Lean IT - An Introduction

The growing complexity of IT infrastructure, rising number of services, the rising consumption of services and increased cost of service support has meant that IT is asked to handle more services. This is against the backdrop of a contrarian situation of reducing costs. Improving service quality > going up; and managing costs < going down.

We have seen that IT has often been unable to deliver services in a manner required despite improvements driven through many processes based approaches. Years of growing IT best practices like ITIL and CMMi SVC have seen impact; however there has always been felt that an approach towards leaner IT departments is a growing need. With the many years of application of Lean principles in production industries which have seen consistent improvement in their performances, there has been a growing desire for applying similar Lean principles to IT.

So what is Lean IT?

“Lean IT is the extension of lean manufacturing and lean services principles to the development and management of information technology products and services. Its central concern, applied in the context of IT, is the elimination of waste, where waste is work that adds no value to a product or service.” - Wikipedia – 2011,

The essential features of Lean were provided by a Landmark publication by Womack and Jones, in 1996, “Lean Thinking”.

Lean is about delivering value to customers with the ability to continuously improve. The principles can be encapsulated through the following:

• Value is defined by the customer. It is about the requirements that a customer has regarding the product or service to be delivered.  Thus the service’s value is seen by the benefit it brings to a customer.
• Value is delivered through a Value Stream. This is the complete process that ensures delivery of value, in a short; time frame.  
• Flow. This is a logical next step for charting the Value stream and implies that the activities involved in providing a service must follow a logical sequence, with minimal interruptions and minimal intermediate stockpiles
• Pull. This implies that the customer has the ability to trigger the value stream in accordance with the need of the value. 
• Perfection. Perfection is about each participant in the value stream is aware of his or her required quality requirement. The concept of continuous improvement comes into play.

Axelos Exam statistics 2014 – Don’t Panic - Yet

Effective January 1^st 2014, there was a fairly high increase in Exam prices announced by Axelos, the new ac-creditor and owner of the ITIL and Prince2 Portfolio. Some regions were more affected more severely. It was expected by many that the number of ITIL / Prince2 certifications, would fall considerably. Consequently many professionals in the IT Service Management sphere have been looking forward to the release of the official Axelos Exam data.

Last week, Axelos released the long awaited details of the exam consumed in 2014, for ITIL and the Prince2/PPM portfolio. Axelos choose to release the numbers for the period H1 (Half-Year 2014) and then correlated the numbers with H1 of 2013, so that the following report appeared:

Product	H1 2013	H2 2014	Variation
ITIL Exam #	160422	142651	11%
Prince2 /PPM Exam #	90162	91034	1%
Grand Total	250584	233685	7%

On first appearance, the report spelled doom for the ATO and training community which relied very heavily on ITIL training and certification as a product offering. The internet and blogs were full of doomsday scenarios from about the 13^th of September.

 

When people look at the picture alongside, usually there are two possibilities, one that the glass is half full, while the other is that the glass is half-empty. The positive and the negative, the hopeful and the fearful. However to some it also represents a scenario, that whatever way you look at the glass, you don’t have the full story, its only 50% of the story.

If we break the report into two parts ITIL and Prince2, we get two pieces of information, the ITIL numbers have gone down, while the Prince2 numbers have gone up slightly. So part of the story is good, instead of having a completely bad story.

Another story which does not come up from the huge data available to us is the fact that towards the end of 2013, when it became apparent that the exam rates were going up, a lot of prospective students decided to pre-pone their training and certification to take advantage of the then perceived reduced prices. So a lot of ATO’s and training providers were very active in the last quarter of 2013. The following data reflects the training business for ITIL in Q4 over the years:

ITIL Foundation for Fourth Quarter					ITIL Intermediate for Fourth Quarter
Year	Oct	Nov	Dec	Total	Year	Oct	Nov	Dec	Total
2010	21445	24070	26114	71629	2010	3040	3430	3515	9985
2011	23055	24994	24948	72997	2011	4570	5385	5468	15423
2012	25189	23900	22838	71927	2012	5836	6427	5066	17329
2013	24768	25226	28292	78286	2013	7003	7290	9279	23572

From the above, we see that the ITIL Foundations exams numbers between 2010 to 2012 were almost flat, but in 2013 they spiked, especially in Dec 2013, when the exams numbers were probably 4000-5000 more than what they should have been. From the same set of data above, the ITIL intermediate exam numbers are more difficult to extrapolate, as 2010 was the year when the impact of V2-V3 updation was beginning to be felt and hence year 2010 as a base year is not a good reference. However we can see a huge spike in Dec 2013 for ITIL intermediate exams, leaving us to believe that about 4000 ITIL Intermediate exams extra were taken in that month, above the normal which one could have expected. Combined, the ITIL Foundation and intermediate numbers were about 8-10,000 more than what have happened normally, which would to a great extent explain for the shortfall in H1 2014 numbers over H1 2013.

