Measuring Success in the Lean IT World
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Transcript of Measuring Success in the Lean IT World
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Measuring Success in the Lean IT World
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LITAExecutive Webinar
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Host and Presenter
Deborah BurtonMarketing LeadLean IT Association (LITA)
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LITA - Pioneering a Global Standard for Lean IT Education & Certification
● Lean IT Association (LITA) is a non-profit organization founded by three Accredited Training Organizations (ATOs) - ITpreneurs, Pink Elephant, Quint Wellington Redwood and three Examination Institutes (EIs) - APMG, EXIN, PEOPLECERT International Ltd. To realize its broader purpose LITA aims to provide:
● An industry-standard set of Lean IT reference materials and other resources for practitioner organizations to use;
● An certification scheme aimed at practitioner organizations looking to adopt Lean IT principles in the IT Service development and operations department as well as professionals that want to be certified in Lean IT on various levels.
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Today's Guest Presenter
Niels Loader, Partner, Quint Wellington Redwood, Content Board Lead, Lean IT Association, Chief Examiner Lean IT, APMG
● IT Service Management● IT Performance Improvement● Lean IT● DevOps
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Watch the webinar recording
Webinar Recording
Measuring Success in the Lean IT World
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Measuring Success in the Lean IT World
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Today’s Agenda
1. Why do we need metrics?
2. Lean IT Metrics … and how to choose them
3. Getting metrics to work: Definition and Pitfalls
How can I measure my
success?
ObjectiveTo ensure you can measure your improvements, successes and progress
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Why Metrics?
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What Should I Measure?
Age-old Question
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Why Measure?
Influence behavior
Ensure you have facts concerning a particular situation
Provides the answer to a question
Helps you to provide feedback
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Metrics are just the BeginningWhy is it important
MeasureFrom goals to KPIs• Ensures discussions are based on facts• Ensures key measurements to monitor whether we are
achieving our goals• Facilitates concrete discussions concerning targets
VisualizeFrom KPIs to steering information▪ Consistent and effective communication about goals and
priorities▪ Enables real-time updates and continuous improvement▪ Ensures everyone has access to the same information
SteerFrom steering information to goals▪ Ability to correct where things go wrong▪ Ability to give feedback on performance (positive and negative)▪ Ability to discuss responsibilities
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Key Lean IT Metrics
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Lean IT Metrics are Clearly Customer-focused
1. Lost Production Hours 2. Time to Market of Changes3. Effectiveness of Changes4. Quality of Plans5. Number of Proactive Changes
No IT OutagesQuick
Time to Market of Changes
“Maintain current functionality” “Provide new functionality” “Give advice on current and new functionality”
New Use of IT
Listen to the Voice of the Customer when choosing metrics
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Customer-oriented metric: DisruptionsNo. of incidents and resolution times
Time that incidents are open
Time that IT customers cannot work
Excess cost and lost revenue
Priority Total number Average time to repair (days)
Number of users
affected
Gross lost production
days
Cost per day Dependancy Net Lost
production days Net costsCosts per day to business per incident
Total cost to the business
Critical 1042 0.7 20 14,227 € 240 50 % 7,113 € 1,707,213 5000 € 3,556,695
High 2796 5.4 10 149,634 € 240 40 % 59,853 € 14,364,817 1000 € 14,963,351
Medium 12196 10.3 4 500,948 € 240 30 % 150,284 € 36,068,234 500 € 62,618,462
Low 376 9.8 1 3,699 € 240 20 % 740 € 177,556 100 € 369,90816410 668,507 217,991 € 52,317,820 € 81,508,415
It’s about Lost Production Timenot Mean Time To Repair!
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• A classic Lean process metric• Just-In-Time• Use for … everything
• “Time to Market”– Start the positive part of the
business case– Meet agreed implementation date– Work within budget– Reliability
Customer-oriented metric: Lead Time
18 21 24 27 30 33 36 39 42 450.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
Average Customer Lead Time
TotalMoving average (Total)
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Internal Lean IT metrics: Time
Time is IT’s primary production factor
Key Metric: Earning Capacity Analysis
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Internal Lean IT metrics: Delivery
DevOps is the ultimate search for FLOW within IT
Key Metric: Release Frequency
18 20 22 24 26 28 30 32 34 36 38 40 42 44 460
10
20
30
40
50
60
70
80
Number of Story Points per week
TotalMoving average (Total)
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Bringing the Metrics Together: The KPI Tree
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Getting Metrics To Work
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Measuring is Not as Easy as it Seems
Pitfalls of Metrics• Spending insufficient time on defining metrics• Focusing on the numbers and not on what the
numbers are trying to tell you• Steering on individual scores rather than the
trend• Creating ‘insignificant’ metrics• Always test metrics against Lean Principles
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Measurement Do's and Don’ts
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• Do not assume that a measurement measures what people say it measures
– Describe the purpose of the measurement• Clearly define the things you want to measure
– Ensure the measurement process is accurate and precise enough for the purpose
– Ensure the measurement is trusted and that its quality is constant
– Define the population you are measuring– State when measurement starts and ends
• Use tools to reduce errors
You ALWAYS need to explain a measurement.
No measurement is self-explanatory.
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Getting Metrics to Work: DefinitionKPI : Lead time
Formula:Lead time• Date/time customer submits the request (in Service Now: field
“Open Date”) subtracted from the date/time the request is fulfilled (in Service Now: field “Actual Close Date”. This gives the Lead time.
• For each type of unit of work, the average lead time is calculated per week.
.
Issues (Ways in which the KPI can be 'gamed'): • Incorrect registration of stories and tickets may lead to an incorrect view of
lead time performance.• Requests are not registered at all, meaning no data is available
Frequency of reporting:WeeklyData should be updated on a daily basis, or be available realtime
Measurement Accuracy1 decimal
Data collection process: - Extract data (see formula) from ServiceNow (separate files)
- Stories from Backlog section - Tickets from Risk section
- Load into Excel- Calculate Lead Time according to formula- Present data as a time series chart showing at least the last 16 weeks
with a 4-period moving average trendline
KPI owner:RS MT
Category: process, customer
Definition: Measure the lead time of all units of work in order to understand where improvements in processes can be made to decrease lead time
Unit of measurement (%, number, index)- Number
Level at which the performance indicator is used:RS MT, teams
Goal: To influence behaviour towards ensuring that customers get the value they have requested as quickly as possible
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Getting Metrics to Work: Key Steps
Defining and measuring metrics• Use the KPI card• Start with a quick measurement, automate later• Learn to work with the metric
Using metrics• Focus on the behavior you want to change• Lean IT metrics lead to action• Integrate metrics into your visual management
Setting goals• Leadership team of IT is responsible for setting the
direction • Identify the aspects of strategy you want to measure
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Want to Learn More About How Metrics fit into Lean IT?
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Contact Us
Niels LoaderPartner Quint Wellington Redwood, LITA Lead Author Courseware Development
Deborah Burton Marketing LeadLean IT Association (LITA)
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Experience Lean IT in Action
We believe that “Lean Thinking” should be an integral part of every Enterprise IT organization and also every IT professional’s toolkit.
Lean thinking is about understanding how to assess business processes, to identify and eliminate waste. Today, many IT professionals stakeholders from cross-functional areas -operational, tactical and strategic — have or are planning to get certified in Lean IT with the objective of reducing waste and improving efficiency.
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Become a LITA Training Partner
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Watch the webinar recording
Webinar Recording
Measuring Success in the Lean IT World
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Thank you!