents to document properly”, “have no
is often mentioned in combination with the
time to complete changes and projects
Lean methodology. The two concepts have a
properly”, “have no time to improve” or we
large overlap; however there are differences
“have to test less to meet the delivery date”.
in the approach on various aspects. Six Sigma
Scarcity of time is an important factor that
is the disciplined, data-driven approach
drives opportunities for improvement. Lean
for eliminating variation. Lean IT primarily
helps to make the best of scarce resources,
focuses on establishing flow of value,
also within IT.
particularly in conjunction with the behavior
and attitude of the people involved. However,
Lean IT also makes use of some elements of

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2.4 Aspects of Lean shorter and their efficiency of development
and deployment keeps increasing. The most
Lean is, in essence, a way of thinking and important asset for a ‘knowledge worker’
behaving. It revolves around the following key organization is its people. Lean promises higher
concepts: involvement and motivation of employees.
•• Improving customer value
Thirdly, there is Financial Value to be expected
•• Continual improvement in small steps from reducing process waste, optimizing value-
•• Decreasing peaks and troughs in production adding work that frees up time to add even more
•• Reducing waste value. Also, the reduction of the duration between
order intake and delivery will improve cash flow. It
•• Involving everybody
must be stressed, however, that increasing profit
•• Developing people
margins is not the primary goal of Lean, although
•• Focusing on long-term goals it can be expected to be a secondary effect of
improving and thereby reducing effort spent on
Once companies start transforming themselves
non-value adding activities.
with Lean principles, concepts and techniques,
they need to involve people across the
In addition to these reasons for being Lean,
company and address desired behavior.
current business performance may also offer
a compelling reason for an organization to
An effective Lean Transformation consists of
embrace Lean thinking.
aligning attitudes towards the work we do and
desired behavior, supported by Lean tools.
Poor Quality can also be a driver for the adoption
of Lean. Poor quality has its effects both within
2.5 Being Lean and outside the organization. Aspects such as
reputation damage and loss of customer trust
There are a variety of reasons for organizations may cause the organization to incur large costs or
to be Lean. They revolve around three major penalties. Also, waste of talent or an unexpected
categories: Customer Satisfaction, Strategic number of defects causes stress within the
Value and Financial Value. organization. Again costs will increase due to
inspections, rework or demotivation.
First, Lean helps to focus on Customer Value.
By doing so, organizations add more value to
2.6 Paradigm Shift
their products and services while reducing
sources of waste and increasing their agility
A outcome of applying Lean principles is
and ability to adapt. An improved dialogue
a paradigm shift in the way we think. It
and connection with customers and end-
challenges our assumptions of how work is
users enables an IT organization to drastically
supposed to be done and how responsibilities
increase the loyalty of satisfied customers.
are supposed to be executed.

Secondly, the Lean organization continuously

A traditional paradigm is that knowledge
improves process performance which offers
is power. An organization may find itself
them great Strategic Value. Their services
depending on a few critical resources that
are of better quality, their delivery times are

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have the knowledge of how processes operate. to deliver value to the customer as quickly as
Lean organizations understand that it is possible.
more powerful to work on the continuous
involvement of all employees and to maximize Another aspect of the paradigm shift is how
the transparency of information by use of, for people regard defects or mistakes and how to
example, visual management techniques. deal with problems. In traditional organizations,
the focus is on avoiding problems, even
In a traditional context, management decides though they occur. Problems are seen as ‘not
what needs to be done and how to operate, good’. At the same time, there is acceptance
while workers just need to follow orders. of a certain, undefined, rate of defects. Lean
This division of labor and specification of organizations welcome problems and learn
tasks originates from the interpretation of from mistakes. They make it a collaborative
the studies of Taylor. In Lean organizations, exercise and share what they have learned
managers facilitate the workers at the across the organization. It is up to management
shop floor level. They lead as a coach and to ensure that the mistakes are embraced and
teacher, and allow their teams take on the used to continually improve the capabilities of
responsibility to figure out how processes the people and the organization as a whole.
are best optimized to deliver results for the This openness to seeing, accepting and solving
customer. problems is strongly related to an on-going
pursuit of perfection.
In order to effectively facilitate a team,
managers need to have a presence on the shop
2.7 Lean IT and IT Frameworks
floor, the place where the work is done. This
kind of managerial behavior is in sharp contrast Since the advent of the IT organization, there
with the more traditional style of management, have been many efforts to standardize and
where managers are found in their offices or ensure that high-quality services are delivered.
in meetings mainly with other managers. This Frameworks and standards, particularly in
causes them to lose touch with what is actually the area of IT Service Management, aim to
happening on the shop floor. ensure quality. Most frameworks have some
element of continuous improvement however
Traditional organizations aim to maximize the
their focus is on how or what to do rather
utilization of resources. In the case of IT, this
than methods and approaches to improve and
means ensuring that ‘expensive’ people like
to ensure long-term relevance and evolution.
programmers must be given as much work as
In summary, these frameworks present
possible so that no time is “wasted”. This kind of
the principles and the need for continual
thinking derives from the scarcity and cost of
improvement but fall short in delivering the
resources, so we should make the best use of
practical methods and tools to achieve it.
them. However, it often leads to inefficiencies
because people produce more than is actually To understand the difference and
needed, and filling up people with work reduces complementary nature of Lean principles in
their flexibility. Lean organizations focus first on relationship to process frameworks, one needs
maximizing the efficiency of flow, i.e. ensuring to understand the difference between a
that work is moved through the process so as quality system and a process framework.

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A Quality System drives improvement based Lean IT is an improvement approach uniquely
on the understanding that to improve anything focused on pursuing the delivering of value to
the following logic tree must be understood customers with the least amount of effort. Or,
and executed: in other words, Lean IT while similar in nature
to other quality systems balances both the
•• What is not “Defined” cannot be stabilized or
controlled (Lean Standard Work) concept of effectiveness with efficiency with a
goal to establish a “Fit For Purpose” approach
•• What is not “Controlled” cannot be measured
to continuous improvement. This gives the
effectively
people involved the feeling they are making
•• What is not “Measured” cannot be improved.
steps towards delivering more value in the
From this perspective, different quality most efficient way possible. In this quest for
systems all begin and end with the same goal improvement, the best practice frameworks and
of establishing a rhythm and cycle of continual standards can serve to feed the long-term vision.
improvement. There are many different Quality
The second benefit of combining Lean IT
Systems available such as the PDCA cycle,
with an IT best practice framework is that
Total Quality Management, or Lean and Six
Lean IT brings a strong focus on behavior
Sigma. Each of these quality system has similar
and attitude within IT environments. Lean
characteristics. However, they are dependent
IT is applied on the entire IT domain, from
on Process Frameworks to provide a reference
requirements to maintenance. Applying Lean
model for what and how an IT Management
IT involves the entire management and all the
process is best defined or measured.
employees. Attitude and behavior elements
It is important to note the various quality of change are often not explicitly covered in
systems and process frameworks are co- these frameworks, and if they are the tools to
dependent and complementary. Without the improve are not provided. This, consequently,
application of a Quality System, a process makes the combination of Lean IT and IT best
framework is at risk of not being applied with practices very powerful.
the controls necessary to sustain and keep
Lean tools are used to optimize processes
it relevant. Likewise without the use of an IT
and reduce waste. The IT best practices guide
management framework, the Quality System is
us on how the process should be structured.
less effective due to the lack of external best
Frameworks, models, standards and quality
practice reference models which support the
systems offer guidelines for demonstrating
goal of establishing best and common practices.
compliance, good practices, a common
IT best practice frameworks deliver content language and measurements for improvement.
on how topics like architecture, service But, as Taiichi Ohno, considered to be the father
management or security should be approached. of the Toyota Production System, said…“If you
They present an ideal end-state picture of the think of the standard as the best you can do,
way the world of IT should look and operate. it’s all over. The standard is only a baseline for
Unfortunately, most IT organizations struggle doing further Kaizen.”
to achieve this end-state, leaving them with a
feeling that they are not making progress.

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IT Service Management is constructed around As with Agile, DevOps is also about the
the need for standardized IT processes. application of Lean principles to the delivery of
However, from a Lean perspective not all of the IT products and services. In fact, one could go
processes are actually value streams, a Lean so far as to say that DevOps is actually all about
principle we will discuss in the next chapter. achieving the flow of value to customers of IT.
By using Lean IT, we can focus on the right Every possible method for achieving flow is
processes to deliver the maximum value to used within DevOps. We reorganize, combining
customers. previously separate departments, to improve
flow. We optimize and automate the processes,
Even though Lean IT practices evolved to improve flow. We focus behavior and mindset
independently, IT Service Management is on achieving flow. In fact, every choice made in a
highly supportive of them as there are many DevOps environment is about delivering value as
shared objectives. IT Service Management quickly as possible to a customer.
best practices may serve as a ‘future state’ for
process improvement while Lean IT keeps the Clearly, the developments of the past decade
IT processes fresh and continually relevant. have been focused, intentionally or not, on
integrating Lean principles into the fabric of the
The Lean IT objective is to continuously improve IT industry.
the delivery of value to the customer. For this,
we apply Lean principles and techniques to
2.9 Lean Community
the work of IT. This means continually taking
small steps in the right direction rather than Hundreds of books and thousands of articles
attempting to implement an entire ideal have been published on Lean IT related
situation. topics over the last decade. An abundance of
associations, consultancy firms, and educational
organizations are also well established in the
2.8 Lean IT, Agile and DevOps
world of Lean. Many of them provide websites
The last ten years has seen an explosion of filled with insights, tools, discussion platforms,
interest in methods such as Agile and DevOps. training propositions and certifications. There
These methods are strongly related to the Lean is an increasing number of communities coming
principles. Agile has its roots in the application together on a regular basis to discuss Lean
of Lean principles to the area of Software topics and new insights in the application of
Development. We see that a focus on customer principles and tools, most often referred to as
value (‘working software’) is at the heart of Lean Summits.
Agile. As with Lean, Agile aims to ensure that
the processes (‘value streams’) work in such a In the world of Lean, the Shingo Institute with
way that software is delivered quickly (‘flow’) its Shingo Model is one of the foremost Lean
and that teams deliver the software that is standards. The world of Lean is also constantly
required at that moment (‘pull’). There is also a evolving, but here to stay and still growing in
clear continuous improvement mindset within popularity. Since all work is a process, and all
Agile, based on the delivery and improvement value is delivered as a result of a process, the
of a ‘minimum viable product’ that delivers the application of Lean is relevant to all industries
value that customers are seeking. and businesses.

13
Lean IT was brought to prominence by the
2011 Lean IT book written by Steven Bell and
Michael Orzen. This came after a number of
years of growing interest in using Lean within
IT, and many practitioners applying Lean
principles within IT organizations.

14
3. Key Principles of Lean
As covered earlier, the Lean framework
originates from the manufacturing industry;
the Toyota Production System (TPS) , a system
of delivering high quality products that meet
customers’ requirements. The three basic
elements of TPS are Just-In-Time production,
focus on Quality and Continual Improvement.
The essence of Lean is delivering value to
customers and continuously improving the
ability to do this, by removing waste from the
entire system that produces the value. In the
landmark publication on the philosophy of Lean,
Lean Thinking (Womack and Jones, 1996), the
author provides details on the key principles of
Figure 1. Lean Principles as defined by Womack and Jones
Lean:

Value is defined by the customer (“Voice of the In order for a value stream to deliver value,
Customer”) and represents the requirements it must have Flow. This means that the
that a customer has regarding a specific activities must follow each other with minimal
product or service delivered. We can consider interruptions and minimal intermediate
the value of a product or service as its ability stockpiles. This means designing the flow so
to help the user of the product or service to each unit that enters the flow is carried out to
deliver value to his or her customers. We, its conclusion without interruption. Flow means
therefore, need to continuously focus on the working with a so-called ‘single-piece flow’, (i.e.
value for the customer and the value they each unit of work goes through the process
perceive from a product or service. If that value on its own). This is the opposite of working
is insufficient, customers will seek out another in batches where multiple units of work are
organization to provide it. processed through a particular step together.

Value is delivered through a Value Stream. Flow is interrupted mostly by the following
This is an end-to-end process triggered by types of waste: Handoffs, inspections, and
the customer that ensures the delivery of the waiting times. Work In Progress (WIP) is
required value is received as quickly as possible. an obstacle to achieving flow, generated
A value stream is comprised of by differences in work tempo. A surplus of
inventory can result from a work tempo
all tasks and activities used to bring a product that is faster than customer demand. Flow is
or service from concept to customer, and about getting the right materials and the right
includes all information, work and material information to the right people, with the right
flows. skills, in the right place, at the right time, every
time, in short: Just In Time. One word of caution:
Even if a process has flow, it is vital to manage

15
the demand to ensure that the work can be that the waste that often masks much of the
carried out, as a change in customer demand customer value is removed. Therefore,, the
can alter the current flow in the process. value to customers is increased in two ways: By
reducing the proportion of wasteful activities
It is also vital to understand that the customer to value-adding activities and increasing the
can trigger the value stream when the value amount of value-related activities.
is required. This is the essence of Pull. A Pull
Production System is one that explicitly limits the Waste within IT includes the traditional
amount of work in process that can be introduced categories: Transportation, Inventory, Motion,
into the system. Nothing is to be produced until Waiting Time, Over-processing, Over-production
the next process really requires it. For service and Defects & Rework (TIMWOOD). There is
industries like IT, this is less problematic than for an important additional type of waste in IT:
production industries, since a service is consumed Talent. This is when the skills and abilities of the
as it is produced and is generally started when resources in the IT organization are lacking or
requested by the customer. not used to their full extent.

•• Transportation: Movement of work product,

Last but not least, Lean aims for Perfection.
information, materials
This does not mean that multiple quality
•• Inventory: Work in progress, having more
controls need to be in place, causing delays.
than strategic levels of products
It means that each resource in the value
stream must know his/her task and the •• Motion: Unnecessary physical movement
associated quality requirements. The essence •• Waiting: Stopping or slowing down for work
of perfection is doing things right the first to arrive
time. This aspect also ensures that there is a •• Overproduction: Producing more or sooner
focus on continuously improving the ability to than is needed
deliver value. Transparency supports the goal •• Over Processing: Excessive or unnecessary
for perfection because transparency ensures work
useful feedbackis obtained to understand •• Defects: Reworking to correct mistakes,
where delivery does not meet expectations. We inspection and scrap
need to create an environment where learning
•• Talent: Unused human creativity and
from mistakes can become a powerful element potential
of continuous improvement and initiatives are
not discarded immediately. There is no end to In addition to traditional definitions of waste (or
the process of reducing effort, time, space, cost Muda), there are two other categories of waste:
and mistakes to offer a product that is aligned Variability (Mura) and Overburden (Muri).
with what the customer wants and values.
Mura (variability) occurs when incoming work
is not matched by the right number of people
3.1 Waste
with the appropriate skills, thus leading to a
As Lean can be applied to other areas in an wide range of possible outcomes in quality.
organization, Lean IT is not only concerned Variability is about fluctuation, in cost, quality
with delivering as much value as possible or throughput times. Variability is directly
for customers, it is also focused on ensuring related to the fact that customer demand can

16
vary significantly and unpredictably, e.g. an IT The next step is to understand the Value
organization can rarely predict when and how Stream that creates the value. Based on this
many units of work (e.g. incidents, changes, knowledge, improvements can be made to the
service requests) will be received. Value Stream through the identification and
removal of waste in the Value Stream. With
Muri (overburden) is caused by fixed service a clearly defined Value Stream, the aim is to
timeframes, release windows and other such create Flow in the process.
time constraints. The ability to scale a team
up or down to match workload also plays a Flow will be achieved as a result of removing
role in being flexible. Large inventories and a the waiting time and inventory waste between
batch processing system cause overburden and the steps in the Value Stream.
inflexibility, reducing the ability of processes to
have flow. Muri is largely policy-based waste. It Integrating Pull into the Value Stream is
is caused by constraints that the organization generally the next step, particularly in a
chooses to use, (eg. team composition manufacturing setting. This is, however,
or size, organizational structure and the different within IT. Being a service industry,
aforementioned release windows). much of IT’s ‘production’ is pull-based; IT does
not generally solve incidents before they
To remove waste from an IT organization, it happen, and mostly changes are carried out
is vital for management to initiate a review of based on a customer’s request. The fact that IT
Muri before tackling Mura, followed by Muda. is largely pull-based means that customers are
Attempting to remove, for example, an excess instantly confronted with any inefficiency in the
of changes (inventory waste) may be frustrated IT process.
by policy-based choices. The decision to have
a Change Advisory Board meeting once a The last of the principles is Perfection. This
week will tend to cause inventory waste and principle holds a special position in that it is not
waiting times. The fact that the IT Service the final step, rather something that must be
Management system is used as a place where applied to every action taken.
customer wishes are recorded without any
indication as to whether the wish will ever 3.3 Types of activities
be actually be pulled into the process by the
customer may also be considered waste. Customers put a demand for value on your
organization. In this way, they define three
3.2 Improving using the Principles types of activities:

•• Activities that add value from a customer

There are five key principles that can be used perspective (Value-Add Activities, VA),
as a guideline for driving improvements within
•• Activities that do not add value from a
an organization. The sequence always starts customer perspective (Non-Value Add
with Customer Value. This is the anchor for all Activities, NVA)
improvements; Customer Value is the starting
•• Activities that do not add value but need to
point for Lean thinking. Every improvement be done nevertheless, often according to an
must in some way be related to the creation of organization’s policy (Necessary Non-Value-
more value for customers. Add Activities, NNVA).