The long term conclusion is of course difficult to predict, however it is not the end of the road for training providers, and that there is still a huge requirement for training and certification, and those who provide value to their customers will always have a bright future.

ISACA SIG ITIL Presentation

ISACA Chennai Chapter is the oldest ISACA chapter in India and has been playing a very proactive role in educating its members on the latest industry updates. This year it decided to incorporate a Special Interest Group or SIG to focus on IT Service Management. SIG -ITIL as it is informally called conducted a meeting on the 6^th of April with a focus on Service Design and Service Transition.

There were two speakers who were to give the theoretical perspective to the topics while they needed a speaker to give a practical perspective. I was contacted by one of the Chapter members to give two presentations of about one hour each covering both Service Design and Service Transition.

Keeping in mind the post lunch time and the profile of the participants; my presentation was peppered with a lot of anecdotes bringing to light the challenges faced in providing appropriate services.

The base case study used was an actual implementation of full-fledged customer support department created by Sunil in the early 90’s which saw services being provided for about 5000 computer systems across 300 locations across India. From the Service Design perspective component the focus was on:

·         Design Coordination
·         Capacity Management
·         Availability Management
·         Service Level Management

The anecdotes were based on People and processes with the thought running from the lines of Douglas Adams, taken from the Service Design book:

“The common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools”

The focus on Service Transition was based on the words of Andy Warhol, taken from the Service Transition book

 “They always say that time changes things, but you actually have to change them yourself”

 The processes covered included:

·         Change Management
·         Service Asset & Configuration Management
·         Release & Deployment Management
·         Service Validation & Testing
·         Knowledge Management

It was a great way to get back into the presentation and writing space. Expect a lot more articles after a long break.

Strategizing Business Continuity

"In Strategy it is important to see distant things as if they were close and to take a distanced view of close things", Miyamoto Musashi

9/11 changed the way we looked at the world, at ourselves and the way we do business. Organizations suddenly realized what vulnerability was and the impact of various factors on business continuity. Over-night BCM or Business Continuity Management became the new buzz-word.

As I read the very recently released edition of Service Strategy, ITIL 2011, I came across some interesting factors related to Service Strategy and business continuity. The first was the identification of strategic industry factors and the second was the management of risk. Some of the quotes were so relevant that they reminded me of a case of a major telecom service provider. It was known for the quality of its voice services.

The ability to provide voice services to its customers were managed by a series of NOC (Network Operating Centres) across the country. Consequently to ensure seamless services for its customers in a very competitive market, a series of contingency plans were drawn up to ensure business continuity.

One of the plans involved the continued operations of specific servers at these NOC’s. It was factored in by the BCM people that some redundancy had to be built into the system in the event of damage or malfunction of key servers. Accordingly a set of servers were setup at an alternate location which would take over in the eventuality that the primary servers failed.

However one particular step to restore functionality needed manual intervention. Accordingly as part of the plan a quick reaction team was designated and this team would take the required action in the event of an emergency. The team members were provided specific mobile numbers by the telecom player to be called when the event occurred. It was thought the team members would be able to respond and have the back-up running in less than 30 minutes, an acceptable risk.

“Everything in strategy is very simple, but that does not mean that everything is easy,” Carl von Clausewitz

Unfortunately tragedy did strike and there was a fire at a NOC in one major hub. Voice Services went down. As per the business continuity plan steps were initiated to get systems up. Unfortunately it took more than 3 hours to get the systems on track.

When the post mortem was done, a fundamental error was seen. The quick reaction team was to respond when the voice services went down. However the means to contact them was through the same voice services they had to restore.

At times strategizing needs a common sense approach and understanding what to do and what not to do.

The Importance of Service Transition

“With the right pricing, a business will lead its field, brand loyalty, have the cash to expand and be highly profitable” - Peter Drucker

In these highly competitive times when businesses are under constant pressure to get the right pricing and reduce Capex (Capital Expenditure) and Opex (Operational Expenses), there is a constant change in service and product lines. To ensure the smooth flow from one service to another, “Change Management” and “Service Transition” play an important role.

While many managers understand the meaning of Service Transition as the addition or modification of planned or supported service or service components and its associated documentation some fail to realize the importance of Service Transition.

