Application of Lean Six Sigma in IT Tutorial

2.1 Lesson 02 Application of Lean Six Sigma in IT

Hello and welcome to the second lesson - Application of Lean Six Sigma in IT offered by Simplilearn. This lesson will cover the core IT functions as well as challenges common to IT organizations and how Lean Six Sigma can help solve them. Let us explore the objectives of this lesson in the next screen.

2.2 Objectives

After completing this lesson you will be able to BP1:Articulate core functions and processes common to IT organizations BP2:Understand the important role IT plays in most organizations BP3:Identify common challenges with IT BP4: Identify how Lean Six Sigma is used to solve problems of cost, quality, and time in IT. Let us begin with the first topic of this lesson in the next screen

2.3 Application of Lean Six Sigma in IT Topic 1 Core IT Functions and Processes

The first topic of this lesson will discuss the core functions and processes common to IT organizations On the next screen, we will begin our discussion on Core IT functions

2.4 Core IT Functions

There are many different ways for an IT organization to be structured. Regardless of structure, IT organizations have a common set of activities they perform . These activities can be divided into three general core functions. These three functions are: Plan- : Plan includes the activities that occur prior to a project or program launch Build: The build function is responsible for developing and delivering on technology solutions to the business Run: The run function takes over once the technology solution is developed and implemented. Core run activities include system and application maintenance and infrastructure activities We will discuss the three core functions in detail, starting with plan on the next screen

2.5 Plan Functions

BP1: Planning activities occur at two levels in the organization. At the strategic level, planning involves integrating the technology strategy with the business strategy and developing a prioritized portfolio to achieve the strategy. At the tactical level, planning is a project specific activity designed to ensure project success. BP2: Good planning starts with a comprehensive strategy and cascades down to the individual project level BP3: Planning is foundational to successful IT performance. Poor or non existent planning limits the effectiveness of all following functions. As we delve into common problems seen in IT, many of them are caused by poor upfront planning activities. BP 4: Many of the planning activities have both strategic and tactical components. In the next screen, we will discuss the 5 key functions involved in IT planning

2.6 IT Planning

The planning functions may be part of a comprehensive plan organization, or they may report to separate areas within an organization. No matter where they report to in the organizational structure , the work produced by each function is similar. The 5 functions are: Bp1 : IT Strategy. The IT strategy should be linked to the overall organizations strategy. Given the fact technology is a key driver of business process, failing to link the two greatly increases the chances of failing to achieve the required business outcomes necessary to achieve the strategy. BP 2: The IT strategy also sets the vision and direction for project selection and other core activities BP3: Enterprise Architecture: The role of enterprise architecture is to establish the standards for the business, technology, process, and information necessary to achieve the IT strategy. This function is critical in bringing the voice of the business to the planning to ensure alignment at both a strategic and tactical level BP4: Portfolio: The portfolio functions is where the potential projects are collected and prioritized. This prioritization should happen in concert with the business partners. BP5: After the prioritization work is done, the outcome is a comprehensive portfolio of both technology and associated business process projects that will be undertaken .

2.7 Build Functions

BP1: The build function is comprised of the activities undertaken in the solution delivery process BP2: There are many different methodologies used to structure and execute the solution delivery process. Examples include Agile, Scrum, Waterfall, modified waterfall and many others. In this course we will discuss the build process agnostic of any solution delivery method. While not covered in this course, it is worthwhile to note both Agile and Scrum methodologies are structured in a way that closely follows lean principles. In the next screen we will cover the three key functions of the build process.

2.8 IT Build

There are three core functions with the IT Build arena BP1: The first function is business analysis, which provides functional rather than technology knowledge to the project team. The business analysis function serves as a conduit between the IT team building the product and the business team who will be using the product. The business analyst, for any given project, has the primary responsibility to work with the business lead to gather the requirements that will be translated to technical specifications that will happen in the development phase of the project. Bp2: The 2nd build function is development. This function is responsible for delivering the technology solution based on the requirements gathered by the business analyst. In addition to the initial build, the development function fixes defects in the technology during the course of the project and through a specified warranty period BP3: The 3rd build function is testing, which is tasked with verifying the technology solution works the way it was built to work. This is accomplished through the development and execution of test scripts. The testing function includes functional testing after the build is complete, and user acceptance testing prior to release and final fixes. On the next screen, we will discuss the run function.