17
Necessary Non-Value Add activities are Examples of Non-Value Add activities are:
necessary steps or changes made to the •• Inventory: Managing large backlogs of
product for future or subsequent steps, for incidents.
compliance to policies, but which is not noticed •• Doing more than Required: Providing
by the final customer. functionality that is not necessary.
•• Rework: Bugs in software and subsequent
Our goal is to optimize value adding activities,
solving IT incidents.
minimize necessary non-value-add activities
and remove non-value adding activities. The •• Waiting: Delay between programming and
testing.
expenditure of resources for any goal other
than the creation of value is considered to be •• General Non-Value add: Sick leave.
wasteful. Value adding activity is any action or
Understanding the nature of a particular
process that a customer would be willing to pay
activity helps resources within IT to focus on
for, and is performed right the first time.
activities that add value to the customer. Lean
aims to remove Non-Value-Adding activities.
Examples of Value-Add activities are: Necessary Non-Value-Add work must be
•• Application Development: delivers new optimized and reduced, where possible.
functionality for the customer
•• Operational Activities: ensure the service
keeps working
•• Delivery of a laptop: means a new employee
can start working
•• Advice: Providing understanding and insight
into the use of IT so that decisions can be
made

Examples of Necessary Non-Value Add

activities are:
•• Recruiting Staff: recruiting and selecting new
people ultimately helps the organization to
deliver value.
•• Finance & Accounting: these activities mean
we can finance the delivery of value to
customers.
•• Application Testing: ensuring that the
product works before it is delivered to the
customer.
•• Conducting Problem and Root Cause
Analysis to resolve the root cause incidents
to avoid re-occurrence

18
4. Characteristics of Lean IT
Why has Lean been so successful in precisely where IT differs from manufacturing:
manufacturing industries? Manufacturing the most critical component is still the people
mainly deals with machines that create delivering the service. The software industry
products. Increasingly the human factor continues to make inroads into reducing the
is removed from the production equation; people effect, but people still make up a
robots, automated processes, machinery are substantial part of the where the IT service can
all aimed at removing the variability of humans fail.
and ensuring consistent quality. Machines
are designed for efficiency, i.e. they create Applying Lean to IT is thus a different
large amounts of products at a speed that proposition. It is about applying the Lean
humans cannot match. Unfortunately, in the approach to people, not machines. Aiming
process, they tend to produce more waste than for perfection means raising the level of
humans (who adapt quickly to re-use or reduce professionalism of the people involved.
waste). The machines are subsequently tuned This means improving their ability to solve
to ensure that they work better, producing problems, to deliver and provision services in
more products per hour or less waste per a predictable time frame and quality, to work
product. This is (in general) a rational, scientific autonomously and in a team, and to improve
process, which deals with tangible products their mastery of the subject matter. Aside of
that are produced in a predictable, structured skills training, this means taking on a new mind-
manner. It is also relatively easy to measure set focused on value, value streams, flow, pull
how the products are made. After many and perfection.
improvement iterations, the goal is to obtain
a 1% or 2% increase in improvement each
time. These characteristics explain why the Six
Sigma methodology has developed within the
manufacturing industry.

Compare this with an IT organization and we

find different challenges. First, an IT service
is an intangible entity. Even at the core of the
service, software is not something you can
pick up and look at. It is only by installing it and
using it that the value can be understood. To
a large extent, IT is unpredictable; we do not
know when it will fail; we do not know how it
needs to be improved. Within IT, we are also
not used to measuring the service as a whole.
We measure the performance of machines but
that is only part of the service. The “people”
part remains largely unmeasured. This is

19
5. Structuring Lean IT
The Lean principles have far-reaching is subsequently used to identify where there is
consequences for all organizations that wish to waste in the process.
integrate the principles into their daily work. In
order to make the analysis and improvement of To make a process flow it requires resources
an IT organization a more manageable prospect, of any kind, like time, money, people and
we have chosen to define dimensions which a their talents, and materials. Aligning these
variety of considerations and tools are positioned. resources around the process output requires
organization.. The Organization dimension
The dimensions of Lean IT are Customer, investigates the aspects needed to ensure that
Process, Performance, Organization and we can steer the resources. This includes Visual
Behavior & Attitude. Aligned with the Management techniques supplemented with
dimensions, we need a method for carrying out the Performance Dialogue. Also, we need to
continuous improvement or Kaizen. For this, we decide how to organize people for maximum
use the Define, Measure, Analyze, Improve and value delivery to customers. This means
Control (DMAIC) problem-solving method. understanding the effect of siloed organizations
versus organizing for customer-orientation.
5.1 Lean IT Dimensions
Performance is a key aspect of Lean. From
There is no business without a customer. The our understanding of the customer value and
purpose of any business is to find and keep process, we can determine the performance
customers. For any business improvement measures needed to understand, manage and
to be effective we therefore need to start by steer the performance of the organization.
looking at it from a customer point of view. The Key aspects are defining Key Performance
Customer dimension deals with all aspects of Indicators (KPIs) to understand at the very
understanding the customer and the value they least the output of processes, understanding
are seeking and includes tools such as Voice of and measuring the use of time within an
the Customer and Critical to Quality (CTQ). IT organization and, lastly, identifying the
availability and requirements for the skills and
Once we have found a customer, the IT knowledge of the workforce.
organization will need to perform a sequence
of activities that result in products and Behavior and Attitude has been found to be
services for which the customer is willing one of the most important success factors for
to pay for. Process looks at how value is Lean (and Lean IT) implementations. There are
delivered through Value Streams, integrating many tools available in the literature to help
the principles of flow, pull and perfection. Tools steer behavior. The first step is understanding
used are Supplier, Input, Process, Output the key characteristics of Lean behavior for
and Customer (SIPOC) and Value Stream everybody within the organization, in particular
Mapping (VSM) to ensure that a process is for those in leadership positions. Leaders must
correctly scoped (SIPOC) and detailed with the also understand how behavior and attitude
addition of quantitative data (VSM). The VSM may change during a transformation.

20
These five dimensions have ongoing importance 5.2 Continuous Improvement with Kaizen
in our improvement activities. The rest of this
publication is structured around these five Continuous improvement begins by clearly
dimensions. defining value in the eyes of customers, both
internal and external. Expectations must be
When discussing the Customer dimension we clearly and unambiguously communicated
will find answers to the questions: Who are our so that processes can be designed to meet
customers? What do they want? And how do customer need.
they value our IT services?
Continuous improvement focused on how the
When discussing the Process dimension we flow of value requires both scientific thinking
will answer: Which types of activities are and the capacity to identify and eliminate
considered to be of value and which are not? waste. The most essential precondition for
We will also identify opportunities to increase improvement is the pursuit of clear and agreed
the flow of value also by means of using a goals: make things better, faster, cheaper,
pull-mechanism in our processes. A powerful create more meaning in our work and leave a
technique to continuously improve the way we healthier environmental footprint.
work is called ‘value stream mapping’ which we
will also address in the process dimension. Kaizen forms the basis of incremental
continuous improvement in organizations and
Questions to be answered in the Organization contains an approach for solving problems.
dimension are: Is our organization shaped to Kai means change, Zen means for the better.
deliver maximum value? How do we ensure Kaizen is about continuously improving:
rapid communication across the board? How everyday, everyone, everywhere. Many small
do we create and discuss transparency of improvements implemented with Kaizen result
performance? in faster innovation and more competitive
advantage for the business with less risks.
In the Performance dimension we will discuss
what results we should measure and how to Problem-solving consists of five phases
influence them. To really increase performance starting with a problem statement towards
we need to answer the question how to obtain embedded improvement implementation.
the right capabilities and how to navigate, using These steps are: Define, Measure, Analyze,
key metrics. Improve and Control, also known as DMAIC.
This method originates from Six Sigma and has
Since people are the most important asset in proven to be suited to investigating and solving
the IT organization, their attitude towards work problems within IT organizations.
and how they behave is of key interest. For
•• In the Define step, we define the problem
this, we will answer what people’s mindsets
statement, describe the goal statements,
are and how to reshape them? We will discuss analyze the cost of poor quality, define
how we can collaborate more effectively and the scope with a SIPOC diagram, establish
how to transform our culture to create a high the Kaizen project team, create the project
performance, Lean thinking organization. charter and planning, get stakeholders’
support and start the project.

21
•• In the Measure step, we build understanding
of current KPIs and performance, develop
the Critical to Quality (CTQ) flow down, write
a data collection plan, we try to understand
process behavior and variation, and relate
current performance to the Voice of the
Customer.
•• In the Analyze step, we collect data and
verify the measurement system, study the
process with Value Stream Mapping, identify
the types of waste, develop hypotheses
about the root cause, analyze and identify
the data distribution and study correlation
•• In the Improve step, we generate potential
solutions by brain-storming, design
assessment criteria for impact and feasibility,
decide the improvement to implement,
implement or pilot the improvement and
measure the impact on the CTQs.
•• In the Control step, we implement ongoing
measurement, we anchor the change in the
organization, we quantify the improvement,
capture the learning, and replicate it across
the board. We write the project report and
close the actions for our project.

Our main objective is to improve the delivery

of value to the customer. For this we apply
Lean principles and techniques to the work
of IT. We use five dimensions to support the
effectiveness of our improvement activities.
We use the DMAIC steps in a disciplined way
to solve problems and learn from them. This
is how we implement and adapt Lean IT. This
is how we continuously improve business
performance.

22
6. Customer
6.1 Value

John Bicheno (2008) sums up the various definitions of value in his book The Lean Toolbox for Service
Systems from an economic definition of value to qualitative definitions. This shows how illusive the
concept of value can be. In order to make value more concrete and usable, it is useful to understand
what types of customer value there are. Value tends to be described by adjectives that indicate the
importance of particular attributes of a product or service. In some cases, these are measurable, and
even if they are measurable, the customer takes a relative view of what the suitable level is in order
to perceive value.

As an example, let us look at the value requirement “cheap”. This word alone begs a whole host of
questions: What is the product or service? What does the product or service mean to the customer?
Does it help the customer to generate more business? What is the market price for similar products
or services? What is the customer’s perception of cheap’? And so on.

In the previous example, “cheap” could be replaced by any number of characteristics for products
and services. Examples for products are performance, timeliness, reliability, serviceability, durability
and aesthetics. These come on top of the requirement for specific features. Similarly for services, a
customer might define the following types of value: Competence, accuracy, responsiveness, access,
communication and credibility. Some of the types of value of services and products may be the same
but there are also differences. The key message is that understanding and defining the value required
by the customer is not as easy as it may seem, especially when it comes to working out exactly what
the customer is looking for when they say (for example): “it’s got to be responsive”. Below is a table
containing examples of values that customers attribute to products and services.

Figure 2: Examples of customer attributes of products and services

23
The customer may define any number of accessed a website and committed to the
characteristics for the product or service. insurance through web-based application
It is up to the organization delivering the without the intervention of an employee of the
value to determine, through interaction with insurance company. In this case, the person
the customer, which of the characteristics buying the insurance is the customer. In the
are requirements, i.e. the customer will not case of our example, we have two distinct
buy the product or service without these customers for essentially the same service: the
characteristics, and which are wishes, the employee and the insurance buyer, since they
characteristics that have the potential to delight both use the service.
the customer. The aim is to create a product
or service that meets the expectations of the In Lean, it is only the customer who can define
customer. The goal is this will lead to a higher the value. But always remember, appreciation
customer satisfaction with the products and is subjective per customer and consists of
services delivered by the IT organization. collection of requirements and wishes. These
requirements and wishes change over time
with new insights and expectations.
6.2 The Customer

Let us take a look at the generic value provided

We have referred and focused on the customer
by IT. We have seen that there are two groups
at length within this document, but who is the
of customers: employees and people who
customer?
buy the organization’s products and services
In a generic sense, we can identify two types of through web-based services. Focusing on the
customers: employees, we see that they want three basic
pieces of value:
•• The customer who uses the product or
service 1. Ensure that any existing service I use work
•• The person next-in-line in the process. and when it stops working, please restore
it as quickly as possible
The second type of customer is relatively
2. I regularly need new functionality to match
easy to identify since we generally know who
the way my business is evolving, please
receives work from whom. The first type of
give me new functionality as quickly as
customer can be quite confusing. In the case possible so that I can meet the needs of
of IT, who is the customer? Is it a person who MY customers
uses the IT service or the person who buys a
product or service from the organization that 3. Assuming that everything else is going well
enough, I may require advice about how I
IT is serving? Both of these may be within or
can use IT to improve my business
outside of your own organization.
These are the three generic pieces of value IT
For example, the employee of an insurance must deliver, at reasonable cost.
company uses an IT service in order to record
a sales order and start an insurance policy for Customers who buy through web-based
a customer. In this case, the employee can services have needs that particularly focus on
be seen as a customer of IT. It is also possible the first two pieces of value. Their needs may
that the person buying the insurance policy however diverge from those of the employee in

24
the area of ease of use or level of functionality, experience, in relation to the value that the
as a result of a lower level of sophistication customer expects to receive.
with the product or service they are buying.
Let us briefly look at a classic IT situation.
Customers indicate that the delivery time of
6.3 Critical to Quality
changes needs to be shorter.
Customer value is made up of requirements and
From discussions with the customer, it has
wishes. A requirement is a specific property that
become clear that there are two important
the product must have; otherwise the customer
drivers for achieving this requirement: reliability
will not buy it. A wish is a property that excites
and timeliness. It is important to clearly define
the customer if the product has this property.
what is meant by these two terms. Reliability
Together, the requirements and wishes could be explained as the ability to deliver on
represent the Voice of the Customer (VoC). time. In this case, it concerns the reliability of
From the VoC, the organization delivering the software, that it is as “bug-free” as much as
the value must distil and prioritize the possible.
requirements and wishes that are most
The attributes show the most important
important for the customer, the aspects that
measures that can be used to determine
are Critical-to-Quality (CTQ). Having defined
whether the IT organization is meeting its goal.
the CTQs, the organization must define
their key internal attributes. The attributes
In terms of timeliness, we see that there are two
must be measureable. In this way, customer
key attributes: the availability of development
expectations are translated into measurable
capacity and the fact that the development
internal objectives and activities. The CTQs and
process always takes 20 weeks (due to release
Attributes related to the Voice of the Customer
arrangements). The reliability depends on
are referred to as the CTQ Tree.
the number of defects. These attributes are
generally process performance indicators (or
metrics), where the Voice of the Customer tends
to be related to economic indicators.

The first question we need to ask is: Are we

meeting the requirement from the Voice of the
Customer?

