Lessons in Enterprise Architecture and IT Service Management by Charles Betz, European Lean IT Summit

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

• 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.

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

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)

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

ITIL© processes, activities and functions Service Strategy Service Design Service Transition Service Operation Continual Service

Improvement

Strategy management Des ign coordination Trans i tion planning & support Event management

Service portfol io management Service catalog management Change management Incident management

Financia l management Service level management Service asset and configuration

management

Request ful fi l lment

Demand management Avai labi l i ty management Release and deployment

management

Problem management

Bus iness relationship

management

Capacity management Service va l idation and testing Access management

Service continuity management Change evaluation

Information securi ty management Knowledge management

Suppl ier management

Requirements engineering Communications Monitoring and control

Management of data &

information

Org chg mgmt  IT operations

Management of appl ications Stakeholder mgmt Server and mainframe

management/support

Network management

Storage and archive

Database adminis tration

Directory services

Desktop and mobi le devices

Middleware

Internet/Web

Faci l i ties/Data center

Service desk

Technica l management

IT operations

Appl ication managementFunc

tion

sPr

oces

ses

Act

ivit

ies/

Oth

er

ITIL® is a Registered Trade Mark of the Cabinet Office (UK), and is registered in the U.S. Patent and Trademark Office.

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.

What’s it all about?

• What’s the purpose of this factory?

• To make product?

No…

• To make money.

ELI GOLDRATT

Service Strategy Service Design Service Transition Service Operation Continual Service

Improvement

Strategy management Des ign coordination Trans i tion planning & support Event management

Service portfol io management Service catalog management Change management Incident management

Financia l management Service level management Service asset and configuration

management

Request ful fi l lment

Demand management Avai labi l i ty management Release and deployment

management

Problem management

Bus iness relationship

management

Capacity management Service va l idation and testing Access management

Service continuity management Change evaluation

Information securi ty management Knowledge management

Suppl ier management

Requirements engineering Communications Monitoring and control

Management of data &

information

Org chg mgmt  IT operations

Management of appl ications Stakeholder mgmt Server and mainframe

management/support

Network management

Storage and archive

Database adminis tration

Directory services

Desktop and mobi le devices

Middleware

Internet/Web

Faci l i ties/Data center

Service desk

Technica l management

IT operations

Appl ication managementFunc

tion

sPr

oces

ses

Act

ivit

ies/

Oth

er

We must not seek to optimize every resource in the system … A system of local optimums is not an optimum system at all; it is a very inefficient system.

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.

Who did IT before there was IT?

How does IT achieve these goals?

Mo

me

nt o

f truth

Can I afford dinner out?

Application

Platform

OS

Computer

Network

M, E & P

IT Service

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

Mo

me

nt

of tru

th

Gemba walk: the essential states of the IT service

IT Service

Throw the switch! (Change management)

Grant access (Service request management)

User support (Service desk)

Service restoration (Incident management)

Moment of truth

Service improvement (Enhancement, problem

management, much more) Idea Construction

The end

Norms & rituals

Another view

IT Service

MT

Service lifecycle

Re

solv

e In

cid

ent

Acc

ep

t D

em

and

Exe

cute

Pro

ject

De

liver

Re

leas

e

Imp

rove

Se

rvic

e

Ret

ire

Se

rvic

e

Co

mp

lete

Ch

ange

Fulf

ill S

erv

ice

Re

qu

est

The old way

Plan

Build

Run

Waterfall thinking Good for one version of one system

IT Service

Mo

me

nt o

f tru

th

But IT services are evolving with

accelerating speed

IT Service

Mo

me

nt o

f tru

th

IT Service

Mo

me

nt o

f tru

th

IT Service

Mo

me

nt o

f tru

th

IT Service

Mo

me

nt o

f tru

th

IT Service

Mo

me

nt o

f tru

th

IT Service

Mo

me

nt o

f tru

th

IT Service

Mo

me

nt o

f tru

th

IT Service

Mo

me

nt o

f tru

th

IT Service

Mo

me

nt o

f tru

th

IT Service

Mo

me

nt o

f tru

th

Service lifecycle

The IT Lifecycles

Service lifecycle

Application service lifecycle

Infrastructure service lifecycle

Asset lifecycle

Technology product lifecycle

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.

Application service

Infrastructure service

Asset

Technology product

Application service

Application service

Application service

Infrastructure service

Infrastructure service

Asset

Asset Asset Asset Asset

Asset Asset Asset

Technology product

Technology product Technology product

Technology product

Technology product Technology product

Asset Asset Asset Asset Asset

IT Service

Mo

me

nt

of tru

th

Service lifecycle

IT Lifecycles and Processes

Application service lifecycle

Infrastructure service lifecycle

Asset lifecycle

Technology product lifecycle IT Service

Mo

me

nt

of tru

th

Re

solv

e In

cid

en

t

Acc

ep

t D

em

and

Exe

cute

Pro

ject

De

live

r R

ele

ase

Imp

rove

Se

rvic

e

Ret

ire

Se

rvic

e

Co

mp

lete

Ch

ange

Fulf

ill S

erv

ice

Re

qu

est

Supply

Demand

Execution

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.

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

More to scale… we hope!

Obsolescence Operation Outage Operation Obtaining

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)

• Proposed: the “four-O” model.

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…

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.

Two dimensions of EA evolution

IT management maturity

The

bu

sin

ess

“fo

od

ch

ain

”

IT Systems (algorithms and data structures)

Business operations (workflows and processes)

Business capabilities – structural understanding

Business problems – dynamic understanding

Business strategies

Software engineering and CASE

IT portfolios IT services IT performance IT Continuous improvement

The EA ceiling ca. 2012

The IT management wall ca. 2012

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

Reduce redundancy? Easier said

than done…

The 2 axes of IT value User perspective Includes individuals, business services/capabilities/processes

Sponsor perspective Service inputs & outputs as they evolve over time

What can we measure?

User perception

Lifecycle value

Constraints & rework

Security Breaches

Inputs

Execution & delivery

Sponsor perception

Business performance

Sponsor wilingness to pay!

Data quality

Constraint: can’t deliver the service

IT Service

Constraint: can’t change the service

IT Service IT Service

Service lifecycle

Constraint: Can’t trust the service

IT Service

Trust failure

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?

Conclusions

Copyright (c) 2012, Enterprise Management Associates

• 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

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.

Copyright © Institut Lean France 2012

22 & 23 November, 2012 Paris, France

More Lean IT presentations and videos on www.lean-it-summit.com