What IS for the Lean company, by Pierre Delort at the Lean IT Summit

Pierre Delort, Ph.D.

President of the French Association of CIOs ANDSI

Association Nationale des DSI www.andsi.fr

Lean IS, IS for Lean, both ?

© Pierre Delort 2013 1

1.  Generali Proximité Assurance (GPA) – corporate organisation manager ;

2.  Researcher at Mines ParisTech, a French Engineering School ;

3.  (first) CIO of Réseau Ferré de France (French Railways Infrastructure Manager) ;

4.  CIO of Inserm (the French Research Institute in Biosciences) & President of the French Association of CIOs (ANDSI, Association Nationale des DSI, www.andsi.fr)

Lean Management and me

2

Generali Proximité Assurance (GPA), Fall 1991.

3 © Pierre Delort 2013

Four years after, IBM’s users conference, 1995.


The transformation of the Back Offices


Results for GPA & me

Ph.D. in Business Administration

Research Center for Scientific Business Administration

Productivity (about) : • -25/-35% (underwriters) • -50% (management, employees)

Cycle time : -50%


The past : production systems history

c. 1700 Similar Design

c. 1760 spare parts

c. 1770 standard design

c. 1800 interchangeability

c. 1850 standard parts AMPS

c. 1900 standard operations

1908 continuous flow

1913 assembly line

From c.1950 TPS Lean


The Future : Economics

Information vs. Institution, Workflow, Lean Management and Governance of the Firm.

Mines Paris Tech, 1997.


And I was able to understand (and teach) the reasons of our gains at GPA

“The [NPS] consultants must persuade workers that men are, by nature, multi-talented and that superiors that do not use all these talents are bad superiors. » Conversation with M. Ohno, in Shinohara I., NPS : New Production System 1985).


CIO of Réseau Ferré de France : less Muda… RFF Investment (€4

b/y), from 7 to 2 applications ;

•  less data entry (SNCF Region was input 12 times on average)

•  fewer errors,

•  Less Muda….

•  …. but also less adaptability.


Shorten the process (1 person instead of 2) by putting the project manager in front of the PC, through ; •  visual Management of its portfolio of project ; •  Economy of vigilance with Alerters (on budget, cost & time) ; •  And a thorough ergonomics design… •  … for leaner processes & operations.

This lead me to a question ;

…and leaner processes

how IS can foster Lean Management in a firm ? 11 © Pierre Delort 2013

And in 2011 I proposed then carried out a study at the Cigref.

1.  is Lean management applicable to an IS Department (Lean for IS ) ? A.  IT operation ; B.  Software development.

2.  can an IS Department foster or induce Lean in the Business (IS for Lean) ? 3.  and finally, does the Lean has a role to play in the digital transformation of

Business (Lean for IS for Business) ? http://www.cigref.fr/quel-si-pour-la-firme-lean

The working group set its own definition of Lean, based on 6 principles ;   Process improvement (lead time & Just in time) ;   PDCA, standardization of operations (production adaptability & multi skilled operators) ;   Visual management, problem solving ;   New management system.


Q1/A : Lean & IT operations

•  More efficient Datacenters ;   To rationalise the datacenters

(less centers and less servers) ;   To externalize the centers (=

offshore) ;   To manage the operations « Lean »

3%#

25%#

18%#54%#

IT#spending#breakdown#

Aministra1on#

Applica1on#development#

Applica1on#maintenance#

From the study, the gains :   Quality 20-30% ;   Cycle time 30-50% ;   Productivity 10-30%. these figures are consistent with my experience in

Insurance back offices & Ph.D work

Infrastructure : ~30 hardware & software ~20 staff

Source ; Making IT Operations Lean, Mc Kinsey, Chartrin C. & all


Q1/B : Lean & Software Development Lean at Wipro (Upton & Staats, HBR, 2006) after two years ; •  no noticeable increase in productivity ; •  better integration (less replanning) of the volatility of the specifications.

We learned that Lean Software Development is based on : •  Just in Time ; •  Standardization of Operations (catalogue of services) ; •  production adaptability (Increase the polyvalence of the staff through skill matrix…) ; •  Visual management (stand-up meetings, Obeya…) ; •  Problem solving (A3…) ; •  New governance.