• If we are, then we need to investigate

the Voice of the Customer further to see
whether there are other requirements or
wishes that are not being fulfilled.
Figure 3: Steps for carrying out a Critical to Quality analysis
• If we are not meeting the requirement, then
we have a problem that needs to be solved.
The objective of investigating and
understanding the Voice of the Customer • If we are not sure, then we must measure
the attributes and ask the customer whether
and using the CTQ structure is to examine
the performance is good enough.
and understand the end-to-end customer

25
A final step in getting the CTQ to provide 6.5 Voices
insights is to link the Voice of the Customer
requirements to a strategic goal. In this way, The Voice of the Customer represents the
operational improvements within IT can be requirements and wishes, both spoken and
directly associated with a clear business unspoken, of the IT organization’s customers,
benefit. whether internal or external. It is all about
understanding where we are and are not
6.4 Investigating VoC meeting the requirements of our customers. As
such, it is a source of (continuous) improvement
Before we wrap up this section, we need to initiatives.
look at how we can investigate the Voice of the
Customer. There are three other sources of improvement
initiatives:
First, we need to look at which customers we •• Voice of the Business: Identifies
have. As we stated earlier, an IT service may improvements to help the organization
have two different customers: an internal achieve its goals and objectives
employee and an external customer depending •• Voice of the Process: Identifies
on how the service has been deployed. improvements based on the performance of
Segmentation of customers is therefore processes
important because each segment may have •• Voice of the Regulator: Identifies
different needs and spending capability (e.g. improvements based on changing legal
high-intensity users, users who use their IT requirements.
services infrequently, specialist users)

Second, there are a number of ways to

collect information regarding the Voice of the
Customer:

•• Observation, when the customers use

your product or service at their location
or the point where they interact with your
company. See what it is like to be a customer
(user) of your product or service
•• Interviews, using e.g. focus groups, face to
face or telephone interviews. Get feedback,
identify product requirements or get
feedback on existing products
•• Surveys, collect qualitative and quantitative
data from a larger sample of the customer
base
•• Social media, i.e. Twitter, Facebook, LinkedIn
and many other social media representing
specific user groups give brutally honest
feedback about how the organization is doing

26
7. Process
Value Streams are the ‘vehicle’ for delivering This underscores the importance of Value
value to customers. A Value Stream consists of Streams, or processes, in the world of Lean. IT
steps that add value to the unit of work being has been concerned with processes since the
processed. Each of these steps is executed in a advent of ITIL® in the 1980’s. As we saw in the
certain way. Lean aims to continuously improve Introduction, Lean IT takes a different approach
the way each of the steps is carried out, both to processes than the standard IT process
individually and particularly as a chain of steps frameworks.
to be optimized. When work is not carried out
correctly, or when the required value is not Within Lean, processes are vital. They are the
delivered, the first place we look to find the vehicles we use to deliver value to customers.
cause is in the value stream. The assumption For this reason, we refer to processes as Value
is that the way the process was designed or Streams. The concepts are synonyms, only the
carried out is the cause of the issue, and often use of the word Value indicates clearly what
is, especially in service industries like IT. The the intent is of the process. A Value Stream is a
beauty of investigating the process is that it chain of specific and identifiable actions that lead
is the central entity that will almost inevitably to the creation of a product or service that has
lead us to the cause, even if we find that the value for the recipient of the product or service.
design or execution of process is not at fault.
The actions must be performed correctly in
At any given moment in time, there is a best the right sequence at the correct time for value
practice way to carry out the step or process to be created and delivered. The actions must
as a whole. This process should be documented also be executed in succession so that delays
to ensure standardization which leads to a between steps are minimal. In this case, the
consistent level of quality of the output. The value stream has the characteristic of Flow, the
document describing this standardized way third Lean principle. Our aim is also to start the
of working is known as a Standard Operating value stream when a customer provides the
Procedure (SOP). In this way, Lean aims to trigger, also known as the fourth Lean principle
improve the value delivered to customers of Pull.
through standardization.
Lean challenges us to look at processes
Within IT, we have a number of Value Streams from customer triggers to deliver the value.
such as delivering new functionality or However, it is simply impractical to consider
ensuring that an IT service works. We also the entire chain of actions. We therefore need
resolve incidents. This activity is based on to be aware of the links between processes.
failure demand rather than value demand. We This is done by being aware of the output of
therefore refer to the process for resolving one process or action, which is then the input
incidents as a Failure Stream. of the next process or action. A key skill here is
to be able to define products or intermediate
As we saw in the Lean principles, Value Stream products rather than focus on the activities.
was the second principle after Customer Value. Experience has shown that within IT, people

27
tend to talk about what needs to be done, Resetting a password requires a different
rather than what needs to be created. set of actions than providing access to a new
application.
Before we dive into the details of Lean process •• Roles may include a “password re-setter” as
analysis, let us acquaint ourselves with the a role for a service desk agent, who has the
most important elements of a process. responsibility of ensuring that passwords are
reset as quickly as possible

7.1 Process •• Measures may include a measurement of how

many password resets are carried out per day
and what the average time is that customers
Fundamentally, a process consists of input that
have to wait for their password reset.
is transformed to output through a series of
actions. Input can be information, machinery, It is important to understand each of these
materials and labor or a combination of these aspects of a process to ensure that when we
inputs. Work is then done to create the desired aim to improve it, we do the right things. There
output, being a product, service or information. will be more about that when we look at the
tools for analyzing value streams.
The output is always created for a clearly
definable customer. If we cannot identify the
7.2 Basic processes
customer, it is questionable as to whether we
should carry out the process at all.
At an abstract level, each organization has
three processes: Design, Delivery and Support.
Every process has a goal and a predefined
result. In order to ensure the process works •• The Design Process takes an idea from
correctly, we need to have people taking care concept to the launch of a product or service
of the activities. These people have roles and •• This product or service must then be
responsibilities. One of the responsibilities is delivered to customers. The Delivery
to ensure the process works correctly. This is Process covers the activities from order
intake to the delivery of the product to the
done by having process measures and controls
customer
to check how units of work are progressing
through the process. •• During the lifecycle of the product or service
use by the customer, the Support Process
ensures that the customer continues to benefit
Let us quickly look at an example. Taking the IT
from the value of the product or service
process Request Fulfillment, we can define:

•• The Goal: To answer requests for service, IT organizations obviously also have three
not being the resolution of disruptions, from similar processes: Product & Service
customers regarding IT services Development, Production & Delivery and
•• The Result: Customers promptly receive the Service & Support:
service they require •• The Product and Service Development
•• The Input: A submitted request for service Process is concerned with the design of an IT
service
•• The Output is a fulfilled service request
•• The Production and Delivery Process is all
•• The Transformation will differ depending
about ensuring the IT service is created and
on the type of service request submitted.
deployed

28
•• The Service and Support Process is product or service through production. The
concerned with operating and supporting ultimate version of a pull system is Just-In-Time
the deployed IT service production in which inventory is brought into
the process at the moment that it is needed
It is important to understand these different
in a value-adding step. In reality, most pull
processes because within IT they can become
systems have small inventories to support
intertwined. If we look at the process of
the levelling of production. The ideal situation
delivering a change, often the production and
is that a single product is pulled through the
delivery actions follow the development steps
process as and when the customer needs
seamlessly, leading to a deployed service for
it. This is known as Single Piece Flow. In
which support may be required the moment it
this situation, there will be no bottlenecks
is in production. This is where understanding
since each step in the process is capable of
the links between processes is vital.
processing a single unit of work at a time.

7.3 Push and Pull We have covered the definitions and elements
of processes and value streams, the various
We already mentioned that value streams types of processes and the characteristics
should have the characteristic of pull, so what of value streams. The question now is: how
is the difference between a Push and a Pull can we analyze value streams? Within Lean
system? IT, we use Value Stream Mapping. This is an
instrument that consists of two tools: the
A Push System produces a product or service
SIPOC and the VSM.
before the customer has actually ordered the
product or service. The product is so-called
“pushed” through the process. The key effect
7.4 SIPOC
is that we produce to stock: Push processes
Achieving the improvement of a value stream
always have inventory. In general, this pertains
is done in two phases. In the first phase, we
mostly final product but also work-in-progress.
define the scope of the value stream we are
Push systems use a mechanism called Batch
aiming to improve. The second phase is all
and Queue. We produce a certain number of
about detailing the value stream with the goal
products in one go and then store them in
of implementing improvements.
stock until the next step in the process takes
place. Push production systems tend to work
Scoping a value stream starts with the
with forecast demand schedules rather than
elements we saw in the Customer module.
actual demand. This type of production always
Based on the Voice of the Customer and the
accentuates the bottlenecks in the system
related Critical to Quality tree, we can identify
since each process step produces at maximum
an area where the organization is not delivering
capacity. The process step with the lowest
the value required and the value stream most
capacity will become the step with the greatest
affected, and the stakeholders associated with
inventory preceding it.
this area.

A Pull System work differently. The value

In preparation for improving a value stream, we
stream starts when the customer places an
need to know who the customer is, what value
order. In effect, we let the customer pull the

29
they are currently receiving and what the CTQ will be different from one that starts with an
tree is associated to this particular customer authorized request especially if, in both cases,
value. We need to know what the customer the request needs to be authorized before it
thinks of its current performance. This is can be fulfilled.
important because the perception may be
good or even excellent, which would mean that Ensure all stakeholders directly related in
we can better spend our time on improving a the value stream are in some way involved
different value stream. in the Value Stream Mapping exercise. This
is a precondition to ensure support for
The next step is to define the boundaries of the implementing the suggested improvements
value stream. We do this with the SIPOC tool, later on. Assuming the team aiming to improve
which is a method for scoping a value stream the process has been able to identify the SIPOC
to be improved. Based on the input from key components, the process steps can then be
stakeholders, we assemble a team of people to described. Generally, the aim is to describe
investigate the value stream. the process in 3 to 5 high level steps. A guide
for defining the steps is to identify handover
Using the Supplier, Input, Process, Output moments; when does the process pass from
and Customer (SIPOC) tool, we can record the one role to another?
information related to this investigation. SIPOC
stands for Supplier, Input, Process, Output, The process of creating the SIPOC for the
Customer. SIPOC is a method for scoping problem you wish to solve may take a number
a value stream that needs to be improved. of iterations.
Assuming the CTQ and Voice of the Customer
require us to improve the value stream, we can 7.5 Value Stream Mapping
first identify the Output of the process and the
Customer who receives the output. Value Stream Mapping (VSM) is an exercise to
understand waste and improvement potential
We must then discuss the scope of the value in a value stream. We use it to visualize the
stream with stakeholders since process current and future states of a particular value
boundaries are not always obvious. What will stream. This visualization is used to facilitate
form part of the analysis, and what is explicitly the communication within the team improving
not part of the analysis, should be confirmed the value stream and the stakeholders, such
with the stakeholders. A good place to start is as other resources in the process or managers
to identify the goal and results of the process responsible for the process. The most
to be improved. Make sure this is clearly linked important output of the Value Stream Map is to
to the output of the process. determine which improvement actions need to
be implemented to achieve the desired future
Based on the process, output and the
state.
customer, we should be able to identify the
input and the supplier of the input. Each of the The aim of the VSM analysis is to understand
SIPOC entities may be adjusted as the value where the process fails to provide the value
stream is analyzed. For example, the request that the customer requires. Understanding
fulfillment process that starts with a request these issues, gives us input for continuously

30
improving the value stream and the value it We then show the future state of the value
provides. The Value stream map shows the stream and communicate with all stakeholders
input, the steps and the output of the value on which improvements will be made. The team
stream. It helps us to understand how the value will be able to differentiate between high and
stream currently operates. low impact improvements.

In the Value stream map, we calculate the These three steps are iterative, since the
waiting and cycle time of each step as well as future state becomes the current state as,
perform a Value/ Non Value Analysis on each particularly high impact, improvements are
step. In this way, we can identify where there embedded into the organization. As the
are issues of flow and waste in the process. effects of improvements become visible to the
This contributes to achieving flow. The Value customer, it becomes important to investigate
stream map clearly shows where inventory the Voice of the Customer and the CTQ to see
exists in process, and therefore helps to whether the organization is now meeting the
identify where we apply push or pull. The Value requirements and wishes of the customer.
stream map is instrumental in identifying waste
in the process and thus helps us to achieve The goal of Value Stream Mapping is to visualize
perfection. As such Value Stream Mapping a process in such a way that the process can
is an analytical exercise that supports the be analyzed. We build the Value Stream Map
achievement of all of the Lean principles. by taking the SIPOC and detailing the flow of
the process steps. We start by adding basic
information so that the Value Stream Map is
7.6 Developing a Value Stream Map
easily understood by anyone who wishes to
We know which process we need to improve review it. This means giving insight into the input
to meet the customer’s CTQ requirements and output of the process. The key activity is to
and wishes. We can now move to the second draw in the process steps. The SIPOC has given
phase where we improve the process. To do us a broad insight into the activities. In the VSM,
this, we will produce a Value Stream Map. This we need to be more specific. The key reason
is a detailed diagram of the process flow of the for being specific is that we will be trying to
current process where, we will record key data quantify as much of the process as possible. This
and identify where waste can be found in the means creating logical and measurable process
process. steps. Also, our ability to define clear steps
makes it easier to identify waste.
We start with creating the Value Stream Map
of the current way of working. Let the team Next, we need to be clear on what units of
reflect on their current processes. Stimulate work are being processed by this Value Stream.
them to identify bottlenecks and other It is important to understand where the work
impediments. The next step is to determine for this process comes from.
improvements together with the team. We
create an improvement plan with a maximum 7.7 Takt Time
timeframe of 3 months, during which selected
improvements will be carried out. The next key information we need to add to
the VSM is the Takt Time. Takt time is the

31
“heartbeat” of the process. Takt time is defined block in the right bottom corner of the step.
as the pace the process much keep in order to The standard time for the whole process is the
keep up with the pace of incoming customer sum total of all the standard times of the steps.
demand. If the Takt time is too slow inventory
will build in front of the process. If the Takt time Standard time is not necessarily the same as
is too fast the resources remain idle. Takt time the actual time spent. It has more to do with
is calculated by dividing the net working time our expectations. For example, in an order
available by the number of incoming customer entry step, we may determine that it should
requests during that time. take 10 minutes to accept and record an order
from a customer.
Takt time determines the correct pace of the
process to ensure that it delivers products to The Standard Time help us to design processes
match customer demand. If the average time that are capable of delivering value at the Takt
between two outputs of the process is higher rate required. We can then measure how much
that the takt time, then customers will have to time it takes us in reality. The difference shows us
wait longer than the expected cycle time. Takt where the process can be improved. In practice,
time is vital for managing the flow of a process differences between the standard times and
and understanding how long can be spent on measured times reveal waste in the process step.
the steps in the process.
7.10 Time Metrics
7.8 Lead Time
Time metrics are added to the VSM, and
The next piece of information we need to add must be based on measurements. Most
to the VSM is Lead Time, the time between the measurements can be derived from tooling,
moment a customer requests something and however, it may be necessary to go the
the moment that it was delivered. To calculate workplace to measure how the work gets done.
Lead time, we subtract the time the request
was submitted from the time the customer The four most important measures are:
received the requested performance.
1. Cycle Time is the time we actually spend
on creating the product or service. This
The lead time depends on work-in-progress and
includes all time spent on VA, NVA and
how many products are delivered on average NNVA activities executed while producing
in a given time. Shortening lead time often goes the product or service.
hand-in-hand with the reduction of the work-
in-progress. 2. Waiting Time is time spent on waiting for
the next activity.

7.9 Standard Time Together, cycle time and waiting time make up
the time spent in a process.
Next, we will start adding information to the
process flow. The first piece of information These are recorded on the serrated line, the
is the Standard Time. This is the time that a time line, underneath the process steps. The
particular step should take to carry out by drawing convention states that the waiting
design. We record the standard time in the time after a step is part of the step.

32
A key measure of the flow of the process is 2. The Capacity is the calculated maximum
Process Cycle Efficiency (PCE). This is the production volume of a process or process
percentage of total lead time spent on value- step
adding activities and is stated at the end of the 3. The Throughput is the actual production
timeline. volume of a process or process step, taking
all constraints into consideration
Two other useful time measures are machine
time and changeover time. 4. Work-in-Progress is the average volume of
work that is in progress at any point in time
3. Machine Time is the time the product is
worked on by a machine. In the case of Each of these metrics gives us a richer
IT, we see machine time when database understanding of the process, and helps us to
reorganization needs to take place or when analyze the process.
a Business Intelligence system needs to
load data.
7.12 Symbols in the VSM
4. Changeover Time is the time needed to
reconfigure a device between two units of The final step is to add symbols to the Value
work. Within IT, we find this kind of time Stream Map. These symbols come in two
when we need to adjust a development categories: Waste and Other Symbols.
environment between different program
changes. Within IT, changeover time also The first type of symbol is Waste. Here we aim
occurs when we go from processing a
to define where types of waste are present. It
change to resolving an incident, back to
is reasonable to assume that where there are
processing the change.
waiting times, there is probably inventory. We
Machine time and changeover time are really do not necessarily need to put the inventory
specific forms of waiting time. symbol at each location. It is about identifying
and recording the wastes with the most
7.11 Process Metrics influence on the process.

For each step in the process, we can also add On top of the waste symbols, there are a few
process metrics. Other Symbols that help us create a readable
Value Stream Map. We can distinguish between
Four possible process metrics are: Physical Flows and Information Flows. In
IT processes, the most important flows are
1. Parallel Lines. This is the number of Information Flows. The core IT process of
simultaneously operating lines of work. developing software to making it available to
Having insight into the number of parallel customers is an example of an information flow.
lines can help us to understand whether
When we investigate, for example, the delivery
there are bottlenecks that may be
remedied by adding extra processing of hardware, we must take the physical flow
capacity. This could mean both people into account.
and machines are added to increase the
capacity of the process step One very useful symbol is called the Kaizen
‘burst’. This symbol illustrates the areas where
more investigation is required; we know

33
something is wrong but we have not been able that help to, for lack of a better word, clean
to identify it sufficiently. We need to define up our processes: Sort, Simplify or Set, Shine,
a problem statement and work towards a Standardize and Sustain.(5S)
solution. It may be necessary to produce a new
SIPOC and more detailed VSM for that part of Sort is about eliminating all unnecessary
the process. tools, parts, and instructions. We aim to keep
only essential items and eliminate what is not
required, prioritizing things per requirements
and keeping them in easily-accessible places.

