Gartner Teleconference Simon Mingay, Steve Bittinger 9 January 2007 The Quest for Quality: An Emerging IT Imperative These materials can be reproduced only with Gartner's written approval. Such approvals must be requested via e-mail — firstname.lastname@example.org.
Strategic Imperative: Of internal and external IT service providers, 75% do not understand the transformation occurring in the industry around defects, productivity and waste reduction. They must look at world-class performers today, and employ quality management techniques, principles and values if they are to compete. This presentation is a result of research conducted recently into the quality management practices of leading IT organizations (both internal and external service providers). We found a yawning chasm between the leading organizations and the vast bulk of IT organizations. Many (but by no means all) of the leading IT organizations in quality management are based in India. Indeed, there is a strong analogy between where the IT industry is today with respect to quality, and where the global manufacturing industry was in the 1980s. The Indian IT industry is now playing a similar role to that of Japan in those days, in that India is driving forward the best practices of world-class quality in IT. The quality capabilities of most IT organizations in the world today can be compared to that of the very average manufacturers of the 1970s and early 1980s. We know that, at that time (with the benefit of hindsight), manufacturing quality was (in general) both dreadful, unnecessary and unsustainable — and so it is today for quality standards in the average IT organization. The quality gap between the best and the worst in IT is inevitably large; but even more worrying, the gap between the best and the average is widening — rapidly! In this presentation, we look at where world class is today and the practices of the leading organizations, and we offer advice on how IT organizations can (and must) leverage some of these practices to substantially improve the effectiveness of their own organizations. If the wider enterprise is engaged in a holistic quality program, it makes life for IT much easier. But an absence of that does not preclude the IT organization making huge strides forward.
Improvements in quality standards have substantial strategic implications for internal and external IT service providers. In the next few years, the top-tier IT service providers will be distinguished by their quality capabilities (encompassing process and service management) — that is, their position in the top tier will be substantially due to their quality capabilities. They will be setting the industry standards for defect levels and productivity . By 2011, IT organizations will look and feel like poor performers unless they have successfully adopted quality programs based on approaches such as Six Sigma and lean across all their activities (for example, application development, application management, infrastructure and operations, planning, administration and resource management). They will lack the ability to keep up with industry norms for defect levels, productivity and speed. Internal shared-service organizations will be at particular risk in the face of increasing demands for them to be competitive. By 2016, many IT organisations (internal and external) that have not deployed quality techniques successfully will fail, be absorbed or be outsourced to those that have. Most of the defects and waste in IT processes are caused by silo-based suboptimization of processes, a silo-based culture (way of thinking and acting), and a lack of focus on or understanding of who the customer is or what the customer really needs. For the next three years, most IT organizations seem likely to continue to focus on the basic IT processes of application development, project management and service management, failing to extend that process focus to all of their activities and failing to change organisational values and behaviors. Strategic Planning Assumption: By 2009, 90 percent of top-tier internal and external service providers will be distinguished by their substantial process capabilities, as well as their quality and service improvement capabilities (0.8 probability).
The presentation has four objectives: To convince you that quality — that is, operational effectiveness — is an imperative for you, not least because best practices are moving fast and will continue to do so for the next 10 years. You can't afford to be left behind. To help you understand that this is a big journey that will take many years. The speed with which the organization can move through that will depend on the quality of the leadership (the single most important factor — much more so than any framework or tool you might employ). But, despite it being a big journey, it is eminently doable. We look at two case studies of organizations that are doing it. To convince you that this is 95% about behavioral and cultural change and to give some guidance about doing that (beyond the essentials of good leadership). The presentation begins by looking at what &quot;quality&quot; means in IT today and establishes what best practice actually is. We establish why quality is an imperative for every IT organization. We then go on to look at what the building blocks are to a holistic approach to quality management. Finally, we look at some of the key best practices, critical success factors and a case study.
Strategic Imperative: IT organizations must understand their competitive position on service quality, defects, productivity and speed and respond accordingly. That response will usually be a holistic quality program. Most IT organizations' quality capabilities focus on quality control (after-the-fact verification and validation) and testing. Best-practice quality management has made huge progress in the past five years, and noticeable progress even in the past two years. The operational excellence that these IT service organizations enjoy is incredibly powerful. The past two years have seen the leaders employing lean techniques, building on the work they have already completed in CMMI, ITIL, ISO 17799 and Six Sigma. There is still a long way to go for these leading organizations, but they are a long way ahead of the pack. Despite achieving substantial improvements in productivity, waste and defect reduction, they continue to drive toward significant further improvements. This even further widens the gap between the quality leaders and everyone else. Although some of them have achieved capabilities such as CMMI Level 5, that by no means defines what world class is. The leaders in the field can choose the appropriate capabilities and standards to deploy based on the needs of the customer and characteristics (for example, risk and complexity) of the endeavor. Most IT organizations trade off quality (defects), productivity and speed against each other. Leaders in the field aim to optimize all three domains simultaneously, make informed decisions about what's appropriate in the situation, and have confidence they can achieve those goals. Most IT organizations have no idea about how many defects they would expect at any particular stage in a process; those that do would typically be happy if they found fewer-than-expected defects. The quality leaders in the field know that if they find fewer-than-expected defects, they have not looked hard enough, and they go back to take another look.
