IT organizations often struggle to be systems of value for their enterprises. Charles discussed the evolution of his Lean perspective across years via cases from some of the world’s largest IT organizations, and how enterprise architecture, ITIL, and similar approaches are necessary but not sufficient for truly Lean IT. More lean IT presentations and videos on www.lean-it-summit.com

1. Copyright © Institut Lean France 2012
22 & 23 November, 2012
Paris, France
Lean Lessons in Enterprise
Architecture and IT Service
Management
Charles Betz
Chief Account Architect & Director of Technical Strategy
US Telecom Provider, Retail Vertical

2. • Session E
• Lean Lessons in Enterprise Architecture and IT Service
Management by Charles T Betz, Enterprise Management
Associates, Inc.
• IT organizations often struggle to be systems of value for their
enterprises. Charlie will discuss the evolution of his Lean
perspective across years via cases from some of the world’s largest
IT organizations, and how enterprise architecture, ITIL, and similar
approaches are necessary but not sufficient for truly Lean IT.

3. What we will cover
• Purpose of this session: to
give you some well
grounded tools for
discussing Lean IT
• Help the IT professionals
talk to the Lean
professionals
• Goal: develop a Lean IT
approach to quantify IT,
focusing on the entire
system over time
• The frameworks
• What is the IT system of
value?
• Flow in IT
• Conclusion

4. How these concepts came to be
• I am an IT professional, and a
Lean amateur. In the strict sense of
those words.
• COBIT, ITIL, CMMI all important,
but…
• Major influences: Goldratt, core
Lean literature, Don Reinertsen,
Douglas Hubbard, systems
thinking
• “Taiichi Ohno set out to manage as
a system and discovered a series
of counterintuitive truths” (Seddon)

5. IT’s perception of Lean
• Lean = Manufacturing = …
The idea of software development as an assembly line manned by semi-skilled
interchangeable workers is fundamentally flawed and wasteful.
Bjarne Stroustrup, inventor of C++, 2010

6. ITIL© processes, activities and functions
Service Strategy Service Design Service Transition Service Operation Continual Service
Improvement
Stra tegy ma na gement Des i gn coordi na tion Tra ns i tion pl a nni ng & s upport Event ma na gement
Servi ce portfol i o ma na gement Servi ce ca tal og ma na gement Cha nge ma na gement Inci dent ma na gement
Fi na nci a l ma na gement Servi ce l evel ma na gement Servi ce a s s et a nd confi gura tion Reques t ful fi l l ment
ma na gement
Dema nd ma na gement Ava i l a bi l i ty ma na gement Rel ea s e a nd depl oyment Probl em ma na gement
Processes
ma na gement
Bus i nes s rel a tions hi p Ca pa ci ty ma na gement Servi ce va l i da tion a nd tes ting Acces s ma na gement
ma na gement
Servi ce continui ty ma na gement Cha nge eva l ua tion
Informa tion s ecuri ty ma na gement Knowl edge ma na gement
Suppl i er ma na gement
Requi rements engi neeri ng Communi ca tions Moni tori ng a nd control
Ma na gement of da ta & Org chg mgmt IT opera tions
i nforma tion
Activities/Other
Ma na gement of a ppl i ca tions Stakehol der mgmt Server a nd ma i nfra me
ma na gement/s upport
Network ma na gement
Stora ge a nd a rchi ve
Da taba s e a dmi ni s tra tion
Di rectory s ervi ces
Des ktop a nd mobi l e devi ces
Mi ddl ewa re
Internet/Web
Fa ci l i ties /Da ta center
Servi ce des k
Functions
Techni ca l ma na gement
IT opera tions
Appl i ca tion ma na gement
ITIL® is a Registered Trade Mark of the Cabinet Office (UK), and is registered in the U.S. Patent and Trademark Office.

7. COBIT© & CMMI© Processes
CMMI© 1.3 (Development)
COBIT® is a trademark of the Information Systems Audit and Control Association and the IT Governance Institute.
CMMI®, or Capability Maturity Model-Integrated, is a trademark or registered trademark of Carnegie Mellon University in the U.S. and other countries.