Simplify or Set in Order ensures that

everything is in the right place. There should
be a place for everything and everything
should be in its place. Also the place for each
item should be clearly indicated. For IT, this
may mean having a standard repository
for documentation. Standard use of the
Figure 4: Common symbols used in a Value Stream Map Configuration Management Database (CMDB) is
a “set in order” activity.
Once we have produced a Value Stream Map,
Shine is simply about keeping the workspace
we need to analyze it. Areas to investigate
and all equipment clean, tidy and organized. At
include:
the end of each shift or working day, the work
• Muri: what policy-based waste is associated area must be cleaned and everything must be
with the process? put back in its place.
• Mura: where do we find variability and what
is it based on? Standardizing is a very important activity
• Muda: what kind of waste is in the process? within Lean. Work practices should be
consistent and standardized. All employees
• How can we understand and improve the
flow of the process? doing the same job should be able to work in
any station with the same tools that are in the
• Do we need a push or pull mechanism for
same location in every station, with the same
this process? How could pull help us to
unburden the process? standard procedures. Standardizing makes
doing work easier, particularly routine work,
Lastly, but certainly one of the more important and it makes it easier for resources to take over
aspects, how can we ensure that each step is work if necessary.
carried out “first time right”?
Lastly, we must Sustain what we have
7.13 5S installed. This means maintaining and reviewing
standards. Once the previous 4 S's have
There are two standard Lean concepts that we been established, they become the new way
can use to actually improve a process. The first to operate. While thinking about the new
is 5S. 5S provides us with a set of hygiene rules way, also be thinking about better ways. It

34
should be made as a habit and be continually steps. Discuss the proposed actions with the
improved. stakeholders. Ask for their commitment and
ensure that where decisions are required, they
Investigating each of these aspects in relation are made.
to each process step can help to ensure that
processes become more efficient through It is important to involve the people who work
simple improvements. in the process in the improvement actions for
that process. The people in the process must
7.14 Heijunka feel ownership and so we allocate actions to
the people themselves. This has been shown to
One of the goals of improving processes help in the acceptance of changes among other
through Value Stream Mapping is to reduce workers in the process.
Mura, or variability. Production levelling or
Heijunka is a Lean technique for this purpose. In summary, Value Stream Mapping helps us
to effectively understand, analyze and identify
Heijunka is vital for achieving flow. It means improvements to processes. In small steps, we
ensuring that each process step can process take a process from its current state to a future
the same number of units of work per unit state which, through the implementation and
of time. The aim is to produce intermediate sustaining of improvements becomes the new,
products and services at a constant rate so improved current state of the process.
that further processing may also be carried out
at a constant and predictable rate. One of the
ways to achieve Heijunka is through reducing
bottlenecks. We can do this by adding parallel
lines or other capacity.

So, we have built and analyzed the current

state of the Value Stream Map. We have
identified the places where we need to
improve and we have thought up a number of
improvements that we can carry out.

7.15 Improvement Plan

Next, we must plan the way we intend to

implement the improvement actions. The plan
must cover no more than 12 weeks. If the plan
is longer then you need to focus on smaller
improvements that can be carried out more
quickly. Obviously, there may be improvements
that may take longer, for example, increasing
server or network capacity. Even these
improvements can be broken down into smaller

35
8. Performance
Performance is a critical component of Lean. One topic that sticks out in particular is time.
It is about ensuring that decisions are based Time represents the most important production
on facts and figures rather than opinion and factor within IT. As we saw earlier, one aim is to
conjecture. understand how much time we spend on value-
add work versus non value-add work, so that
Every Lean publication mandates the need we can steer this time usage.
for performance and its measurement.
Performance, like all other dimensions of Lean, Lastly, time on its own is not particularly
starts with the customer. The first step is to go valuable to the Lean IT organization. It is
back to the Voice of the Customer, and more particularly what we do with the time that
specifically the Critical to Quality. The CTQ tree makes it valuable. What we do with our
gives us a direct link to the things we should be time depends on the results of a skills and
measuring. But even the CTQ can contain too knowledge assessment and plan to support the
many “things to manage”. We need to choose alignment of customer demand and IT supply. It
the right indicators. is therefore vital that we know what skills and
knowledge we have available so that we can
We have already seen how important numbers ensure the right people are assigned with the
are in the process dimension. Value Stream right units of work.
maps must be accompanied by performance
data. In the Problem-Solving module, you
8.1 Defining Performance
will also see how important measuring
performance is. So what do we mean by Performance? It is the
completion of a chosen objective or obligation.
Taking a brief look at the three main concepts
The performance includes both the result and
we will be discussing in this section, we find
the way the result is achieved, whereby the
that within Lean, IT needs performance
result is the outcome of a process.
indicators, time and capabilities described
as skills and knowledge to ensure that the Measuring performance enables us to achieve
value, the desired result of the performance, is objectives. In the case of Lean IT, we always
achieved. aim to relate these objectives to customer
value. In relation to the Plan-Do-Check-Act
Performance indicators must be related to
cycle, we find that in the Check step we need to
agreed objectives and/or critical success
form an opinion of how we did in comparison to
factors. They must be consistent throughout
the plan. The only way to do this objectively is
the IT organization and must reflect the IT
to ensure that when we planned our activities,
organization’s strategy and its customers’
we included in the plan how we would check
needs. Performance indicators can cover many
whether we achieved the plan. This means that
different topics.
while we are doing the work, measurements
were being carried out that form the basis for
an evaluation.

36
Within the Lean IT organization, we aim to to the service than the speed of resolution of
make performance information available to the incident. Aspects such as friendliness of
everyone involved: the service desk agent and how quickly the
telephone is answered are also part of the total
•• Primarily, the team producing the
performance must get regular and frequent performance. Through the CTQ we dealt with
information feedback so that the team in the Customer module, we can understand
members are able to understand whether which of these aspects is most important.
the performance meets the requirements.
•• Team managers must also be aware of the 8.2 Performance Indicators
numbers so that they can identify whether
there is a reason to investigate possible We now come to a concept that is central
shortcomings with the team.
to the measurement of performance: The
•• Lastly, the team must be prepared to share Performance Indicator. Clearly defined
performance information with customers. performance measures (or indicators) are
Based on these insights, the customer can
vital in order to understand whether the
help to define what level of performance
organization is achieving its goals. Performance
represents value for the customer.
indicators can and must be used at all levels of
Let’s take a brief look at a common example. the organization.
Customers generally indicate that they would
like to have an incident resolved the moment Measuring performance is in fact relatively
they report it to the service desk. The IT straightforward. The key questions are:
organization cannot deliver on this requirement
1. Are we measuring the right things, and
each time. In Voice of the Customer discussions,
the customer indicates that the level of 2. Are we using the measurement to help the
performance is good. organization to continuously improve?

By measuring the performance, the IT If we do not take action based on the results
organization can put a concrete number to of the measurement, then there is no point to
the general feeling of the customer. We may measuring.
find, for example, based on the measurement
of the average time to resolve incidents, that Here, we need to distinguish between general
90% of calls are resolved within 1 day. This metrics and Key Performance Indicators
measure can be equated to a ‘good’ level of (KPIs). A KPI is a central performance
performance. Sharing this information with the measure that supports the execution of the
customer can help the customer put their own strategy. KPIs cascade from the strategic level
thoughts into perspective. to the operational level and are consistent
across the organization. There must be a
In later VoC discussions, the customer may clearly defined measurement procedure
indicate that the expectation has changed and so that everyone knows how the KPI is
now he expects a better level of performance. measured and most importantly how it can
Not that calls must be solved more quickly be influenced. Ideally, a KPI should be long
but that a higher percentage must be solved lasting. This is to ensure that we can follow the
within 1 day. Obviously, there are more aspects trend of the KPI over a longer period of time,

37
especially since the achievement of a strategy 1 day. This contributes to the ability of the IT
is a longer term objective. organization to meet the time-to-market goals
of its customers.
Lastly, it is important that the KPI can be
controlled by the team, in this case the IT Once we have performance indicators, we
Management Team. All performance indicators need to make them work for us. What tools
should be: Specific, Measurable, Achievable, can we use to visualize performance so that
Realistic and Time-bound (SMART). we are constantly aware of its importance and
prompted to do the right things? This is about
KPIs are derived from the strategic intent of the giving all levels of the organization the tools to
IT organization and measure the performance be in control of their own performance. This
of a key organizational objective. Performance means ensuring that measurements become
measures always derive from the strategy of part of the organizational or team Plan-Do-
the organization. This means that the KPIs of Check-Act cycle. We also need to ensure that
the IT organization should be related to the measurements become one of the aspects of
goals of the overall organization for which the Visual Management, which we will deal with
IT organization works, even if this is an external later in this document.
customer.
KPIs are vital for monitoring performance in
At the same time, a performance indicator relation to the delivery of customer value.
should be controllable by the team that is Having said this contributing to customer value
being measured according to the indicator. A is more important than achieving the specific
measurement procedure is available to ensure goal or target of a KPI. This also means that
that everyone measures the KPI in the same managing the long term development of the
way. As with the organizational goals that trend of a particular KPI measurement is more
should focus on longer term performance important than meeting a particular target.
indicators, especially KPIs, should also be
long lasting. In this way, performance can be Managing with KPIs is a balancing act. Within
consistently tracked over a longer period of IT, a common occurrence is that the number of
time allowing the organization to see whether incidents has a tendency to increase as a result
improvement measures have a sustained of an increased number of changes. The IT
impact. organization will only truly be successful if the
number of incidents does NOT increase in line
The idea is that teams within the IT with the number of changes. On the contrary,
organization have freedom to choose the we should be aiming to reduce the number of
performance indicators that they can directly incidents with an increased number of changes
influence. The requirement is that the team can since at least some of these changes will be
explain how these performance indicators are related to problems that have been solved, and
related to the KPIs. An example here is a team our aim is to implement changes that do not
that is responsible for delivering development, introduce new errors into the IT infrastructure.
test and acceptance environments. Their
principal performance indicator may be the KPIs only work if the complete set of KPIs
ability to deliver a new environment within represents the aforementioned balancing act.

38
It is inevitable that there will be some tension may choose to define it as the ability to
between the KPIs as described above. At the continually shorten the time between
organizational level, KPIs should have a certain the request and the delivery of the
functionality.
tension. If all of the KPIs display their intended
trend, we know that one area is not improving 3. The definition obviously impacts strongly
at the expense of another. on the formula. The two definitions
described in step 2 will lead to different
So we have seen how to determine performance formulae for determining the performance.
indicators and their position within Lean IT. The
4. A KPI must have a unit of measurement.
key consideration with performance indicators
Do we want an absolute number, an index
is that we must always be aware of the impact or a percentage? This choice can influence
that performance indicators have and must the way a KPI is read. Is it, for example,
have on behavior. Often achieving a particular interesting how many incidents are open,
performance level with a KPI becomes a goal or does the percentage of incidents still
in itself. This must not be the case. Contributing open from this month tell us more?
to customer value is always more important
5. How regularly is the KPI reported? Within
than achieving a KPI. Performance indicators Lean, we need KPIs that are refreshed
must be used to direct behavior across value on a frequent basis. Only KPIs that are
streams. In the case of IT, we see that processes refreshed at least once a week can be used
often go from the customer through an internal to actually steer performance. Preferably
IT organization to an external service provider. KPIs must be measurable on a continuous
basis. As we will see in the Organization
Lean IT encourages organizations to look across
module, the daily and weekly cycles within
the organizational boundaries to measure the
Lean IT require KPIs that are useable in
value for the customer end-to-end. these cycles.

6. The KPI must have an owner. This is the

8.3 Defining a KPI
person who is responsible for the quality
of the KPI and preferably also someone
The next step is to actually define the KPIs who takes overall responsibility for the
related to the strategic intent of the IT performance regarding the KPI across the
organization. organization. This almost inevitably means
that a member of the Management Team
Defining a KPI is not as straightforward as it may will be the owner.
seem. The minimum aspects to be defined are:
7. In order to ensure that KPIs are balanced,
it is advisable to consider multiple
1. The goal of the KPI. What will this KPI
perspectives, for example in the Balanced
help us to measure? An example is: the
Scorecard from Kaplan and Norton, which
time-to-market of changes will help us to
looks at Finance, Customer, Internal and
understand whether we are meeting our
Innovation categories. The categories
part of the customer’s goal to innovate
may be taken directly from the strategy.
quickly.
In the example in the previous section,
2. The definition of the KPI tells what the we could categorize KPIs at the level of
KPI is about. The time-to-market KPI is standardization, predictability, costs and
defined as the ability to meet an agreed productivity.
implementation date. Alternatively, we

39
8. This KPI card can be used to define other It is vital to manage the trend of a KPI, not just
performance indicators, not just KPIs. In look at a single data point or a norm. When
this case, it is important to know at which managing the trend, we must not only ask
level in the organization the performance
ourselves what to do when the trend goes the
indicator is in use. For KPIs, we know that
wrong way, but also ask ourselves what we are
the Management Team is the main user.
However, KPIs may also be used at other doing right when the trend goes in the right
levels in the organization. The number way. In the latter case, we need to understand
of open incidents is interesting from the what we did right and how we can continue to
strategic level all the way through to the do the right thing.
work floor. An individual must know how
many incidents he has to resolve.
8.4 Time Usage
9. Related to the formula, it is vital to define
which data is used to calculate the KPI. Within an IT organization, the key component
This is to ensure that each time the KPI is for delivering the performance that customers
measured, it is measured consistently. The require is people. It is people who decide
data collection process includes both the
which technology choices to make. It is people
data and the way it is processed as it is
turned into the performance indicator. Are who design, deliver and manage IT services.
there, for example, any exclusions? If we Breaking down the “people” component, we
are measuring the performance of changes, find that it is all about ensuring the availability
do we include or exclude standard of the right amount and allocation of skills (and
changes? attitude) at the right time.

10. We must also define the measurement

The aspect of people can be subdivided into
accuracy. Will we round percentages up
or down to the nearest integer or will two key components. When we hire a person,
we present a percentage to hundredths we are in essence “buying” skills and knowledge
of percent? This will depend on what for a specific amount of time. Time is therefore
kind of improvement is possible. Moving the key production factor within IT, since it is
the performance from 60% to 80% is only through the skills and knowledge of the
unlikely to depend on 10ths of a percent. people that the money spent on technology
Going from 98,7% to 99,5% may even
(hardware and software) can be put to good
make it interesting to measure 100ths
of a percent, to understand progress of use.
improvements.
There are two characteristics of time that make
11. Lastly, under the euphemism of “issues”, it useful as a performance indicator: Control
we need to understand how the KPI can and Immediacy.
be manipulated. Knowing how to fudge the
numbers will enable us to be alert to any •• The first is Control. We have direct
manipulation. control on cost through time usage. It is
more difficult to control cost based on
You may feel that you are missing a key aspect: managing salaries since in most cases
the norm. Within Lean IT, norms are used as contractual agreements are not easy to
improvement goals rather than absolute levels change in most countries.
of performance. •• The second is Immediacy. We can
almost instantaneously change what

40
 somebody is doing with their time. If •• Dividing the amount of time worked by the
someone is working on a change and average lead time, we get an approximation
an incident comes in, we can ask the of the PCE for changes.
person to stop working on the change
and pick up the incident in a matter of 8.5 Skills and Knowledge
seconds. This obviously has a downside:
too much chopping and changing will
The second measurable part of people, next to
lead to a “fire-fighting” culture within the
IT organization. time usage, is their Skills and Knowledge. The
vital aspect here is to determine whether the
Lean IT requires an intimate knowledge of time IT organization has access to the right amount
usage within the IT organization. We need of skills and knowledge to provide the value
to understand how time is used, particularly that customers expect from IT. The objective of
related to the delivery of value. We can define understanding the level of skills and knowledge
time based on the activity that is being carried within the organization is to balance the skills
out: Value-Add, Necessary Non-Value-Add and and knowledge to deliver the value with the
Non-Value Add. Achieving flow in processes is future demand required by the customer.
one of the ways in which Lean changes the way
Skills and knowledge are important since
time is used. The key question is how free time
we must know whether the organization has
is used. Lean recommends using it to carry out
enough to deliver the value their customers are
improvement initiatives or respond to changes
looking for. A lack of skills and knowledge is a
in customers’ requirements.
driver of both Muri and Mura, and a contributor
We can analyze the use of time through the to all kinds of waste.
Lean concept of Process Cycle Efficiency
In this paragraph we explain the Lean IT tools
(or PCE). With this tool, we gain a detailed
that are used to develop people and build
understanding of what time is spent on. This
competencies with the Skills and Knowledge
helps us to identify areas of waste. The time
matrix. To improve the performance of a team
measured in a PCE analysis is based on and
or department and to develop a group of
can provide input for the (activities of the) key
people, we need to understand their current
Value Streams in which people work.
capabilities. The objective of the Skills and
Process Cycle Efficiency is calculated by dividing Knowledge assessment tools is to develop
the total Value-added Time within the process people in the team so they can acquire skills
by the total Lead Time. The closer the PCE and knowledge that are in line with customer
is to 100%, the greater the process has the demand.
characteristic of flow.
One of the elements that contributes to waste
Within IT, we can quite easily get an estimate of is the lack of flexibility (Muri) to align with
the PCE of a process. We do this by: customer demand because employees do not
have the right skills available. For example:
•• Identifying the average amount of time an IT organization’s customer requires more
spent working on, for example, changes.
Java than .Net expertise, but the IT team
•• Determine the average end-to-end or lead cannot match the Java demand. The customer
time of a change. migrated to Java and the IT organization did

41
not follow at the same speed. The consequence The opposite model is that employees develop
is that the IT organization has .Net-skilled skills based purely on personal preference. On
people who are under-utilized due a lack of the an aggregated team level, a mismatch with
right skills. customer demand may be identified. Another
aspect is that one person in a team holds
IT organizations tend to focus on the unique skills or knowledge, which implies a
development of expertise in narrow technology continuity risk. This happens regularly in IT-
areas which takes years to mature, when they teams. The radar graph shows the customer
should aim to develop people who are more demand (red line) and the current available
flexible, agile and adaptable to the changing skills (blue line).
needs of the customer. Of course, a team needs
a mixture of experts and more multi-skilled
people.