One interesting example of Service Transition which provides an insight on how things can go wrong is given below:

On 23 July 1983, an Air Canada Boeing 767-200, flight 143 from Montreal to Edmonton ran out of fuel at 26,000 feet midway into the flight. The Captain with extensive experience as a Glider Pilot was able to land the plane at an unused airport, Gimli, Canada, using techniques normally applied by Glider Pilots with no fatalities. This flight made aviation history and gave the plane its name “The Gimli Glider”.

On investigation by the “Transport Safety Board of Canada” the following was noted:

• The Boeing 767-200 was a new addition in the fleet. The planes had been in service for 4 months prior to flight 143, and the “Minimum Equipment List” or set of procedures had been updated more than 50 times
• Earlier planes had 3 crew members flying the plane, including the flight engineer who was responsible for fuel loads.
• The 767-200 had two crew members, and the duties of the flight engineer had not been adequately distributed amongst the pilot and co-pilot.
• Air Canada had just converted to the metric system of calculations for determining the fuel load, which were done in a complex calculation between volume or the holding capacity of the fuel in the fuel tanks and the weight of the fuel, so that instead of 22,300 Kg of Fuel, the flight had 22,300 pounds of fuel, or about 10,000 Kg.

All these errors got compounded to such an extent that the lives of more than 150 people were put at risk. The conclusion of the review board was this was a result of poorly managed transition caused by a series of corporate failures and minor human errors.

These errors happen so often in many things we do. While for a lot of managers the consequences may not be that dangerous, from a business perspective they could be. Thus an important learning from this is the importance of Service Transition in today’s business where minor faults can be catastrophic.

‘The art of progress is to preserve order amid change and to preserve change amid order.’— Alfred North Whitehead

Convergence in the Cloud, RIM, SAAS, ITSM and ITIL

The evolution of the internet from a medium of connectivity to a medium of business has brought about a paradigm shift in IT behavior and usage. Cloud computing is representative of that shift. It presents a dynamic change whereby resources such as application software, information, and data center usage are available to organizations in an “on-demand” with “pay as you go” basis; akin to utilities like electricity and water.

While to many it may seem like a revolution, in its roots lie certain basic principles of evolution. The first stage in the evolution evolved from better and faster connectivity, which allowed outsourcing as a separate industry to grow. Outsourcing achieved two things, it helped organizations to have cost advantages, and it gave them the ability to focus on their core competencies. A third very important point not often realized is that it broke the taboo of using specialized outsourced services and the fear associated with having critical data stored and utilized by third parties.

With time; evolution of both hardware and services has seen a slow convergence on the web. As services became specialized new models of businesses for software; allowing customers cost advantages in their Capital Expenditure like ASP or “Application Service Provider” models have grown. Further from the ASP model has grown the SAAS or “Software As A Service”.

Similarly from a situation of owning and maintaining huge IT infrastructure has grown the practice of using outsourced models via data centers and RIM “Remote Infrastructure Management”. The growth of RIM has been so rapid that Gartner predicts that by 2012, 20% of businesses will own no major IT Assets.

“As organizations make plans to navigate the economic recovery and prepare for the return to growth, our predictions for 2010 focus on the impact of critical changes in the balance of control and power in IT," Brian Gammage, VP and Research fellow at Gartner.

Cementing the relationship between Software on the web and Infrastructure on the web has been the practice of Service Management, or IT Service Management, a discipline used to provide continual IT Infrastructure and Services seamlessly. IT service management is representative of an emerging scenario where the focus of any organization is the service it provides to its clients and not the technology.

These emerging scenarios’s are in line with the changes in the best practises area where there has been a shift from “process” to “business”. ITIL, the most established best practise in ITSM has also seen a focus on the life-cycle approach. As we see the current phase out of ITIL Version 2 to the ITIL version 3, we also need to look at the need for re-tooling and re-training professionals.

After all, what worked well in yesterday’s environment has been clouded over.

ITIL V3, Enhancing Business Value

Last November the 20th anniversary of ITIL was celebrated. For the uninitiated, ITIL or “Information Technology Infrastructure Library” is a Best Practice Framework for IT Service Management. It has evolved over the years from version 1 released in 1989, with a version 2 being released around the year 2001 and in 2007, a new version, V3 being introduced. When Version 3 or V3 was introduced, Version 2, or V2 was not withdrawn. This happened only recently in December 2009. This simultaneous existence of two versions between 2007 and 2009 created a huge churn over the respective merits of ITIL V2 and ITIL V3.

To many; V3’s emphasis on creating business value over simply improving execution of processes is its biggest achievement, while for others the core focus of ITIL should be on improving processes. In this churn of things I recollected my own experiences with Infrastructure Management, and this brought into focus why I believe that Business Value is enhanced by ITIL V3 and hence it merits greater attention.