2.9 Run Functions

BP1: The run function has the responsibility for operations and support activities that ensure stable system performance Bp2: The run function is the key to meeting customer expectations as they relate to technology interactions and the adherence to internal service levels.

2.10 IT Run

Run activities align to three major functions which are: BP1: Hardware Support: These are the “lights on” systems and activities and include tasks such as network and server maintenance. Hardware support is a primary driver of system performance as many perceived application issues are often behind the scenes hardware failures or errors. BP2: Application Maintenance: The application maintenance function has responsibility for the application performance after implementation- this includes routine maintenance, ongoing defect fixes, and system functionality changes or updates. Bp3: The run function also includes the user support functions including both customer facing and internal help desk functions as well as PC deployment and support within an organization. The next screen will focus on the role of IT in Organizations

2.11 Role of IT in Organizations

BP1: IT plays an important role in the modern organization. IT is a key player at the highest levels of the organization in developing and informing the corporate strategy. It also plays a critical tactical role through the development, implementation, and ongoing support of the technology that drives critical business processes BP2: As key business processes come to rely more on technology , the importance of IT has dramatically increased . BP3: IT is highly visible in the organization not only for what they deliver and enable, but also for how much they cost an organization. While the percentage varies across industries, it is not uncommon for IT to account for the largest individual driver of cost within the organization. In the next screen, let us explore the strategic role of IT.

2.12 Strategic Role of IT

IT plays a critical role in achieving business strategy.. Listed below are four of the most impactful ones. BP1: Strategic Execution: Today’s businesses are incredibly complex. The rise of mergers and acquisitions, consolidations, and the globalization of the economy create a dynamic, ever-changing business environment. As the business changes, so does the technology landscape and requirements. Tight IT alignment to the strategic activities of the organization is needed to ensure a successful strategy execution. BP2: Process: In the highly digitized world, business processes are increasingly being enabled and supported by technology. This is consistent across industries including manufacturing, health care, financial services, and retail and many others. Failure to link technology to the key business processes is not only inefficient, it also carries the risk of decreasing customer satisfaction and customer abandonment BP3: Flexibility: Rapid advancements in technology and the consumers growing expectations of how they interact with companies they do business with drive the need for a flexible, adaptable business and technology model. The IT organization plays a key role in identifying future technology trends and integrating them into the strategic plan for the organization. PB4: As discussed previously, IT spend is a large part of most organizations’ total budget. Careful IT planning and investment is necessary to ensure the organization has the capital needed to deliver on other, non technology based strategic priorities. We will discuss the tactical role of IT in the organization on the next screen

2.13 Tactical Role of IT

BP1: In addition to being a key player in the strategic activities of the organization, IT also has a strong role in the day to day activities that occur in the organization. Listed below are 4 of the most important areas of work within IT. BP2: Development: The development activities undertaken by IT are instrumental in providing tools and programs to drive business process. BP3: Maintenance activities: IT has responsibility for the ongoing maintenance of hardware, applications, and other infrastructure items. Maintenance activities are often kept behind the scene, however they are some of the most important work IT performs. These maintenance activities aim to ensure the systems are available, stable, and at an acceptable performance level at all times. Reporting: Reports produced by IT systems provide critical information needed to run the organizations effectively. BP4: and finally, user support activities. User support encompasses roles including external(customer facing) and internal help desk activities as well as PC and peripherals support inside an organization. These functions are vital in ensuring internal productivity and customer satisfaction Let us proceed to the next topic of this lesson in the following screen