The Skills and Knowledge Analysis is a Lean

IT assessment tool that analyses current team
skills and competencies and matches that to
current and future customer demand in types
of skills and volume.

How does the Skills and Knowledge Analysis

work? The team determines what skills and
knowledge are needed to deliver the customer
value. This is based on an understanding of
what has been asked of the team in the past Figure 5: Example of the results of a skills and knowledge
and an estimation of what will be asked in the analysis
future. Using the Voice of the Customer and
associated CTQ, the team can identify where
more or a change in skills and knowledge are To apply a Skill and Knowledge Analysis follow
required. these steps:
•• Analyze skills and knowledge currently
The result is a gap analysis showing where available in the teams based on the voice of
there is a mismatch between the skills and the customer. For overview purposes, group
knowledge available. Based on the gaps, the them in categories
team can manage its own development by •• Create a form with the skills and knowledge
creating a plan to drive the development categories and items
of existing people from single skilled to •• Send it to every employee and request a
more multi-skilled, thus removing personnel response
bottlenecks and increasing the flexibility and •• Aggregate all the responses to develop a
consistency of performance within the team. team view on the current and future skills
and knowledge requirements
Based on this analysis, people in the team are •• Discuss the Skill and Knowledge matrix with
encouraged to develop in a certain direction. the employees during coaching sessions

42
•• Change and update personal development
plans and track progress both on individuals
and at the team level
•• Repeat these steps at least four times per
year because the Voice of the Customer
– the key driver for required skills and
knowledge –will change

The most common approach is to build an Excel

spreadsheet model. The benefit of the Lean IT
assessment tools is that they are very powerful
in reaching a result but not very complex to
implement.

In the end, we need to balance the skills and

knowledge with the time factor in the form of a
resource plan to ensure that both are available
in the right quantities when needed to deliver
value to the customer.

43
9. Organization
Without mechanisms to anchor these aspects Visual Management is about effective team
within the IT organization, we will not be able communication and real-time updates on the
to consistently deliver value. The Organization team’s work. Team performance and workload
module focuses on the structures for ensuring is shared on the Day Board for visibility and
cooperation between people. effective team communication.

We will look at three interconnected

9.1 Organizing Lean IT
mechanisms. First, the way the IT
Organization is Structured, and how decision- When looking at how to deploy people within
making information flows through the IT in such a way that they are facilitated in
hierarchy. Second, a key behavior linked to delivering value, the principles for organizing
the structure:, Performance Dialogue. Last, are customer orientation and speed of
the role of Visual Management as a vital communication.
organizational mechanism for ensuring the
progress of work. Why should an IT organization be customer-
oriented? Traditionally, IT organizations have
To organize for Lean means we need to shape been technology-centric, shaped in functional
our organization to deliver value for customers. or technical silos. Quite often the department
for application development is structured
Traditional IT organizations are shaped in
separately from the operations department.
functional silos. Lean IT organizations ensure
In each of these departments, we may further
there is a strong customer orientation in
compound the silo problem by creating
the way they are structured with their value
teams focused on a particular technology,
streams. In this way, they empower the people
for example, databases, server management,
in the frontline of the organization to operate
network management, website development,
effectively and resolve problems quickly.
COBOL programming and so on.

We must also organize the flow of information

This has led to the impression that IT
through the entire IT organization. In a
organizations are essentially not interested in
performance dialogue, people define an
what customers want, only in how to ensure
objective, offer each other support and
the technology works. In the current world,
evaluate the achieved results. In order to
IT organizations must respond quickly to the
discuss progress on results and communicate
needs of the customer. In order to do this,
rapidly across all hierarchical levels, a cascade
they must gain a customer-centric focus. This
of performance dialogues needs to be in place
does not necessarily mean that they should
for a Lean organization to work swiftly and
be organized in customer teams, but it does
smoothly. Performance dialogues help teams to
mean that the orientation through the IT Value
discuss progress or problems and the cascading
Streams must have a strong customer-focus.
mechanism helps them to get support from a
One of the ways of doing this is to ensure
higher lever for rapid resolution.
that frontline employees are empowered to

44
understand and deliver the value required by Therefore, we need to:
customers without having to gain permission
•• Build an infrastructure of meetings so that
from management. ideas, suggestions and requests for help
can flow readily through the channels of the
IT’s customers demand the full service, not just organization. When an issue exceeds the
development or operations. mandate of a given hierarchical level, there
must be an efficient information cascade
Lean IT organizations ensure a strong customer to ensure that the request for support gets
orientation in the way they are structured with to the correct hierarchical level as quickly
as possible, so the “support” is delivered as
their value streams. The aim of the customer-
soon as possible
oriented IT organization is to empower the people
in the frontline of the organization to operate •• Replace the old for the ‘new’ meeting
structure: Making it more effective
effectively and resolve problems quickly. Teams
and efficient, including the participants
are ideally organized around the full service for a
who can decide on the relevant issues.
customer or a specific group of customers. Meetings in the new structure are time-
boxed and tied together to ensure rapid
Increasingly, technicians do not necessarily decision making, and avoiding interruption
need to be close together. It has become more or lack of focus
beneficial to cluster people serving the same
customer (group) in a value stream. Based on above, the new communication
cascade works like this:
The key argument of “technical knowledge •• At the team level, the team uses a Day Board
sharing” can be solved in other ways. The to start the day. They discuss the planning
preferred way of organizing is through for the day, synchronize their activities,
multidisciplinary teams that have the mandate evaluate issues or production interruptions
to serve the customer integrally. and they make sure everyone gets the right
support for their tasks at hand
Quite often, the biggest barrier to adopting lean •• Issues that cannot be solved by the team
practices is organizational structure. As products or exceed the mandate of the team will be
move from one department to another, a big gap handed over to the Team Manager who
takes the issues up with the next level of
often develops, especially if each department
management
has its own set of performance measurements
•• Teams ask for help and will be supported on
that are unrelated to the performance
each issue they face and cannot solve alone
measurements of neighboring departments.
Sub-optimizing measurements are very •• On a weekly basis, the team discusses its
Key Performance Indicators, evaluates team
common, and overall optimization is virtually
results over the past week and determines
impossible when they are in place.
what goals need to be achieved in the next
week to come. Any impediments the team
9.2 Communication Cascade identifies are discussed. If the team cannot
solve these impediments, they will ask for
Rapid and effective communication is support from a senior level
established when information can easily •• At a senior level, the same routine is
cascade through all levels of the organization. followed

45
•• On all levels, discussing performance will reflect on actions and work completed. The
lead to improvements being identified time between the action and feedback is short,
and appropriate counter measures being which makes the impact much stronger. There
implemented
is very little impact from feedback received
Once the Cascade has been defined and on work completed weeks ago. What were
aligned, it is embedded into the IT organization the exact conditions? The perceptions will be
through everyone’s agenda. An efficient quite different. So, improving performance and
cascade has been proven to free up time for providing timely feedback are the key methods
other important activities. Particularly, the for continuous improvement.
aligned agendas allow for reserving open time-
In a Lean transformation, a lot of attention
windows for specific problem solving activities
is given to teaching people how to give and
like Kaizen events.
receive constructive feedback. In Lean IT,
Since management needs to spend time on the several instances for reflecting on achieved
shop floor for on-the-job coaching, these open performance are defined. First, at the start
time-windows can also be reserved up front. of the day, teams briefly discuss the previous
day’s results and issues. Second, at the start
Common activities to align all agendas for of the week, the team’s performance during
optimal sharing of information are: the previous week is also discussed. Third,
performance is discussed one-on-one between
•• Capture the agendas of all involved and
the manager and the employee during the
identify recurring meetings, time-frames,
performance dialogue. So, what is new
involved roles, required decisions
here? Almost all companies have one-on-one
•• Start with the shop floor; focus on the work,
manager-employee meetings. Usually, however,
on operations. Then align coordination and
those meetings are unstructured and only the
managerial effort with whatever needs to be
facilitated on the shop floor current daily tasks are discussed. It becomes
more of a social meeting to build the working
The alignment of agendas is a vital activity for relationship between manager and employee.
freeing up time. This freed up time can then be Of course, this is positive, but not sufficient
used to carry out more improvements. Thus, enough if continuous improvement is the
creating a virtuous cycle in which the delivery objective.
of value is continually improved.
The performance dialogue brings together a
9.3 Objectives, Feedback and Performance number of Lean behaviors in a single meeting:
dialogue Goal-setting based on an integral and factual
view of the work, providing support, giving
One of the key elements of Lean IT is feedback, showing respect.
transparency with regards to objectives and
the performance against these objectives at The following three topics are discussed in a
both the team and individual level. If we aim to performance dialogue meeting:
improve the value stream we should regularly
1. New and ongoing objectives should
go through the Plan-Do-Check-Act Cycle. The
be discussed between the manager
essence is to give and receive feedback and and employee. What are the mutual

46
 expectations and how are these management. The biggest change when
defined? Unclear expectations are the transforming to Lean IT is the introduction
most common cause for disagreement of Visual management - upon entering a
between a manager and employee. In the
workspace or office the presence of Boards
performance dialogue, specifically defined
indicates a Lean team. The concept of Lean
objectives are discussed and agreed. These
objectives should (again) be SMART. To do Visual Management is extensively covered in
this, the manager should be knowledgeable the book “Creating a Lean Culture” by David
about the daily operations of their team. Mann (2010).
This is one of the key reasons that a
manager should spend 50% of their time Visual Management fulfills a crucial role in
with the team in the workplace. A Lean Lean. It ensures we can achieve Jidoka, the
manager cannot be in meetings all day.
aim of which is to create a visible and clear
2. The manager offers support to the view to ensure that any disturbances to flow
employee for the achievement of their can be identified. In effect, Visual Management
objectives. Why does the employee is about effective team communication.
need to achieve these objectives? How Transparency and visibility are created by a
can the manager help facilitate this? The smooth flow of information. This ensures that
manager has the role of a coach to help
everyone can follow the progress of work
the employee and discuss how they can
achieve the objectives. which makes for an efficient coordination of the
work.
3. Constructive feedback and suggestions
for improvement are given. The manager Visual management covers a number of topics:
will have observed the employee while Steering the work, planning and reviewing
working. The manager then gives feedback
progress and managing improvements. For
on how the employee performed or
each of these topics, visual management has a
behaved, with the intention of further
developing the employee. Ideally this set of objectives.
happens in a climate of trust and respect.
This is difficult to achieve but essential for The objectives are:
building a high performance organization.
•• To connect management to the day-to-day
As the chairman of Toyota once said: “Build
operation of the team. This ensures that
people first, then cars.”
managers are aware of the state of value
delivery to customers
A performance dialogue can be a one-on-one
discussion, but carrying out a day start or a •• To share information on the progress,
week review is also a form of performance priorities and problems of the team, The aim
of visual management is to ensure that the
dialogue. The ability to do performance
information is as current as possible with
dialogues effectively is a key skill requirement real-time status updates preferred
of anyone working in a Lean IT environment.
•• It also facilitates dialogues that are more
fact-based. Through the clear definition of
9.4 Visual Management work, the team is better able to identify
what has been done, what is being done,
In order to improve performance, early and what still needs to be done
feedback and the knowledge of what is •• Visual management enables the team to see
happening are key elements of operational which task is not progressing. In traditional

47
 IT organizations, we find team meetings that Week Board and the Improvement or Kaizen
happen once a week, sometimes once every Board. The objective of Visual Management is
2 weeks. These meetings lead to a list of real time updates, sharing of lessons learned,
action points. The dynamic tends to be that
and reflection/feedback on the work done
most action points do not get carried out by
the previous day. Visual management creates
the next meeting. The owner of the action
point is put under pressure to carry out transparency in the status and progress of
the action. This may happen multiple times the work. The benefit of the system is that it
and may lead to an intended action never is always clear what is going on in the team or
being carried out, due to shifting priorities department.
and new action points. Visual management
ensures that actions points are reviewed on Lean requires transparency. Visual
a daily basis and that time is reserved for the
management means that even someone who
goals that are set
is unfamiliar with the work of a team can, upon
•• Visual management also helps to create entering a Lean workplace, scan and quickly
consistent and effective communication. It
ascertain which aspects of the processes
removes the need for a series of one-on-
one communication that inherently has are under control and which are not. Visual
the risk of an inconsistent message. The management is all about being present on the
communication is effective because the work floor and using visual aids to show how
entire team hears the same message at the the organization is performing.
same time
•• Lastly, frequent feedback loops are A benefit of working transparently and
established within the team. This is based inclusively is trust. Once employees are
on common knowledge of what is going brought into the creation, maintenance and
on in the team. The knowledge is common improvement of the process, they then have a
because it is continually visible and up to stake in its success.
date

Quite often, managers spend less than 10% of 9.6 Day or Kanban Board
their time with the team, and are not aware
of what the team is doing or where support is The Day Board or Kanban Board is the visual
needed. tool used to support the start of the day’s
activities.. This 15-minute time-boxed daily
Managers need to embrace the adage ‘go see, meeting offers the team a window to discuss
ask why, show respect’ and to really observe operational performance and allows for
the flow of value and what is preventing it synchronization of workload among team
from flowing, they need to spend substantial members. Impediments that block the work
time on the Gemba, the place where the work flow can be identified and avoided. As a
is done. result, impediments may also find their way
to the right level of management or on to the
9.5 Making work visual improvement board.

A Lean team uses three types of boards as There are two ways of designing the board
a technique to create a visually managed used on a daily basis:
workplace: The Day or Kanban Board, the

48
The first is based on the days of the week. This supports a team that needs to do work on a specific
day or wishes to plan work for specific days in the week. We call this a Day Board.

Each team member records all the activities they are going to perform that day. On the day board, work
is represented with tickets; small cards which make it possible to see which work is progressing and which
is not. Regular work, for example, on white tickets, ad-hoc or unplanned work on yellow tickets.

Figure 6: Example of a Day board

The second is a visualization of the process in which the team ensures tickets ‘flow’ across the board
as the work progresses. This board helps to identify where there is spare capacity for work to be
pulled into the next step in the process. This is known as a Kanban Board. The design of the board
is dependent on the team and type of work they perform. In software development, we may find
alternative versions of the Kanban board. These will generally be designed along the lines of the
software development process. They may include Backlog, Ready to Code, Coding and Complete or a
simpler variation on this theme: To Do, Doing, Done.

The Day Start is a daily, morning ritual in which each team member shares with the group their daily
tasks and goals, as posted on the Day Board. It is also an opportunity to determine if the previous day
was successful and to ask for or offer help if needed. The Day Start is facilitated by a Team Leader.

Typical questions to be asked by the Team Leader are:

• Were the goals of the previous work day achieved?

• What went well and what can be improved?
• What did we learn?