About 20 years ago I was working in a company which pioneered Computer Education in the School Segment in India. At that time we had a presence in about 90 cities and towns spanning the length and breadth of the country with an installed base of upwards of 2000 systems. Towards the end of 1989, when the need for enhancing customer support was felt, I was given that task. The brief I had on being given the responsibility was very simple “We need to ensure that our clients are happy and that we can re-sign our contracts. To ensure re-signing, the computer systems must work”.

Though we already had a team doing maintenance work, there was a need to have a systematic approach in “Infrastructure Management”. Thus the existing department, the FE (Field Engineering) Department was greatly enhanced in size, scope and approach. However imagine India in the 80’s and 90’s, without its present communications link. There were no mobiles, the PCO system was not up, and calling a place like Kurseong, or Pathanamthitta or Dibrugarh, could take days. Telegrams were a way out, but they were difficult to convey messages. The internet was not even imagined. Thus slow mail was the only way out.

When we set out to expand the FE Dept. we had all these challenges and more. As I went along in the job, I learnt by experience the essence of creating business value over just improving existing processes. To many, the term Business Value may seem like an esoteric term as it talks of intangibles beyond monetary terms, like customer, societal, and supplier values. However if the Balanced Scorecard perspective of the Financial; Customer; Internal Business, and Innovation and Learning, were applied, the concept was not too difficult to understand.

I would try to relate those perspectives from my learning as I went about defining Services. The first factor relating to finance was the most easily understood! It was a given that by re-signing the contracts we would be adding to the top-line and bottom line.

The second factor was the customer. We needed to be near the customer and provide a better experience for him so that he would keep coming back to us. That helped to define the customer in our “Service Strategy”. Our Strategy was to work on a hub and spoke model, the Hubs being the major metros Delhi, Mumbai, Chennai, Kolkata and Gauwhati. The whole purpose of working on a Hub and Spoke model was based on the fact that the current infrastructure for communication and reach was a handicap and to be nearer the customer, we needed a decentralized process.

We then looked at our employees in the field as our internal customers, and approached our working from the aspect of “A Happy Employee creates a Happy Customer”. We knew that if we enabled our employees to have better infrastructure, there would be lesser complaints from customers giving our employees more peace at work.

The fourth important aspect, Learning and Innovation was something we really took to heart. From an ITIL V3 perspective I could compare this to the emphasis on “Continual Service Improvement” or CSI.

Since we could not plan out everything in advance we were constantly trying to incorporate new learning’s from the field. We created a Field Engineers Handbook to be distributed to all employees so that they could do first level repairs themselves, reporting formats were created and then modified and re-modified, the aim was to improve; always. We went by the adage, “Change is the only constant”. In that sense CSI is all about change and adaptability, incorporating all good things.

CSI is not just an important component in Infrastructure Management; it is an important component in management philosophy as a whole. Thus in the debate of the improvements of ITIL V3, the extra emphasis on Service Strategy and CSI, help businesses by enhancing Business Value.

The Need for ITIL Compliance and Training

“Information technology and business are becoming inextricably interwoven. I don't think anybody can talk meaningfully about one without the talking about the other.”

Bill Gates

To say that businesses are increasingly dependent on the performance and integrity of their Information Technology (IT) Systems, processes and Infrastructure, is a major understatement. Be it banking and finance, retail or manufacture, IT forms the backbone for efficient services. To better manage IT services, the guidelines laid under the ITIL® scheme are a standard to enable efficient cost effective performance. Today ITIL is the accepted framework for IT Service Management. Compliance to ITIL processes and methodologies does give an edge to organizations specifically focused on Infrastructure Management.

“The Infrastructure Management Services (IMS) industry currently accounts for US $524 Billion, nearly 25% of the US $ 2.3 Trillion IT Spend, and this is moving towards a remote delivery model where services are increasingly delivered by vendors from low-cost locations.”

http://www.mckinsey.com/locations/india/mckinseyonindia/pdf/RIM_Exec_Summ.pdf

In 2004, Bharti set a precedent for “Equipment and Network Management Services” when it signed a $ 750 Million outsourcing deal with IBM. This was a global first in the telecom space and since then other organizations have followed in similar patterns. In March 2007, Idea Cellular did a deal valued at that time of about $ 600 million plus for a 10 year period.