8. What’s it all about?
Service Strategy
Stra tegy ma na gement
Servi ce portfol i o ma na gement
Fi na nci a l ma na gement
Service Design
Des i gn coordi na tion
Servi ce ca tal og ma na gement
Servi ce l evel ma na gement
Service Transition
Tra ns i tion pl a nni ng & s upport
Cha nge ma na gement
Servi ce a s s et a nd confi gura tion
Service Operation
Event ma na gement
Inci dent ma na gement
Reques t ful fi l l ment
Continual Service
Improvement
We must not seek to optimize
every resource in the system … A
ma na gement
Dema nd ma na gement Ava i l a bi l i ty ma na gement Rel ea s e a nd depl oyment Probl em ma na gement
Processes
ma na gement
Bus i nes s rel a tions hi p Ca pa ci ty ma na gement Servi ce va l i da tion a nd tes ting Acces s ma na gement
ma na gement
Servi ce continui ty ma na gement Cha nge eva l ua tion
system of local optimums is not
Informa tion s ecuri ty ma na gement Knowl edge ma na gement
Suppl i er ma na gement
Requi rements engi neeri ng Communi ca tions Moni tori ng a nd control
Ma na gement of da ta & Org chg mgmt IT opera tions
i nforma tion
Activities/Other
an optimum system at all; it is a
Ma na gement of a ppl i ca tions Stakehol der mgmt Server a nd ma i nfra me
ma na gement/s upport
Network ma na gement
Stora ge a nd a rchi ve
Da taba s e a dmi ni s tra tion
Di rectory s ervi ces
very inefficient system.
Des ktop a nd mobi l e devi ces
Mi ddl ewa re
Internet/Web
Fa ci l i ties /Da ta center
Servi ce des k
Functions
Techni ca l ma na gement
IT opera tions
Appl i ca tion ma na gement
• What’s the purpose of
this factory?
• To make product?
 No…
• To make money.
ELI GOLDRATT

9. What is the purpose of IT?
To run computers?
– No…
To make money? (deliver results)
– Yes, but how?
– IT qualifies an enterprise to compete in
information-rich environments
• You can’t race in the Indy 500 unless you
qualify.
– And IT seeks to elevate enterprise
performance above peers…
• to the extent that enterprise performance
is based on excellence in managing
information.

10. Who did IT before there was IT?

11. How does IT achieve these goals?
Can I afford
dinner out?
Moment of truth
Application
Platform
OS
Computer
Network
M, E & P

12. Moment
of truth
The IT moment of truth
• To deliver it, you need an IT service
• That IT service is a product based on
computation
– A sensitive practice with many failure
modes
– Will always require specialists, just
like accounting, HR, engineering, etc.
• The moment of truth is an “outside-
in,” instantaneous experience of
transactional value.
• The service, as a product, may last
years
• Optimizing end to end flow ALWAYS
a concern
IT Service

13. Gemba walk: the essential states of the IT service
Norms & rituals
Grant access
(Service request Moment of truth User support
management) (Service desk)
IT Service
Throw the switch! Service restoration
(Change management) (Incident management)
Service improvement
(Enhancement, problem The end
Idea Construction management, much more)

14. Accept Demand
Execute Project
Deliver Release
Complete Change
Fulfill Service Request
Another view
Service lifecycle
MT
IT Service
Resolve Incident
Improve Service
Retire Service

15. The old way
Moment of
truth
Plan
Build
Run
IT Service
Waterfall thinking
Good for one version of one system

16. But IT services are evolving with
accelerating speed
Moment of
Moment of
Moment of
Moment of
Moment of
Moment of
Moment of
Moment of
Moment of
Moment of
truth
truth
truth
truth
truth
truth
truth
truth
truth
truth
IT Service IT Service IT Service IT Service IT Service IT Service Service ServiceService
IT IT IT Service
IT
Service lifecycle

17. The IT Lifecycles
Application service lifecycle
Infrastructure service lifecycle
Asset lifecycle
Technology product lifecycle
Service lifecycle

18. But isn’t it all about the service?
• The IT lifecycles all have lives of their own… they are loosely coupled. This is both
advantageous and painful. Dynamic, chaotic interactions.
Moment
of truth
Application service Application service
Application service
Application service
Infrastructure service Infrastructure service
Infrastructure service
Asset Asset Asset Asset Asset
Asset Asset Asset Asset Asset
Asset Asset Asset Asset
Technology
Technology product Technology product
product
Technology product Technology product
IT Service
Technology product Technology product

19. IT Lifecycles and Processes
Moment
of truth
Application
Execution
service lifecycle
Supply
Fulfill Service Request
Complete Change
Infrastructure
Resolve Incident
Improve Service
Accept Demand
Execute Project
Deliver Release
Retire Service
service lifecycle
Asset
lifecycle
Demand
Technology
product lifecycle IT Service
Service lifecycle

20. Application service lifecycle: all about the
degree of variability
• The concept of a “software
factory” raises many concerns.
• But in fact, software
development is a repeatable
process
• However, it is a subtype of a
product development process,
not a production process.
• The essential difference between
these processes is the degree
of variability
• This is measurable.
• Don Reinertsen’s work here is
highly recommended.