49
•• What is the objective for this day and when at a distance. Often, different colors are used
are we successful? to identify different types of work. These
•• Who needs help on what and who will offer Kanban tickets are typically used on the day
help? board. The benefit is that the requirements for
information processing can be simplified as a
During the day start, the team also takes time result of Kanban, since we know exactly what
to check the morale within the team. In this information is needed to ensure the progress of
way, the team leader can identify and act on the unit of work.
any problems as they arise. Discussing morale
is often initially quite difficult. However, as
9.8 Week board
team members become more open they will
increasingly be prepared to discuss morale
The Week Board provides at glance information
issues. This is a sign that the team has a higher
on the team’s objectives for the week to come.
level of trust.
A limited set of key performance indicators
Remember to focus on finding and resolving
offer insight in the development of the team’s
problems. In the bottom left corner of the
quality, timeliness, and cost. Other indicators
Day Board, there is a place to document any
include customer satisfaction and employee
problems that have been identified. These
satisfaction.
remain on the board until they are addressed.
Also the team leader’s daily agenda is available In the week start, the team gathers around the
on the board so that the employees know week board and discusses team performance.
when the leader is available. Identified problems find their way to the
improvement board. The week board supports
9.7 Kanban the week start, a team meeting that generally
last one hour.
Kanban is the embodiment of the pull/
replenishment system, as opposed to a push/ Topics to be covered in the week start meeting
scheduling system. It uses signals to ensure are:
that production is levelled. The ultimate form of
•• The work objectives for the week to come
production is single-piece flow, which enables
and whether the objectives from the
mass-customization. previous week were achieved
•• Improvements that can be made, also given
Kanban is not an inventory control system; it
the status of the key performance indicators
is a scheduling system that helps determine the team has selected
what to produce, when to produce it, and how
•• Performance on the team’s performance
much to produce. A simple example is that an
indicators, specifically including the way the
empty slot on the day board means that there team works and what the customer thinks of
is space for new work, the empty slot works as the team’s performance
a replenishment signal for a new Kanban.
Discussing the improvements on the
Again, this is a visual system that benefits from Improvement Board is often part of the weekly
clear simple information that can be identified meeting.

50
Typical questions the team answers include: determines whether they should solve them
right away, solve them later or not solve them
• Did we meet our KPIs and team goals last
week? at all, once they have defined the impact of the
problem and the feasibility of driving a solution.
• What went well and what can be improved?
For more complex problems, a Kaizen Event will
• What are our goals for next week? be planned, using one of the reserved time-
• Do you need help? slots in the aligned agenda.

9.9 Improvement (or Kaizen) board Each improvement is evaluated by imagining

the business impact of its possible solution
All improvements identified by employees and the feasibility for the team to implement
are registered on the improvement board the solution. The weekly meeting allows the
and discussed and prioritized based on team to drive continuous improvement. In
achievability and impact during the weekly regular time-boxed windows throughout the
reflection meeting. However, having a visual week, the team can work on Kaizen events and
display of organizational goals, activities and drive impediments towards resolution. Typical
performance is not enough for success. The questions the team answers include:
visible presence of managers on the work floor,
• What problems have been identified on
their contribution to problem-solving and the the day and week boards?
consistent offering of help are key.
• What is the status of kaizen events?
The last board is the Kaizen or Improvement
• What are the results of implemented
Board. In this example of an improvement improvements?
board, the team has selected a variety of
columns that help them drive the appropriate Below is a figure in which the role of each
action to resolve identified problems. board and the relationship between the boards
are described.
On the improvement board, all problems
are listed. For each listed problem, the team

51
Both team and individual performance are
openly discussed. There is often a great deal
of initial resistance and “yes, but…” responses
to criticism. This is why management needs
to back up any criticism with real data. It is
important that the manager constantly clarifies
and directs change in order to make daily
improvements.

Managers and employees should hunt for

problems and find solutions together in
order to maintain the spirit of co-operation.
In this way, managers can actually steer the
organization in the direction desired.

52
10. Behavior and Attitude
We have discussed how people are the most a better way, only we do not know it yet.
important asset in the IT organization, based on Thinking counter-intuitively can lead to new
“best known ways” of doing work
their ability to bring skills and knowledge to the
workplace. Equally important is their attitude •• In the process of delivering value for people
towards the work and how they behave. who are prepared to buy your product and
by continuously removing waste from the
system producing the value, profit takes care
In this chapter, we will look at:
of itself
•• The Lean IT mindset •• Invest in people to create long term
•• The attitude and behavior that accompanies relationships. In IT, we also need to look at
this mindset how we develop long term relationships
with external service providers. They can
•• How management should lead the way
play a crucial role in the value delivered to
by example, setting goals and motivating
customers
employees
•• Being Lean in the long-term depends very
•• We will look at a concrete example of Lean
much on what you do in the next five
behavior: the empowerment of employees
minutes. If you behave in such a way as to
•• How to handle and overcome resistance by deliver value in the short term, the ability to
being persistent meet long term goals will be much easier. In
this way, we can sustainably deliver value
10.1 Lean Mindset •• Within organizations and IT organizations,
we have a tendency to look at our
As we have discussed numerous times so department or immediate surroundings. It
far, Lean is a way of thinking and acting. Lean is vital to look at the whole picture to avoid
behavior starts with Lean thinking followed sub-optimization. For IT this means at least
taking an integral view of a service towards
by Lean acting. The Lean mind-set has the
a customer
following characteristics:

•• It seeks perfection by acknowledging The behavior underlying these characteristics

that good is not an end state but a step is learning. People working within Lean IT
towards further improvement. Perfection is organizations distinguish themselves from
about delivering quality at the source. The other organizations by the fact that they are
eradication of waste through continuous prepared to learn and that their environment
improvement leads to the Lean principles of
encourages them to learn.
Flow and Perfection
•• In the same way, problems are seen as Let’s go one step deeper and take a look
opportunities to improve customer value,
at the attitude that contributes to a Lean
rather than a reason to apply blame
environment. We have seen the characteristics
•• Lean challenges people to think differently of a Lean mindset. But the mindset is nothing
in the process of delivering value. In Lean
without the right attitude.
organizations, people do not talk about the
procedure but the “best known way” of
Attitude is largely built up from the way we
doing something. This implies that there is
see the world and the beliefs that we have.

53
The beliefs of Lean are relatively universal These adjustments can only be made if learning
and can be summarized by the words of is turned into part of the daily routine within
Kiichiro Toyoda, founder of the Toyota Motor the Lean IT organization.
Corporation: “Do whatever you please. Just
take responsibility.” The essential difference between attitude and
behavior is that attitude determines the way
The following are beliefs that are consistent people approach the situations they meet and
with a Lean attitude: behavior is how they react, i.e. what they do
as a result for an occurrence. Behavior follows
• If we believe that improvement is possible,
it is a small step to take the responsibility to these beliefs in that people will go looking
make the improvement happen for waste, will treat people with respect and
share knowledge based on these attitude
• The vast majority of people come to work
to do the right thing, especially if it means characteristics. The figure below lists a non-
having a happy customer. Adding value is exhaustive list of Lean and non-Lean behaviors.
therefore a fundamental attitude to most
people
• One of the more difficult aspects of a Lean
attitude is to be critical AND to bring a
solution. Most people are capable of being
critical but forget to bring the solution

The last two beliefs are related to a positive

view of people: their ability to rise above
themselves and to work together to produce
better results than what an individual can do
Figure 7: Examples of Lean and non-Lean behavior
alone.

Fundamentally, when building a Lean IT We have seen that continuous improvement is a

organization, it is vital to help everyone fundamental goal of Lean. The most important
understand the attitudes that will help behavior associated with this goal is learning. Of
them and the team succeed. Attitude is all behaviors, the ability to learn at an individual
the foundation on which Lean behavior is and organizational level is the one behavior that
built. Toyota has built its entire behavioral truly discerns a Lean IT organization from a non-
construct on two basic principles: Continuous Lean IT organization.
Improvement and Respect for People.
10.2 Lean Transformation
We will look at continuous improvement
from a methodical perspective in the Kaizen What makes a Lean transformation a long-
chapter. However, it is important to understand term success? When an organization starts
the impact of continuous improvement in with Lean, the first improvement proposals
terms of behavior. Understanding that small are often evolutionary. These are often quite
concrete adjustments can make a considerable quickly identified and these quick wins are
difference from one day to the next is vital to swiftly implemented. At the start, the success
ensuring that these adjustments are made. of Lean is particularly visible. As time goes by

54
and many improvements are identified and implemented, it becomes more difficult to identify new
improvement opportunities. The low hanging fruit is taken (or “quick wins”). This leads to comments
such as “we’re finished with Lean; there’s nothing left to improve”. Generally, people forget that each
per cent improvement is an improvement. Organizations like Toyota do so well because they improve
each year with a two percent increase in productivity. Remember that Toyota is more than fifty years
down the road with Lean. That is a lot of improvement!

How do organizations succeed in integrating the Lean way of thinking into a long-term source of success
and truly adopt a continual improvement attitude? One of the key challenges is for Lean principles to
become an integral part of the paradigm used by managers for steering the organization. This means
that the consistent set of models and theories used as the thought framework (paradigm) to steer
reality must be enriched with Lean principles and methods. Lean, as part of the management paradigm
for IT organizations, means managing based on the results produced for the customer; is the customer
actually satisfied? The Lean transformation means a significant change in the way managers and
employees do their work. We all know how difficult it is to change our behavior!

Changing behavior and attitude is always related to people’s expectations of what the change will
bring them. Expectations follow a generic development when new working practices are introduced.
The figure below shows this generic development.

Figure 8: Chart showing how people’s expectations develop over time during a transformation

In every change, people’s expectations of the results start by moving from low to very high as they
see that the change can provide the improvements desired. Unfortunately, these improvements tend
to be the “low-hanging fruit”, leaving the more difficult improvements to be tackled.

Implementing Lean IT in an organization is not easy. When starting an implementation the benefits
of bringing focus on customer value and waste will bring benefits fast. There are examples where
throughput times were reduced by more than 30 percent in less than 5 weeks.

55
After the initial start, a Lean implementation As we saw earlier, Toyota’s Lean behavior is
gets more difficult. The tools are in place, and built on continuous improvement and respect
to let them really work, behavior has to be for people. It is important to consider problems
changed. ‘Traditional’ behavior must be stopped as opportunities to continuously improve.. This
and Lean behavior must become the habit. is a marked contrast to organizations where
Changing habits takes time and effort. As a the reaction to problems is to apportion blame.
result, some people get disheartened by the In the end, behavior in the Lean IT organization
hard work needed or start discussions about is all about doing things, rather than just talking
whether Lean IT is the right choice for the about them.
organization.
Respect for people is an altogether more
This despondency is known as the “Valley of difficult and less tangible concept. We have
Despair”. It is then the role of management already seen that apportioning blame is
to show constancy of purpose in seeking to counterproductive to continuous improvement;
remove waste from the IT organization and it is also not a very respectful thing to do.
provide more value to customers. This is the
way out of the Valley of Despair to more Respect starts by going to see what is actually
realistic expectations regarding what Lean happening on the work floor. You need to go
IT can deliver. Both individuals and teams and understand the situation yourself. The
go through this phase. When in the valley of real discussions about the work happen on the
despair, motivated Lean leaders and employees work floor, in front of the real situation, with
are needed to encourage the IT organization to the people who do the work. This does not
proceed. After this phase, reality sets in and a happen in the manager’s office.
real Lean IT team or organization is formed.
Lean IT is about adding value to customers,
For a more detailed discussion of the Lean IT creating flow, eliminating waste and continuous
transformation, please refer to the official Lean improvement. We have seen that a positive
IT Association Lean IT Leadership Publication. attitude towards people and working together
is necessary. In many IT organizations and
10.3 Lean Leadership teams, people talk about Lean IT but do not
really practice Lean. They have the right tools
Lean Leadership is much more than managing in place but they do not work as well as they
a Lean Transformation. Lean leadership is the could, mainly due to the associated behavior.
behavior and attitude necessary for a Lean Managers and employees create waste by
organization. Many managers are excited about exhibiting non-Lean behaviors. Negativity,
Lean and they want to "lead by example"( i.e. ego, criticism, gossip, cynicism and sarcasm
walk the walk and talk the talk). Often they are take away energy from working together and
able to apply Lean methods but do not know creating customer value.
exactly what Lean behavior means. The right
In Lean IT organizations, the role of managers
leadership behavior and day-to-day modelling
is different than that within traditional IT
are crucial for the long-term success of Lean
organizations. The role of management in
and continuous improvement.
a Lean IT organization is one of supportive

56
leadership. Traditionally, managers do the in the application of existing and new skills
thinking in meetings. They come up with and knowledge. This requires that leaders
answers and the employees just do what they self-develop to ensure that they are able to
coach and teach.
are told. Activities are carried out because that
is how they have always been carried out. Also, •• Giving strategic direction, setting goals and
there is an acceptance of errors as part of daily stimulating the constancy of purpose. It is
vital for all levels of management to work
work.
consistently, i.e. Lean management must be
implemented at all levels not just at team
Lean managers give their employees and teams (operational) level or strategic level.
direction, stimulate them to improve their value
by asking questions, giving them support to A good example of Lean leadership is illustrated
take responsibility for their own work and that by the chairman of Toyota, Fujio Cho. He is able
of the team. Lean IT leaders also know the to focus on performance objectives without
value of eliminating defects. They know that losing an honest interest in people. He spent
the customer value goes up and the costs go time on the shop floor to motivate his people to
down as they stimulate quality at the source. build better products, using 3 steps:

Being a Lean Leader requires some concrete 1. Go See: observe what is going on (Go to the
actions such as: Gemba; carry out a Gemba Walk),

•• Not spending time in meetings. Lean 2. Ask Why: Ask questions why things are
management means showing true interest done a certain way looking for ways to
in how employees execute their tasks. This improve quality and customer value,
can only be done by seeing it with your own
eyes, and being present on the work floor. 3. Show Respect: Listen to the answers of
people working daily with processes and
•• Using their time on the work floor to products and show respect for their work
stimulate and inspire employees through and ideas.
dialogue and by setting challenging
expectations. This is done both at an The hardest part of a Lean IT transformation
individual level and at a team level.
is to walk the talk. Really having your focus on
•• People need to understand that their work Lean attitudes and behaviors; being a real Lean
makes a difference and it is needed to leader and an example for the organization.
achieve the goals of the organization, and
And by doing so motivating others to become
helping customers to achieve their goals. It is
different from just doing your work. Lean … this takes time and attention.

•• Taking responsibility. It is vital to build For a more detailed description of Lean IT

systems and processes that cascade
Leadership, please refer to the official Lean IT
responsibility so that people are able to
make a difference. The Cascade we saw in Association Lean IT Leadership Publication.
the Organization chapter ensures that help
is given by the right level of management. 10.4 Jidoka
Leaders must take responsibility for ensuring
problems are identified and solved. We have seen that Lean leadership is about
•• One of the most positive ways of influencing stimulating and motivating employees and
people is by coaching and teaching them managers to create customer value and

57
continuous improvement. That is why a
Lean organization has a different focus than
traditional organizations. The focus of a Lean
organization is on the frontline employees
creating value for the customers. Employees
are empowered to operate effectively.
Employees are made responsible for the quality
and value of their work. Ideas and ongoing
development and improvement of employees
is also important.

A clear way in which this empowerment is

stimulated is Jidoka, the concept we introduced
through Visual Management. Jidoka is one
of the two pillars of the Toyota Production
System, along with just-in-time production.
Jidoka highlights the causes of problems
because work is stopped immediately
when a problem is uncovered. This leads to
improvements in the processes that build
in quality by eliminating the root causes of
defects. With Jidoka, employees are asked
to take responsibility for stopping the line
to ensure there is quality at the source. The
expectation is that everyone is responsible for
quality at the source.

A central concept within Jidoka is the Andon

Cord. This is a physical cord that employees can
pull to stop the production line. The Andon cord
is pulled some 3,500 times per day in a typical
Toyota manufacturing plant. The question is:
what are the Andon Cords within the Lean IT
organization?

Certainly, with regard to changes, the Change

Advisory board meeting must act as an Andon
cord, stopping changes that will introduce
new errors into the IT infrastructure from
progressing in the process.

58
11. Kaizen
In this chapter, we will investigate how to put 11.1 Continuous Improvement
continuous improvement into practice using a
structured problem-solving method. The main objectives for improving the
performance of IT are:
Kaizen is the Japanese word for continuous
improvement using small, incremental changes. 1. To deliver value better: better quality of
service; easier to use by identifying and
It translates as change for the better. When
removing the causes of incidents and
applied to the workplace Kaizen means
minimizing variation in the delivery of
continuous improvement involving everyone, services
managers and workers alike, every day,
providing structure to process improvement. 2. To deliver value faster: faster time to
market and innovation, earlier customer
Most importantly, the Lean paradigm calls for feedback to drive further improvements,
improve competitive advantage of
the dual focus of doing the work and improving
customers of IT
the work every day in parallel to incrementally
increasing overall business performance. The 3. To supply services cheaper: to increase
preference for gradual change stems from the profitability through lower costs of IT
fact that smaller gradual changes are easier to services.
incorporate to the way of working.
4. To create more meaning in our work: pride
of workmanship; motivate, and retain the
We identify two types of Kaizen: Daily Kaizen best employees, create a safe environment
and Improvement Kaizen. Daily Kaizen
focuses on carrying out small improvements 5. To leave a healthier environmental
on a daily basis that are aimed at making footprint: responsibility to society, next
generations, and all life on the planet
work simpler, quicker or more pleasant. For
a more detailed discussion of Daily Kaizen, There is always a trade-off decision. In order
please refer to the Lean IT Association to maximize our effectiveness, we need to be
Lean IT Kaizen and Lean IT Leadership aware of the consequences of our balancing
Publications. Generally, the problems solved act between the five basic objectives. Lean, in
are uncomplicated, but cause waste in the essence, encourages us to continually strive to
value stream. Improvement Kaizen deals with improve performance.
larger problems for which more research
needs to be done. Improvement Kaizen is Kaizen Events are used for intensive projects
carried out in Kaizen Events. where employees are taken away from their
regular jobs for a focused improvement
First, we will discuss what the intent is of initiative. Kaizen teams are a key part of
improving business performance and doing it any Lean initiative. The team gets engaged
continually. Next, we will discuss Kaizen Events in a Kaizen event or rapid improvement
and Kaizen Teams. workshop.