2.14 Application of Lean Six Sigma in IT Topic 2 Common Challenges in IT

In this topic, we will cover common challenges in IT organizations The next screen will provide an overview of the challenges facing IT organizations

2.15 Common Challenges in IT

There are many difficulties and challenges that face IT organizations. Key amongst these challenges are issues of cost, quality, and time All three primary IT functions struggles with these issues, however they manifest themselves in different ways depending on the function. We will cover critical planning processes in the next screen

2.16 Critical Planning Processes

To understand problems commonly seen in IT organizations, it is important to identify some of the critical processes performed in most IT organizations The planning process is a large and complex function, comprised of many processes. Listed below are four of the critical processes within the planning function BP2: Prioritization: Prioritization is actually a group of processes and tools used to develop a portfolio of projects to be completed during a defined time period. Establishing the right criteria and a governance process to complete the prioritization are key elements to properly prioritizing projects. BP3: Requirements: Requirements gathering is done by a business analyst in conjunction with business leads. The requirements process is in place to solicit the business performance requirements and functionality that need to be addressed during the build process. BP4: Estimating: The estimating process involves multiple players to ensure a desired level of accuracy. The intent of the estimating process is to understand and quantify the effort, time, resources and overall cost of the projects in the portfolio. Estimating generally occurs at least twice in a project lifecycle. High level estimates are done in order to support the prioritization process, and detailed estimates are completed after a project has been greenlighted into the portfolio. BP5: Demand Management: As the estimating process ends, the work of the demand management process begins. The role of demand management is to ensure the people with the right skills are available at the time needed to execute the project. Demand management starts at a high level when the portfolio is developed, and becomes more granular as the project gets nearer to launch. We will discuss the critical build processes in the next screen

2.17 Critical Build Processes

BP1:The build function can be broken down into 4 major processes. They are: BP2: Project Management: Project management processes are large, varied, and take place across all phases of the project. The project manager is responsible for establishing deliverables and timelines, assigning resources to tasks, managing project budget, and providing project updates are just a few of these activities. Overall, it is project management which provides oversight to the entire project, including time and budget. BP3: Application Development: As discussed in the previous topic, application development is the process of building the technology solutions. BP4: Testing: Testing processes are designed to identify defects in the technology solutions so it can be fixed prior to implementation BP5: Implementation: Project implementation also includes a variety of processes. Key amongst these processes are change management and communication around the implementation, migration of data and users to new systems, and the transition from the build function to run state. The next screen will focus on critical run processes

2.18 Critical Run Processes

BP1: As with plan, there are many processes that occur under the umbrella of run activities. Four of the largest, most critical process are detailed below BP2: Monitoring: System performance monitoring provides multiple benefits to the IT organization. Proactive monitoring allows the run teams to identify system issues and work to address them before an outage can occur, as well as identify system instability or slow performance. Monitoring history also provides critical information in case an outage does occur. Finally the monitoring processes provide information for regular reporting on performance as it relates to targets, volumes, and other run metrics. BP3: The repair process occurs when there are issues with system performance or unscheduled downtime. The repair processes are tasked with diagnosing and repairing technology failures and are also tasked with root cause analysis to prevent future problems Bp4: Updates: The run organization is responsible for maintaining applications once the warranty period expires on projects that have been implemented. Update processes include updating functionality at the request of the business and fixing ongoing defects . BP 5: The final process we will cover are those that focus on end user support. It is the function of the end user support processes to solve end user issue and complaints. The next few screens will identify common challenges seen in the critical processes we have identified. Let us begin with common planning challenges.