Outsourcing of Infrastructure Management, as an Industry is probably the next big opportunity. RIM or Remote Infrastructure Management as an Industry may be valued in the region of $ 26-28 Billion by 2013, as per a study conducted by Nasscom and McKinsey, titled: "The Rising Remote Infrastructure Management Opportunity: Establishing India’s Leadership". It states that the global RIM industry has grown at more than 80 percent CAGR, from $2 billion in 2006 to $6 billion in 2007 to $7 billion in 2008.

http://www.nasscom.org/Nasscom/templates/NormalPage.aspx?id=53579

As an industry the opportunities are great, therefore for any Organization benchmarking its processes against internationally recognized and accepted standards is of the utmost importance to catch a piece of the potential $ 26 Billion pie. That explains the necessity for the organizations to be “ITIL Compliant”.

The next step to understand is that your processes and systems are only as good as the people who work and manage them. I quote Aristotle, to explain it for me.

“Excellence is an art won by training and habituation. We do not act rightly because we have virtue or excellence, but we rather have those because we have acted rightly. We are what we repeatedly do. Excellence, then, is not an act but a habit.”

Training individual employees to ensure excellence in service is thus one of the single most important aspects of benchmarking yourself. Training makes you a champion, as Muhammad Ali famously said “I hated every minute of training, but I said, ''Don't quit. Suffer now and live the rest of your life as a champion.''”

Why ITIL has so little emphasis on Infrastructure

For the practitioners of ITIL and its champions a question which often comes up is why is it that in a best practice labeled “Infrastructure Library”, the actual emphasis on Infrastructure is minimal.

We need to understand what ITIL is and where it comes from to answer this basic but important question.

What is ITIL?

“ITIL® is the only consistent and comprehensive documentation of best practice for IT Service Management. Used by thousands of organizations around the world, a whole ITIL philosophy has grown up around the guidance contained within the ITIL books and the supporting professional qualification scheme.

The ethos behind the development of ITIL is the recognition that organizations are becoming increasingly dependent on IT in order to satisfy their corporate aims and meet their business needs. This leads to an increased requirement for high quality IT services.”

http://www.itil-officialsite.com/AboutITIL/WhatisITIL.asp

“If GM had kept up with technology like the computer Industry has, we would all be driving $ 25 cars that got 1000 MPG (miles per gallon)” – Bill Gates

Bill Gates could not have said it better to describe the explosive growth of the Computer or IT industry. However what needs to be understood is that the IT industry is just not the hardware component, but the software as well. In the 70’s and early 80’s decisions affecting the use of IT were based on the hardware aspect. It slowly progressed to a focus on the software aspect. Now decisions on IT are based on “the need”.

The requirement and the consequent design of solutions of comes first with both hardware and software based on the need. Thus the IT industry has progressed considerably from the focus on hardware to the “solution”, from a product to a “service”.

ITIL or “Information Technology Information Library” follows a similar history. This concept emerged in the 1980’s when the British Government decided it needed to have a framework to efficiently manage the use of IT resources. As was the scenario in the 70’s and early 80’s, IT resources meant “Hardware”. The British Government tasked the Central Computer and Telecommunications Agency (CCTA), now called the Office of Government Commerce (OGC) to devise a framework for efficiently managing these resources.

The earliest version of ITIL was called GITIM, “Government Information Technology Infrastructure Management”. It focussed heavily on service support and delivery of IT infrastructure. By the 1990’s the framework for managing IT Infrastructure had gained widespread use in Europe and the name ITIL stuck.

However like all of Information technologies’ explosive growth as explained with the analogy of the development of the car, the scope of IT Service Management has grown, the only thing not having grown is the name, which is still rooted in the IT infrastructure of yore. ITIL underwent an overhaul in 2001 with Version 2. The latest version change “V3” in 2007; or ITIL V3 has laid emphasis on aligning with business needs.

To explain further the explosive growth of computing power, try to recollect the Y2K problem. In the 1960’s when computers began to be used in general applications, computer programmers used to use only 2 digits to represent the year to save on computer memory costs. As the year 2000 was approaching there was a sudden fear that all those programs with their roots in the 1960’s would not work. Hence there was a frenzy to upgrade software code. Hardware scarcity is not a fear any longer.

In the scheme of things today, the hardware or infrastructure portion plays just one part in the provisioning of IT services. It’s like having a lot of information. Information by itself is of no use unless it is structured in a usable format, what we would say knowledge. Similarly to ensure optimal usage of services “ITIL” now mandates a comprehensive all encompassing approach to service management, and not looking at Infrastructure in isolation.

The philosophy behind ITIL V3 today as per the OGC is one of “patterns of collaborative exchanges, rather than an assembly line”.

ITIL today is all about aligning the four P’s i.e. People, Process, Products and Partners. In such a scenario Products or hardware or infrastructure thus forms just one important pillar.