59
The event is a powerful engine for change as a few days, preparation can take place over
cross-functional teams of people with deep several weeks prior to the activity.
and distinct process knowledge are brought
together for a highly focused period to analyze If you are going to do a Kaizen Event and want
their processes and realize improvements. to assemble a team, you first need a problem
Kaizen events may also be used as an action- to solve or an opportunity to take advantage of.
oriented method to systematically deploy There are three basic qualifications for a Kaizen
the organization’s strategy; they have the Event to take place:
greatest impact when they are linked to an
1. There is gap between current and desired
organization’s overall strategic direction.
performance
The Kaizen team is a cross-functional group 2. The cause of the problem is not clearly
of people, (often 3 to 7) working together to understood
implement meaningful improvements to a value
stream. The Kaizen team uses the creativity 3. The solution is not predetermined nor is
the optimal solution apparent
of people working in the value stream,
independent of place in the organization,
11.3 Selecting a subject for a Kaizen event
to take a fresh objective look at current
performance and the value that is actually
Good Kaizen event selection can be a key to
desired by customers. Kaizen teams tend
early success. The selection results in a Kaizen
to use visual observations and simple data
event rationale which serves as a starting point
gathering tools to identify and drive waste out
for the Kaizen team, and includes a description
of processes.
of the issue or concern, the focus of the Kaizen
event, a broad goal or type of results to be
11.2 Kaizen Event achieved and an overview of the value of the
effort.
While everything should be questioned and
anything could be improved, only a few key Deciding on which of the best candidate Kaizens
things are important to improve at any given to implement first and allocate resources to,
time. Generally, if a project is important, the involves a strategic decision about what is most
organization has an easier time providing important to the customers and the company,
appropriate resources to work on the project. and a check on feasibility. The best Kaizen
Unfortunately, resources are not unlimited. So selection is based on identifying the ones that
on most projects, there are some things that best align with the organization’s current needs,
cannot be changed at that point in time. capabilities and objectives. Target areas are
usually identified by looking at three categories
Typical exclusions from Kaizen Events include:
to answer the question whether the initiative
Large capital expenditures, adding people to
is meaningful and manageable: Results for the
processes, spending more than 3-5 days on one
customer or business benefits, feasibility and
event. Kaizen is a low-cost solution. Projects are
organizational impact
usually broken into smaller parts to maintain
focus and deliver improvements as quickly as The rationale strikes a balance between giving
possible. Although the Kaizen event lasts for clear guidelines to a team on Kaizen event

60
direction and expectations, while not overly understands the problem but who is less
narrowing options or dictating solutions. familiar with the value stream may contribute
Ensuring support and buy-in for the Kaizens largely by asking insightful questions and
you select means providing a good rationale forcing other team members to really clarify
for your priorities. Common results that can be the issue at hand or the logic of a solution. The
achieved include: Kaizen Leader and Kaizen Sponsor remain the
same throughout the event. Ideally, Kaizen
•• Throughput time reduction of 50%
Team Members are chosen based on the
•• Productivity improvement of 25%
following criteria:
•• Work in progress reduction of 40%
•• Who has the best knowledge of the process
•• Defect reduction of 80% being improved and/or contact with the
customer?
11.4 Roles in a Kaizen Event •• Who has the most knowledge about the
problem, and/or the best access to data?
Kaizen Events demand certain roles are present
•• What key skills or perspectives will be
on the team: needed throughout the course of the Kaizen
•• Kaizen Sponsor. The sponsor is responsible event and who has these?
for selecting the initiative, facilitating the •• What groups of functions will be most
selection of a team, deciding on resources directly affected by the project and who will
required, sponsoring the team towards represent?
achieving success, removing roadblocks for
the team and reviewing the event.
11.5 Running a Kaizen Event
•• Kaizen Leader. The leader clarifies the Kaizen
rationale with the sponsor, develops a Kaizen Kaizen events follow three stages: Preparing
charter, selects and supports the team
for the Kaizen event, the Kaizen event itself,
members, maintains the Kaizen approach
closing the event and follow-up activity.
and schedule, supports the transfer of new
solutions to ongoing operations and helps
the team towards success by providing Preparing for a Kaizen event is almost
the skills, knowledge, and tools to achieve more important than the event itself. Poor
meaningful improvement. preparation strongly relates to whether or not
•• Kaizen Team Member. Team members the event will drive successful outcome.
provide brains and muscle behind the
problem definition, measurement, analysis, Before the Kaizen Event takes place, typical
and improvement of a process. activities are:

It is acceptable to adjust the members of the •• The Kaizen Sponsor clearly defines the
Kaizen rationale
Kaizen team over the course of the event,
especially in the transition from developing •• Select the Kaizen Leader
solutions to implementing them, as long as •• Select the Kaizen Team Members (people
it does not disrupt the cohesiveness of the who are intimately acquainted with the
group. Different skills and talents often are problem to be investigated) and complete
needed to make process improvements work logistics planning (schedule event, meeting
area, workshop materials). Arrange for a
successfully. Often, a team member who
meet and greet with all participants

61
• Arrange for coverage during participants’ After the Kaizen Event, the improvements
absence from their workplace and/or during that were made during the Kaizen need to be
disruptions sustained and further cycles of improvement
• Assemble background information and need to be initiated. A verification that the
draft the Kaizen charter. This document sets claimed cost savings are real may be a key
objectives and scope for the event, targets success factor for future Kaizens. Just as
for improvement, process start and end
important as the actual physical results from
points, and lists all participants and their
the event is the way people have developed
roles
and grown as leaders as a result of their
• Perform a Lean assessment of the area
participation in a Kaizen event.
and gather data on process attributes such
as takt time, cycle time, staff numbers,
overtime, process flows, demand data, 11.6 A3
backlog data and current standard operating
procedures Information is generated throughout the Kaizen
• Select and prepare the appropriate Lean event. A highly effective way of capturing and
training materials (as required by the event presenting this information is by using the
objectives and train the team upfront in the A3 Method. This is a method for structured
probable methods and tools that will be problem-solving in which the Kaizen team is
utilized during the event if required)
challenged by the scarcity of space (an A3-sized
During the Kaizen Event, the Kaizen team piece of paper) to record the key elements
should follow a disciplined methodology to of the Kaizen event concisely and succinctly.
go from a problem to implemented solution. The aim is to facilitate the communication
For the purpose of process improvement, of improvements to others within the
we recommend DMAIC as a five-phase organization.
improvement cycle:

• Define: clarify the problem and break it

down if needed, define requirements, set
target and objective
• Measure: validate the process, refine the
problem, measure inputs, key steps and
outcomes
• Analyze: develop cause and effect
relationships, identify the vital few root
causes, validate hypotheses
• Improve: develop ideas to remove root
causes, test solutions, standardize solutions
and measure results Figure 9: Example of an A3 template

• Control: establish standard operating

procedures to communicate the way of We will now take a closer look on the Five
working and maintain performance, correct Phases in the Improvement cycle: Define,
problems as needed, present result to the Measure, Analyze, Improve, and Control.
sponsor, and start the next iteration

62
11.7 Define communication towards stakeholders
on one A3 and use an updated version
The starting point is the problem description. to visualize their problem solving effort.
The complication is that the early definition This way, the team limits itself to the
essentials, also making it easier for others
may sometimes be focusing on a symptom
to understand what they are trying to
rather than on the key-issue. The challenge is solve. Next to a general identification of
to find the key issue. Remember that the initial the Kaizen, we describe the problem, the
attempt to formulate the problem may not be background, the current condition, the
exactly right and might need to be revisited target condition, the countermeasures,
throughout the Kaizen event. Working with the plan to implement them and possible
DMAIC is an iterative exercise. follow-up actions. The relevant elements
should be captured on the A3;
The problem statement details when the 2. Documentation showing what customers
problem has been identified, what the problem are affected by this Kaizen and what their
is, what its magnitude is, and its impact or needs are;
consequence. The problem statement does not
3. A map of the process that captures the
go into possible causes or solutions.
boundaries and scope of the process to be
improved (SIPOC). This map helps the team
Once the problem is clarified, it is often broken to verify what the inputs of the process
down in its contributing parts. It’s important are and if they match the outputs of the
to keep focusing on customer-centric values. supplying upstream process, and what
Put the customer first in your problem solving the process outputs are and if they match
activity. If you have a hard time defining the expectations of the customers of the
a problem, looking at a process area from downstream process;
a Muri, Mura or Muda perspective will be 4. Rules of engagement of the team and an
helpful. Where is the overburden, where is understanding of their way of working
the variation, and where is the waste? In this throughout the rest of the event
regard, it is important to note that waste is
always a symptom of a problem and not the 11.8 Measure
problem itself.
In the Measure Phase, the Kaizen team
The purpose of the define phase is to have the provides factual evidence that a problem
team and the sponsor reach agreement on the or an opportunity actually exists. The
scope, goals, and financial and performance starting point is the question: “What is our
targets for the Kaizen event. performance?” Most of the Kaizen team’s
metrics tend to be process-centric and time-
The results of the Define phase consists of four oriented. Process times should be captured
deliverables: for each step of the process. This is the actual
elapsed time for each step in the process and
1. A completed Kaizen charter covering the
it includes:
problem statement, business impact, goal
statement(s), scope, defined team which is •• Lead Time: is the total elapsed time between
presented to the sponsor and stakeholders. the customer placing an order and the
The team should try to capture their delivery of the product or service.

63
•• Cycle Time: is the time per unit of work in the •• An updated Kaizen charter or A3 which is
value stream or total cycle time is the time presented to the Kaizen sponsor
from start of the value stream to its conclusion.
Cycle time is impacted by wait or setup time 11.9 Analyze
as well as the capacity and throughput at the
limiting work station, constraint or bottleneck
The Analyze Phase is where the team
in the process. A key element to remember is
that the process cannot produce faster than determines the key improvement
the limiting work station or constraint. opportunities. Analysis builds on the work
started in the Define and Measure phases. At
•• Machine Time: for the automated portion of
the process this stage, teams should not try to justify or
improve, but merely capture the ideas and
•• Queue Time: time while materials of
use their best judgment to describe potential
information wait in queues
opportunities. Every process step does not
The Kaizen team should visually display their need to have improvement potential. The
measurement results using histograms, Pareto team should focus on those where meaningful
diagrams and other simple data displays. Once improvement exists. Value added steps
the information gathered looks useful for typically change the form, fit, function, or
analysis and decision making purposes, the information content of the IT service, and
team is ready to move on to the next phase. these steps tangibly contribute value in the
customer’s eyes. Non-value adding steps are
It is possible in this phase that quick win waste, all of which should be targeted for
improvements are identified. During the potential elimination, if possible.
Measure phase, the first concrete insights are
gained into the nature of the problem. It may From an analysis standpoint, the Kaizen team
be that certain necessary, easy-to-implement is seeking to balance the rate of production
improvements related to this problem to the customer’s rate of demand in order to
statement are very clear. These should be establish flow. Bottlenecks and constraints
implemented as soon as possible, preferably in the process have a negative impact on the
before moving on to the Analyze phase. process throughput and possibly the ability of
the process to meet demand.
The purpose of the Measure phase is to
thoroughly understand the current state of the The observed effects all have a cause. Drilling
process and collect reliable data on process deep to the root cause is often supported by
speed, quality, and costs that you will use to the “5 Why” technique, to prevent the team
expose the underlying causes of problems. from being satisfied with superficial answers
Therefore, the deliverables of this phase are: that won’t fix the problem in the long run. It is
the team’s challenge to identify the root cause
•• A Value Stream Map that displays baseline
of process effects and define which will be
measures on time, quality, and cost. The map
should show the main process steps relevant targeted for improvement in the next phase.
to the project scope, customer demand rate, The team answers 4 questions:
and cycle times for those steps. Supplier and
customer loops need to be clearly identified 1. What are the causes?
and input and output clearly understood by 2. What are the effects?
the team

64
 3. What is the relationship between solution that will be presented to the Kaizen
causes and effects? sponsor. The team could take each solution,
4. How important is each cause regarding one at a time, and determine what current
the problem? business conditions would be obstacles
Often, the causes and effects are visualized in to implementation versus what would be
an Ishikawa or Fishbone diagram to provide beneficial to the implementation. The solutions
structure in the team effort uncovering cause are prioritized by assessing the impact and
and effect relationships. The diagram is also feasibility of each opportunity. Each solution
to ensure a balanced list of ideas has been could also be compared by ranking them
generated during brainstorming or that major against the others, to help clarify priorities and
possible causes are not overlooked. give structure to making decisions in the team.

The purpose of the analyze phase is to pinpoint However, finding a good solution is not
and verify causes affecting the key input and enough. A solid cost/benefit analysis, and the
output variables tied to the goals of the Kaizen. presentation to the sponsor are important
The primary deliverables typically include a list to convince others in the organization. Often,
of improvement opportunities, data analysis the precise value of the financial impact is
that describes a ‘before’ and proposed ‘after’ not known, and neither are the direct and
state, identification of the problem’s root indirect costs. For example, at times it may
causes and their priority. An updated Kaizen be difficult to determine how an anticipated
charter or A3 should, again, be presented to the improvement in customer satisfaction of a
Kaizen sponsor. given item will translate into financial benefits.
In these cases, a range of values can be used,
of what can be reasonable expected. This
11.10 Improve
analysis attempts to understand the total range
of variation associated with the ‘most likely’
In the Improve Phase, the team has validated
situations. By displaying the total range of
the causes of the problems in the process
variation, the decision-maker is more equipped
and is ready to generate a list of solutions for
to understand the risks associated with the
consideration. They will answer the question
proposed solution. This way, even if the benefit
“What needs to be done?” As the team moves
cannot be quantified, it is still made visible in
into this phase, the emphasis goes from
the decision-making process. By running a
analytical to creative. The first task in this
pilot implementation, the team reduces risk of
phase is to develop ideas for improving the
failure and tests the validity of the solution,
process. Often, ideas are generated by use of
even though running a pilot causes a delay to
brainstorming. Ideas can also be generated
full scale implementation and realization of
using other tools. For every situation, people
benefits.
have assumptions about what can or cannot be
done. Reversing the assumption, or modifying
The purpose of the improve phase is to
it, may help the team think of new ways to do
learn from pilots of the selected solutions
the process.
and execute a full-scale implementation. The
primary deliverables typically include an
After a list of solutions has been developed,
evaluation, selection and optimization of the
the team will need to select the desired

65
best solution, the execution of a pilot and full- taking the lessons learned from the team
scale implementation plan and, as a result, an and applying those good ideas and solutions
improved process that is stable, predictable to other processes. The team should
and meets customer requirements. Again, consider standardization and replication
the updated Kaizen charter or A3 should be opportunities to significantly increase
presented to the Kaizen sponsor. the impact on the business to far exceed
anticipated results by the pilot and solution
11.11 Control implementation.