2.19 Common Planning Challenges

Read all titles then Script: cover all bullet points on slide as appear In the next screen , let us address common build challenges

2.20 Common Build Challenges

Read titles first thenScript: cover all bullet points on slide as appear We will discuss common run challenges in the next screen

2.21 Common Run Challenges

Common challenges in run processes are: Monitoring - Failure to identify performance issues prior to outage Wrong system metrics monitored Repair- Root cause analysis incomplete or inconclusive Updates Exception releases to add functionality High level of defects passed on from build End User Support Low first time solve rates Service level agreement times not aligned with customer expectations Advance to the next screen to start the next topic in the lesson

2.22 Application of Lean Six Sigma in IT Topic 3 Addressing Common IT Challenges with Lean Six Sigma

The last topic in this lesson is about addressing common IT challenges with Lean Six Sigma In the next screen we will review the 4 disciplines of lean six sigma applied to the plan function

2.23 Four Disciplines of Plan Function

The four disciplines of Lean Six Sigma applied to the plan function are: Right thing: Selecting the right projects to put into the portfolio based on appropriate evaluation criteria and aligned to the overall organization strategy Right Time: Timing of project prioritization in sync with the overall organization’s planning cycle Right Cost: Accurate estimates of project cost and benefit used to choose the right projects to put in the portfolio Right effort: Completing estimates and resource planning with the right amount of detail in the prioritization process- high level for prioritization and at a detailed level during project scoping On the next screen, we will apply the four disciplines to the build function

2.24 Four Disciplines of Build Process

The four disciplines of Lean Six Sigma applied to the software development or build processes are Right thing: Soliciting accurate requirements and delivering solution without defects Right Time: Project completed on time Right Cost: Project completed within budget Right effort: Project staffed by resources with the right skills and completing the right tasks On the next screen, we will cover the 4 disciplines applied to the run function

2.25 Four Disciplines of Run Function

The four disciplines of Lean Six Sigma applied to an internal help desk run function are Right thing: Help desk equipped to address callers issues Right Time: Acceptable call answer and hold time to access help desk support Right Cost: Staffing synced with volume and demand, and level of support needed Right effort: Availability of information and knowledge to provide single call resolution As discussed earlier, there are many difficulties and challenges that face IT organizations. The next screen will focus on issues of cost, quality, and time in IT.

2.26 Cost, Quality, and Time

In the previous topic, we identified a multitude of challenges that are commonly experienced in IT organizations. While the challenges themselves are specific to the IT function, in general they can be bucketed into 3 categories. The lean six sigma methodology is the perfect vehicle to address these challenges. Listed below are a few examples in each category BP1: Cost: IT is often perceived as being too costly by leadership in an organization. This is backed up by the reality of the large percentage of both capital and expense budgets in an organization that are consumed by IT activities and projects. Two common IT challenges relating to cost are IT projects coming in well over the original estimates due to increases in scope or other project challenges. Infrastructure costs are also a significant fixed expense challenge in many organizations. BP 2: It is often challenged on the quality of the technology solutions they deliver. Failure to deliver critical requirements and launching projects with critical defects both contribute to this perception. Outside of the project realm, system outages and periods of slow response are critical quality defects. BP 3: Time: Time is also an area of challenge within IT. We have already discussed the problem of cost over runs in projects, and projects going over the allotted time also occurs with great frequency. Run functions are also challenged with issues of time. Long hold times in the help desk functions and slow response to users with Personal computer issues are just a few of the time issues experienced by IT customers The next screen will summarize what we have covered in this lesson

2.27 Quiz

Following is the quiz section to test your understanding of the topics covered in this lesson

2.28 Summary

Here is a quick recap of what we have learned in this lesson: BP1The majority of IT functions can be divided into three core functions: Plan, Build, and Run Bp2:IT plays a critical strategic and tactical role within most organizations Bp3:All three functions have critical processes they perform within a organization bp4 organizations face many challenges which can be bucketed into 3 categories: Cost, Quality, and Time Bp5:The 4 disciplines of Lean Six Sigma can be used to address the challenges experienced by IT

2.29 Conclusion

This concludes lesson two, Application of Lean Six Sigma in IT In the next lesson, we will discuss define

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  • PMP, PMI, PMBOK, CAPM, PgMP, PfMP, ACP, PBA, RMP, SP, and OPM3 are registered marks of the Project Management Institute, Inc.

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