Embrace Lean thinking to enable innovation #BTF09

The morning finished with a panel moderated by Dave West of Forrester, and including Kevin Haynes of Dell and Dave Smoley of Flextronics. West started out talking about the inertia within IT: more than 60% of IT is spent just keeping the lights on, legacy systems inhibit change and vendors are slow to change. There is, however, a wave of change coming, with Agile adoption at 36% and rising, 80% of developers using open source and new software development up by 9%.

Smoley told about their experiences at Flextronics, where Lean has spilled over from manufacturing to IT, allowing them to reduce their IT costs to less than 1% of revenue. They were able to reduce their IT costs by 36%, all while performing some major projects such as a new supply chain management system, a global HR system, a WAN refresh, a data center refresh and implementing a global service desk. He credits Lean with being able to determine what technology is important and what is unimportant to the business, allowing them to cut or rework the areas of waste. Their strategy includes a “just enough” mentality, putting the customer first, trying out hardware and software before they buy it, maximizing asset utilization, consolidating wherever possible, and enabling global collaboration. Projects are prioritized by ROI, and business alignment is done at multiple levels. They avoid single source, aren’t afraid to renegotiate maintenance contracts, and use open source and open standards where possible. They also bite the bullet and actually throw stuff out if it no longer is the best thing for them, which often requires putting people’s egos aside if they were involved in the original development or acquisition of a system that is being decommissioned.

Haynes related what they’ve done at Dell, which has been focused on keeping the lights on rather than innovation, but maintaining the important operations and customer service levels while spending less. Their strategy is focused on decreasing variability, focusing on projects that reduce costs while driving service excellence, and consolidation through virtualization and techniques such as reducing to three standard desktop images. All of this is not just about exciting new innovation, either: it’s just as necessary to focus on better ways to handle the steady-state maintenance projects as well, and automate them where possible to free up resources.

The discussion ranged across both strategic and operational aspects of how Lean is helping both organizations to reduce their IT costs, and way too much information for me to capture, especially since West seems to have ADD when it comes to handing the remote control to advance slides :)  There were some good takeaways about Lean, such as transparent reporting on value and waste, establishing the right team culture around a problem-solving approach, creating structure around value chains, and frequent delivery to allow for constant fine-tuning of the business value.

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