In the Control Phase, the emphasis is on a Ensuring that people use new ways of
successful implementation and maintaining working is always difficult. Lean includes
the gains achieved. The question the the concept of Poka Yoke. This is all about
team is trying to answer is, “How can we making it impossible to make mistakes.
guarantee performance and ensure that the Literally, Poka Yoke means to prevent
improvement is sustainable?” The team needs unintended mistakes. Examples are
to ensure that the success they have seen designing processes or products so that
from the Improve Phase will continue. This there is only one, preferably easy, way
includes transferring the responsibilities to the to use the process or product. For each
process owner, for instance by leaving tools solution that we aim to implement we must
and knowledge to help the owner manage the ask ourselves whether it is poka yoke.
process after the team has gone. Tools help
When the Kaizen event is officially over, a team
monitor and control the process and they
evaluation may be done to assess how each
need to be institutionalized. The team created
individual did as a team member. Management
‘as-is’ performance measures in the Define
may devise rewards to recognize the work
phase. In the final phases of the Kaizen event,
of the team, and the team may share the
these measures need to be updated and they
knowledge gained with others.
should indicate the effect of the implemented
solution in the target area.
The purpose of the Control phase is to
complete Kaizen work and hand off the
Often, a new way of working will help
improved process to its owner, with procedures
sustain the implemented solution. The team
for maintaining the gains. The primary
should capture this in a Standard Operating
deliverables typically include the before and
Procedure, preferably created together with
after data on process metrics, operational
the people responsible for working in that
training on Standard Operating Procedures and
area.
a completed Kaizen charter, including lessons
One of the powerful aspects of running learned and recommendations for further
Kaizens in an organization is to take opportunities.
successful implementations and expand
them across the entire organization.
Replication is taking the solution from the
team and applying it to the same type or a
similar type of process. Standardization is

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11.12 Kaizen Tools

A variety of tools can be useful to the Kaizen team:

1. The Kaizen Charter / A3 Visualization: Next to a general identification of the Kaizen, the team,
and the process area, its content is: the problem, the background, the current condition, the
target condition, the countermeasures, the plan to implement them and possible follow-up
actions. This tool is used throughout the Kaizen event to record the results.

2. The Pareto Diagram: A type of chart that contains both bars and a line graph, where the
cumulative total is represented by the line. The purpose of the Pareto chart is to highlight the
most important root causes of the problem among a (typically large) set of factors. This tool is
mainly used in the Analyze phase.

3. The Value Stream Map: A method for analyzing the current state and future state for the series
of events that take a product or service from its beginning through to the customer. Key metrics
associated with value stream mapping are value adding times and no value adding times. The
VSM is developed in the Analyze phase.

4. The 5 Why Technique: An iterative question-asking technique used to explore the cause-and-
effect relationships underlying a particular problem, used in the Analyze phase. The primary goal
of the technique is to determine the root cause of a defect or problem

5. The Fishbone or Ishikawa Diagram: A type of relationship diagram that shows the causes of a
specific event usually grouped into major categories to identify sources of variation. Categories
most commonly used in Lean IT are People, Process, Policy and Technology. This tool is mainly
used in the Analyze phase.

6. The Solution Matrix; A matrix, used in the Improve phase, in which solutions are plotted after an
impact and feasibility analysis, to visually demonstrate which solution should be pursued with
the highest priority.

11.13 Kaizen Pitfalls

Experienced Kaizen leaders have identified the key factors for running a successful Kaizen and the
common pitfalls to avoid. We will discuss these briefly.

Common pitfalls and the associated steps to rectify the situation are:

Phase Pitfall Countermeasures for pitfall

Define Too much detail in the Strive to cover about 80% of all possibilities
process map

The scope is too big Use data and a refined SIPOC to re-scope; use a
Pareto chart to identify and select the biggest cause
of the problem

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 Measure Too much data Use the cause and effect diagram to find the data
that should be analyzed

The measurement system Study the process to better understand it and to

is not valid design a collection plan that result in representative
data points

Analyze The assumptions were not Verify assumptions with a variety of stakeholders
checked

Jumping to conclusions The team should always use a selection of

appropriate graphic tools to endorse its analysis

Improve A preferred solution is Use a structured decision-making technique to select

pushed the best quantified solution that all team members
can support

The impact of the change Give proper attention to communicating the solution
on people in the process is to all stakeholders by relating to all interests and
underestimated objections

Control Early finish The team needs to define tools to monitor the
process and appropriate actions to be taken

Poor benefit realization The team should always consider opportunities for
replication and standardization by use of Standard
Operating Procedures

The DMAIC methodology is a powerful five-phase approach to addressing a process that needs
improvement. The keys to having a successful Kaizen Event are:

•• Establishing that the project is a business priority

•• Understanding the true requirements for the process
•• Using data to tell the story
•• Picking the right tool for the right situation
•• Communicating the Kaizen goals, accomplishments and successes
•• Building credibility and support for the Kaizen

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Literature
Lean Thinking, James P. Womack and Daniel T. Jones, Simon and Schuster, 1996

The Lean Toolbox for Service Systems, John Bicheno, PICSIE books, 2008

Creating a Lean Culture, David Mann, CRC Press, 2010

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Glossary
Term Description

Agility Increasing agility means being more able to adapt to customer

value requirements

Andon Literally, this is a signal. An Andon System or Cord is one of

the principal elements of the Jidoka quality-control method
pioneered by Toyota as part of the Toyota Production System
and now part of Lean. It gives the worker the ability, and
empowerment, to stop production when a defect is found, and
immediately call for assistance

Batch and Queue A Push production model where products are created before
customer demand and in a certain quantity at production cycle.
After production the products are stored (queued) in stock until
the customers demand is received.

Behavior and Attitude The way people think and act.

Cause and Effect Diagram See Fishbone diagram.

Change Over Time Time needed to reconfigure a machine between two different
products

Common cause variation Sources of variation in a process that are inherent to the
process, also referred to as noise.

Continuous Improvement Ongoing process in an organization with the objective to find,

resolve and share solutions to problems. The objective is achieve
perfection, in other words to improve value streams, product
and customer value. A philosophy of frequently reviewing
processes, identifying opportunities for improvement, and
implementing changes to get closer to perfection.

Cost of Poor Quality The price you have to pay for poor quality products or services.
For example claims, fines and loss of customer confidence.

Critical to Quality Critical to Quality is an attribute of a part, assembly, sub-

assembly, product, or process that is literally critical to quality or,
more precisely, has a direct and significant impact on its actual
or perceived quality.

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Customer The person or group of people who buys, uses or derives value
from your product or service OR the person next in line in the
value stream. The person ‘next in line’ is sometimes referred to
as a ‘partner in the value stream’, or an ‘internal’ customer.

Customer Value A capability provided to a customer at the right time at an

appropriate price, as defined by the customer. The more a
product or service meets a customer’s needs in terms of
affordability, availability and utility, the greater value it has. Thus,
a product with true value will enable, or provide the capability
for, the customer to accomplish his objective.

Cycle Time Cycle Time is the time we actually spend on creating the product
or service. This includes all time spent on VA, NVA and NNVA
activities executed while producing the product or service.

Day board A board used to share information and updates within the
team focused on identifying short term priorities, blockages
and dependencies. The Day board is used during the Day
start meeting and is a key element and enabler of Lean Visual
Management

Defect Output of a process that does not meet requirements. For

example a product that does not function as specified. Defects
generate rework.

DMAIC Acronym for the five steps in problem solving with Kaizen, i.e.:
Define, Measure, Analyze, Improve and Control.

Failure Demand Demand from the customer based on a failure of the IT service
as opposed to a request for value, e.g. findings from an
acceptance test or resolving an incident

Failure Stream A sequence of activities triggered by a customer as a result of

failure in the product/service, aiming to resolve a defect, or to
provide information on how to best use the system. Opposite
of a value stream. A failure stream does not add value to the
customer. For example, resolving an IT incident.

First in First Out (FIFO) Work is processed on a’ first come, first served’ approach.

Fishbone diagram The fishbone diagram identifies many possible causes for an
problem. It can be used to structure a brainstorming session.
Also known as an Ishikawa diagram

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 Five “Whys.” A root-cause analysis tool used to identify the true root cause
of a problem. The question “why” is asked a sufficient number
of times to find the fundamental reason for the problem. Once
that cause is identified, an appropriate countermeasure can be
designed and implemented in order to eliminate re-occurrence.

Flow The smooth, uninterrupted movement of a product or service

through a series of process steps. In true flow, the work product
(information, paperwork, material, etc.) passing through the
series of steps never stops.

Gemba The place where the work is done. Within a lean context, Gemba
simply refers to the location where value is created

Gemba Walk Go to the place where the work is done with the intention of
understanding what is actually happening there. The opposite is
a Gallery Walk, in which management walks around but does not
take time to understand problems.

Improvement Board Board that presents current problems and the follow-up to
resolving or addressing that problem (also Kaizen Board); an
element of Visual Management

Inflexibility Inability to meet customer demand with a certain resource. For

example, you have sufficient employees but they do not have
the right skills to work on the current customer demand.

Input IThe resources used or transformed by a process; also known as

the Xs or the input variables.

Inventory All components, work in process, and finished products not

being processed but stored and waiting.

Ishikawa diagram See Fishbone diagram.

IT Outcome The delivery of IT products or services to the business

(customer).

Jidoka Japanese word for autonomation, which aims to prevent the

production of defective products or services.

Just-in-time A system for producing and delivering the right items at the
right time in the right amounts, so that inventories are kept to a
minimum.

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Kaikaku Japanese for "radical change" is a business concept concerned
with making fundamental, transformational and radical changes
to a production system, unlike Kaizen which is focused on
incremental minor changes.

Kaizen An improvement philosophy in which continuous incremental

improvement occurs over a sustained period of time, creating
more value and less waste, resulting in increased speed,
lower costs and improved quality. When applied to a business
enterprise, it refers to ongoing improvement involving the entire
workforce including senior leadership, middle management and
frontline workers. Kaizen is also a philosophy that assumes
that our way of life (working, social or personal) deserves to be
constantly improved.

Kaizen board See Improvement board

Kanban Literally, a signal. Kanban is a scheduling system for lean and

just-in-time (JIT) production. Kanban is the embodiment of the
pull/replenishment system (see Pull)

Kanban Board A Kanban board is a workflow visualization tool that enables

team collaboration focused on monitoring the flow of work.
Physical Kanban boards often use simple work records like
sticky notes on a whiteboard to communicate status, progress,
and issues.

KPI Key Performance Indicator, a measure indicating a key

performance metric of a process, condition or state. A KPI
should be in line with the strategy, long lasting, and consistent in
the cascade from top to operational level.

Last in First Out (LIFO) Work is processed in a ‘last arrived, first handled’ approach.

Lead Time The time needed between the customer placing the order and
the product or service delivery.

Machine Time The time a machine is working on a product.

Metric A measurable characteristic of a variable that is regarded a

performance indicator.

Motion People or equipment moving or walking more than is required to

perform the processing.

Muda Japanese word for waste. See Non-value-added and Waste.

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 Mura Japanese word meaning unevenness; irregularity; lack of
uniformity; variation

Muri Japanese word meaning overburdened, unreasonableness;

excessiveness. Often related to policy-based waste

Necessary non-value-added Activities that add no value from the customer’s perspective but
are required in order to operate the business. This could include
legal and regulatory requirements as well as certain internal
business processes which would put the business at risk if
eliminated in today’s environment.

Non-value-added Activities that add no value from the customer’s perspective nor
are they necessary to properly run the business. These activities
are often legacy in nature (“we’ve always done it that way”).

Organization Lean IT is structured in five dimensions. Organization is the

dimension that covers all aspects related to the way the
company is structured.

Output Products or services created as a result of a value stream or

process.

Overburden See Muri

Over Processing Type of waste. It means doing the work better than requested
by the customers. Also referred to as gold-plating.

Over Production Type of waste. It means producing more than requested by the
customer.

Parallel Lines Number of lines of production that can operate in parallel. For
example 3 cashiers in a supermarket handling customers at the
same time.

Pareto diagram Bar chart showing the causes of problem or condition order
from large to small contribution. Effective tool to show what the
big contributors to the problem are.

Perfection A key objective of Lean to bring a product or service into a state

where the number of defects is zero or as close as possible to
zero. Relates to continual improvement.

Performance Performance is the ability to achieve defined goals in time,

related to customer value.

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Performance Dialogue Conversation between to two people in which three topics
are discussed: defining objectives, offering support and giving
feedback on achieved results. For example a Performance
Dialogue between manager and employee. Also, a meeting at
the Day Board or Week Board is also a performance dialogue.

Poka Yoke Literally, to prevent an unintentional error, this is a concept

aimed at ensure that activities can only be done in one way, the
right way; foolproofing an activity

Problem Board See Improvement board.

Process A series of actions that must be performed correctly in the

correct sequence at the correct time to create value for a
customer.

Process Cycle Efficiency A measure of overall process health focused on the percentage
of value-add time (work that changes the form, fit or function
as desired by the customer) divided by process lead time. PCE =
Value Add Time / Process Lead Time. PCE is an indication of how
efficiently the process is converting units of work to process
outcomes.

Process Throughput The number (volume) of products or services that a process can
produce within a timeframe.

Process Throughput Analysis A tool to perform a process analysis with the objective of
calculating process output, e.g. process throughput and
constraints. Used to improve the capacity of a process.

Pull A system of cascading production and delivery instructions from

downstream to upstream activities in which nothing is produced
by the upstream supplier until the downstream customer signals
a need.

Push Push Production. A system where an upstream process

produces as much as it can without regard to the actual
requirements of the next process and sends them to the next
process whether they have capacity to begin work or not. Push
Production typically results in queues of work building up, which
result in delays.

Re-work Activities required to fix defects of a product or service

produced by a process to meet the requirements

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 Root cause analysis Studying the fundamental causes of a problem, as opposed to
analyzing symptoms.

Skills and Knowledge matrix Skills and Knowledge matrix is used to steer team development
to meet skills demand. The objective is that team skills are
aligned with the customer demand for those skills.

Standard time Estimated time within which a specific process or process step
can be executed, e.g. we should be able to complete receive
and record an incident in 10 minutes. The average time may, in
practice, be higher or lower.

Takt Time The pace at which work must be completed to meet customer
demand. Takt, a German word meaning pace, is the heartbeat
of any Lean system. Process Time divided by Takt Time yields
the number of workers required to support a specific product.
To calculate, divide the available work time by the customer
demand for that period. For example, if a call center receives
900 calls per shift, and there are 27,000 seconds of available
work time, the takt time is 30 seconds per call. Therefore, one
call must be completed every 30 seconds to meet customer
demand.

Transportation Movement of products in a factory. It is a type of waste if

products are transported more the strictly needed.

Trend A gradual, systematic change of a metric over time

Unit of Work Describes the unit (the thing) that goes through the process, for
example incidents, cars, designs etc.

Value Stream A value stream is a set of specific actions to create a product

or service. The specific activities required to design, order, and
provide a specific product or service from the point of product
(or service) concept, through launch, ordering raw materials,
production and placing the product (or service) in the hands
of the customer. From a shareholder’s perspective, the Value
Stream could also include the steps and time required until the
receipt of revenue.

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Value Stream Mapping (VSM) A technique used to analyses the flow of materials and
information currently required to bring a product or service to
a consumer. A visual representation of all of the process steps
(both value-added and non-value-added) required to transform
a customer requirement into a delivered good or service. A VSM
shows the connection between information flow and product
flow, as well as the major process blocks and barriers to flow.
VSMs are used to document current state conditions as well
as design a future state. One of the key objectives of Value
Stream Mapping is to identify non-value adding activities for
elimination. Value Stream Maps, along with the Value Stream
Implementation Plan are strategic tools used to help identify,
prioritize and communicate continuous improvement activities.

Value-add Activities that add value in the eyes of the customer. The
customer is willing to pay for this work.

Variability Variation in the output of a process in quality and demand

volume. Fluctuation in cost, quality or throughput time in the
delivery of value. See also Mura

Visual Management Visual management concerns the use of displays, metrics and
controls to help establish and maintain continuous flow, and
giving everyone a view of the work along the value stream.
Its aim is to ensure transparency and understanding of the
situation.

Voice of the Business (VOB) Defines the needs and requirements of the most important
stakeholders from the organization, for example market share,
growth and profitability.

Voice of the Customer (VOC) Term to describe the in-depth process of capturing a customer's
expectations, preferences and aversions with the objective to
create products or services that that meet the customer’s needs
and preferences.

Voice of the Process (VOP) Defines the needs and requirements of the processes

Voice of the Regulator (VOR) Defines the needs and requirements of the external regulator

Waiting Time Waiting for the next production step to begin.

Waste Any activity that consumes resources but does not provide
value as defined by the customer. Also referred to as Muda or
Non-value-adding activities.

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 Week board Board used to share information about the team’s performance
over the previous week, and objectives for the coming week; an
element of Visual Management

Work in Progress (WIP) Number of items worked on (in progress) in the process.

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Authors

Niels Loader

As advisor to many IT organizations, Niels has extensive knowledge and experience in implementing
IT Service Management, IT Performance Management, Lean IT and DevOps within IT organizations.
He was one of the initiators of the Lean IT Foundation certification. He is the Chief Examiner for the
APMG Lean IT certifications and is currently the Content Board Lead of the Lean IT Association.

Jeroen Janssen

As a Lean IT consultant, Jeroen has helped many large organizations to adopt Lean and Agile
methods. Jeroen also contributed to the development of the Lean IT Foundation certification in 2011.
He has spent the past years applying it in a multitude of IT organizations.

www.leanitassociation.com

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 Copyright © 2017 Lean IT Association.

For all your inquiries, please contact [email protected]

or visit us at www.leanitassociation.com

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