21. The “Four-O” Model
• Considered the work/wait approach to the lifecycles.
They are not deterministic enough.
– Probably only suitable for a minority
of IT processes
• Proposed: the “four-O” model.
Obtaining Operation Outage Operation Obsolescence
More to scale… we hope!
Think…in terms of constraints and Value vs. Non Value Add
Beware of inside out thinking – Operation status for any one lifecycle is only potential value
for the entire system (at least, it’s not the constraint)

22. What is enterprise architecture?
• IT strategic planning
• IT portfolio management
• Technology standards governance
• Internal analyst firm
• Solutions design standards and patterns
• Continuous service improvement
• Center of Excellence for data, process
(BPM), and systems analysis and modeling
• Data governance
• Project governance
• High level configuration management
• Consulting “bench”
• IT ombudsman
• General thought leadership
• Shuttle diplomacy…

23. Certain types of business
architecture go back decades
• Functional decompositions, flow charts,
DFDs…
Just because you can draw boxes and
lines corresponding to some business’s
terminology, does not mean you
understand its dynamics.

24. Two dimensions of EA evolution
The IT management wall ca. 2012
Business strategies
The business “food chain”
Business problems –
dynamic understanding
The EA ceiling ca. 2012
Business capabilities –
structural understanding
Business operations
(workflows and processes)
IT Systems
(algorithms and data
structures)
IT management maturity
Software engineering IT portfolios IT services IT performance IT Continuous
and CASE improvement

25. EA and Lean.
LEAN?
• Similar:
– Focus on system
– Look for waste & redundancy
• Different:
– EA origins in computing
– Lean, in manufacturing
– EA not attentive to human motivation

26. Reduce redundancy? Easier said
than done…

27. The 2 axes of IT value
User perspective
Includes individuals, business
services/capabilities/processes
Sponsor perspective
Service inputs &
outputs as they
evolve over time

28. What can we measure? Business
performance
User perception
Security
Breaches
Data quality
Sponsor perception
Inputs
Sponsor wilingness
to pay!
Constraints &
rework
Lifecycle value
Execution &
delivery

29. Constraint: can’t deliver the service
IT Service

30. Constraint: can’t change the service
IT Service IT Service
Service lifecycle

31. Constraint: Can’t trust the service
Trust
failure
IT Service

32. Recap: a system of value
• IT delivers value by qualifying an enterprise to compete in
information-rich environments and elevating the enterprise
performance above peers
• It does so by managing across two primary views of IT value:
that of the individual consumer’s, and that of the product
stakeholder.
– Flow in IT is understood along the two axes of value
– Lean IT is systems thinking applied to IT engineering and delivery in
optimal service to the IT customer.
• Where is the
constraint on the system?

33. Conclusions
• Understand IT value, with respect
for its historic purpose and origins
• It is a measurable system of value
• Long lived lifecycles are aligned
by results-oriented processes to a
state of transactional delivery
• Subject to emergent complex and
chaotic dynamics
• DevOps and integrated
demand/supply/execute
perspective are key steps forward
Copyright (c) 2012, Enterprise Management Associates

34. Speaker bio
• Charlie Betz is Director of Technical Strategy (aka Chief Architect) for a
major US telecom and ecommerce hosting provider, currently assigned to
one of the largest US retailers.
• Previously he was Research Director at Enterprise Management Associates.
His EMA responsibilities included IT portfolio management, IT financial
management, software asset management, service desks and ITSM suites,
and the concept of “ERP for IT.”
• Prior to that, he spent 6 years at Wells Fargo as Enterprise Architect and VP
for IT Portfolio Management and Systems Management. He has held
architect and application manager positions for Best Buy, Target, and
Accenture, specializing in IT management systems, ERP, enterprise
application integration, data architecture, and configuration management.
• He is the author of the recent 2nd edition of
Architecture and Patterns for IT: Service
Management, Resource Planning, and Governance
(Making Shoes for the Cobbler's Children),
and a co-author with Steve Bell’s of the recent
Run Grow Transform:
Integrating Business and Lean IT.
• Charlie lives in Minneapolis, Minnesota with his
wife Sue and son Keane.

35. Copyright © Institut Lean France 2012
22 & 23 November, 2012
Paris, France
More Lean IT presentations and videos on
www.lean-it-summit.com