The lean deployment must be progressive : •  including local experiments using such methods as “agile”, •  And investing in task management or existing processes documentation.


Q2 : IS for Lean - Toyota Motor Europe (TME) IS Dept The principles : •  Hoshin Kanri ; a clear direction ; individual objectives relevant and coming from the company

strategy ; •  A management of Processes and process results with (systematic) PDCA ; •  The IS Dept has an a complementary approach to strategic and practical objectives and it focuses

more on what the company needs, rather than on users’ requests ; •  A strong process focus ("fix Business process first") : Toyota thinks process, IT prototypes can be

made for a section or segment of business for future automation ; what is important is the new process.

The IS Dept manages a plan (medium term) which includes : •  Communication ; •  needs identification ; •  synthesis and consensus building ; •  Its role in "Business kaizen" runs deep, because its business partners (Marketing, Sales…) are

maybe less familiar with the TPS than the production Dept of the company. 15 © Pierre Delort 2013

Case study ; Process Change Request (PCR) PCR=improvement to the business process proposed by a supplier (with gain

sharing) and approved by TME :

The Process performances ;   30% of the requests lost per year ;   a long cycle-time (110 days) ; objective -30 days for the cost-down PCR ;   Multiple interpretations and implementation of the process across Europe ;   No visualization of PCR status across Europe.

The main targets for improvement ;   No more lost PCR ;   Cycle time -30% ;   Eliminate administrative work for registration, handling & forwarding.


Case study ; the PCR project A c. 9 month project, outsourced (Turkish firm) for about 400 k€

1. Requirement ; c. 5 month, in Nemawashi (Business & IT) leads to an A3 (Ringi) composed of ; context of the decision, current situation & problems, target situation and improvements sought after, costs incurred and benefits expected, project organization, position in relation to the (long term) Strategic Action Plan, expected ROI…

•  2.Design ; •  3.Construct ; •  4. Test.

•  A project under control (part of the A3) :

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Case study ; results & conclusion PDCA is for real, the results include : •  an end to the losses of requests ; •  no cycle-time reduction (in fact a slight increase…) ; •  a common process + visualization of PCR status ; •  some reduction of administrative workload.

As a conclusion the Business Case shows that inducing Lean is based on : 1.  Designing simultaneously the process & the application ; 2.  Keeping the decisions in line with the long-term strategy ; 3.  a very specific organization of the "Software Development" function, including Business

partners, suppliers….

Personally, I didn't really find the answer to my question ; how IS can induce Lean ? But my question became more specific (something like) ; which application ergonomic can induce Lean ? … … and Pierre Masai (TME CIO) told me that our study could be used for internal training at Toyota.


Q3 ; Lean and (Big data) digital transformation We defined the digital transformation of the firm as the one driven by Big Data.

We took the example of what Big Data* has transformed in Research : •  the core process ; •  the skills…

19 © Pierre Delort 2013 http://www.andsi.fr/tag/dsi-big-data/ *Induction on a massive scale using data with Low information density, cf.

lecercle.lesechos.fr/entrepreneur/tendances-innovation/221169222/big-data-low-density-data-faible-densite-information-com

Big Data could need Lean We assessed that Lean will be useful, during the transformation, to keep the firm focused on customer, processes and information flows. We concluded with : Lean brings a managerial discipline into the transformations of Big Data.

«Lean for IS for Business»

20 © Pierre Delort 2013 http://www.andsi.fr/tag/chief-data-officer/

Conclusion ; Three new questions

1.  What is the role of ergonomics to induce lean in businesses (IS for Lean) ?

2.  Is the development model of some software players like Google an effective component of the digital business ?

3.  Among the different models of software development, which one to choose depending of Business issues ?

And there is a follow-up….. 21 © Pierre Delort 2013

Follow up ANDSI’s Exploration Cycle : Software Asset Building (SAB) ; •  Google-like (dec 2012) ; •  Agile (jun 2013) ; •  Lean (looking for ; [email protected]) ; •  Waterfall ; •  Versioning.

To understand some relationship between : •  Business features ; •  The relevant SAB style.

22 © Pierre Delort 2013 http://www.andsi.fr/tag/software-asset-building/


Does anyone have any questions for my answers ? Henry K.

Thank you

What IS for the Lean company, by Pierre Delort at the Lean IT Summit

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