Strategic Planning Assumption: By 2011, IT organizations that have not embraced the principles of Six Sigma and/or lean will be have significantly lower quarter-on-quarter improvements in productivity and higher defect levels than those that have (0.6 probability). IT organizations are competing, whether they think in those terms or not. They are competing against their peers, but more importantly against external service providers. That competition is increasingly based on operational effectiveness. If IT organizations are to compete and deliver the value they are capable of, it is imperative that they focus on operational effectiveness (not to the exclusion of strategic effectiveness). The most effective IT service organizations today use quality programs as a driving force for achieving operational effectiveness. Therefore, IT organizations must employ holistic quality programs — tackling people (values, behaviors and so on), process and technology (automation) — to enable them to simultaneously optimize cost (productivity), time (speed) and quality (defects). A big gap already exists between the productivity and defect levels of leaders in quality and the pack, and that gap is growing rapidly. The expectations and demands of business stakeholders are growing, as exemplified by demands for higher end-to-end service availability (the chart above gives a view on how we see expectations changing). Achieving this availability is the IT service equivalent of achieving Six Sigma quality standards in a manufacturing environment. It mandates strong operational effectiveness and control and will not be delivered simply by improved technology platforms. Operational effectiveness can no longer be focused just on the internal team because organizations increasingly employ a multisourcing strategy requiring integration for end-to-end effectiveness.
Strategic Imperative: Contemporary IT quality focuses on the customer. It requires a common understanding of who the customers are, the way they perceive value and the services they need. It still focuses on processes, but all processes and a more integrative view on processes crossing organizational boundaries. And it looks to optimize defects, productivity and waste (cost, time and quality). Total quality management spawned many improvements but failed to link those improvements to tangible, meaningful business benefits, resulting in too much improvement for the sake of quality alone, and delivering questionable value. Programs like lean manufacturing and Six Sigma demand a focus on the customer and how improvements will benefit the customer. A customer focus also means looking at the IT organization from the outside in (from the customer's perspective). How does it feel to be a service recipient? How do customers perceive value? What would be required to improve the customer experience and value received? Most IT organizations have focused on their core project and service delivery processes. This is usually a good place to start but is no longer enough. Today, organizations must pay attention to all processes, including service fulfillment processes, administrative, HR, finance, strategy, planning and communications processes. Implementing ITIL, CMMI, PMI's PMBOK or Prince (project management) methodologies is only a small part of the story. Quality today is focused on operational effectiveness — optimizing quality (defects), cost (productivity) and time (waste) — which forces attention on developing business value rather than simply focusing on quality excellence, which often results in poor value for the investment. The quality focus has moved from the idea of quality control and compliance in the sense of checks and validation, to building quality into the process itself and putting responsibility with those executing the process — such as embedding testers into project teams and making sure there are clear accountabilities and measures. Certifications, such as ISO 9001, CMMI and ISO 17799, still have a role to play, but only within the context of how they contribute to achieving enterprise goals.
Strategic Imperative: Much has been said and written about employee empowerment, but few enterprises really understand it. It requires a foundation of trust in staff to make the right judgments. It is essential that IT organizations employ a broad range of HRM techniques to develop people so that trust can be won. That trust will drive bottom-up innovation, quality and operational effectiveness. If the definition of quality for IT puts the focus on the customer, what implications does that have? Although process maturity is essential and a foundation, it is not enough. Many IT organizations are developing process maturity, which is good, but they also (wrongly) believe that it is enough when combined with quality control activities like testing. It is not. The leaders in IT quality clearly have a more holistic approach, embracing people (behaviors and culture), process (defects, waste, productivity) and technology (automation). They combine that with a strategic perspective on what makes them competitive, and how they can create sustainable differentiation (which industry best practices can never offer, since they can be copied). IT organizations are overemphasizing process maturity at the expense of developing cultural norms, building trust and developing their staff to make good judgments. A process-capable organization applies the principle of &quot;just enough process&quot; and achieves the &quot;balance&quot; of having &quot;just enough process&quot; by training, teaching and then trusting employees (the &quot;3 T's&quot;) to have the capabilities necessary to make the right decisions (on the front lines). Without that trust, you have to overcompensate with too much focus on process, which turns into a bureaucracy, reducing speed and agility because it becomes focused on control — not value for the customer. This challenge is even greater for the public sector, where there is a long history of &quot;too much process&quot; aimed at improving control and reducing risk. Putting the customer at the heart of quality creates important implications for bringing a range of disciplines under the quality lens, for example, communications, understanding and managing expectations, demand-side governance, service management, and an end-to-end perspective integrating all service teams (internal and external).
Strategic Planning Assumption: Through 2009, two-thirds of IT organizations will focus their quality initiatives on implementing ITIL, CMMI, Prince or PMI's PMBOK (0.9 probability). Strategic Guideline: Good, experienced leadership allows you move this along much more quickly. We have looked at the journey the IT quality industry leaders have taken. Consistently, they have followed very similar routes. The key has been not to focus on certifications and frameworks too strongly, but to focus instead on developing the culture and competencies that give these frameworks their power. Most enterprises have started with a basic quality management system, which ISO9001 (and TickIT) provide. In parallel, they usually start focusing on improving project management methods. They then move onto additional core IT processes — most commonly, CMMI and ITIL. They have then turned to Six Sigma as a way to sustain continual improvement and to further optimize the processes — using strong analytical and data-based techniques, driving out defects and variance in the processes. In the past two years, we have seen IT organizations starting to deploy lean techniques to reduce waste and speed up the processes. However, maturity in applying lean techniques in IT is still low. Up to the point of using lean techniques, all these techniques are typically employed in a top-down, management-driven and controlled approach. Lean marks the beginning of a more bottom-up approach in which staff are trusted to innovate processes and to make process- and quality-related decisions. The next five years will see significant changes in the dynamics of IT management and the style of leadership required for success. The developmental path described above is not the only route, and we have found examples of enterprises that have accelerated their learning curve, usually under the auspices of inspired and experienced leadership. Some enterprises are jumping into the use of lean techniques very early — we have found several employing the lean software development techniques proposed by Mary and Tom Poppendieck in their book &quot;Lean Software Development&quot; (2003).
The best quality programs are holistic — doing the right things and focusing resources and &quot;quality&quot; initiatives on a broad range of issues that help the enterprise achieve its goals. They are also about operations — doing things well. They are about all activities, not just the core activities. Finally, these programs are about the normative aspects of the enterprise — its values, beliefs and behaviors. The most successful quality programs simultaneously tackle changes related people, process and technology. Leadership is probably the single most influential factor in any quality program. If leaders know how to drive change and understand the importance of quality, they'll take the organization with them — quickly. Leaders need to clearly articulate and build a shared vision and establish a set of sustained values, goals and objectives. Policies lay out the guidelines to shape the strategy and behaviors. Every quality program needs sound governance. The larger the enterprise, the more well-structured that governance needs to be, and it typically requires a quality assurance team that lays down process standards and methods, trains, educates, facilitates, guides, measures, reports, and champions the journey. Most importantly, it manages organizational development to drive behavioral change. The team will employ and adapt industry frameworks like ITIL, CMMI, ISO9001 and EFQM. The frontier of quality management best practice in IT is employing Six Sigma and lean techniques. Next to leadership, the most important piece is translating quality into necessary changes in people management — developing the right behaviors, modifying individual and team metrics, and so on.
Strategic Planning Assumption: By 2011, IT organizations that have not embraced the principles of Six Sigma and/or lean manufacturing will be have significantly lower quarter-on-quarter improvements in productivity and higher defect levels than those that have (0.6 probability). Quality cannot be thought about or managed in isolation — and not just because of the need to make the customer be the central focus and to drive business performance through operational effectiveness. Quality must be tied to the goals of improving productivity and improving the speed of processes. The research we have done with leading IT organizations clearly demonstrates that they have all linked quality with productivity, and the more advanced have also linked it to speed. Failure to do so will plunge the program into the mire that many total quality management programs got into in the 1980s and early 1990s. The experience of leading IT organizations is that there are substantial productivity gains and substantial waste in most IT processes today. Those organizations have almost all used Six Sigma and/or lean techniques to drive their improvement programs.
Strategic Imperative: Of the risks and challenges in quality programs, 90% relate to driving the right behaviors. Most of the risks and the big challenges associated with quality programs relate to people. How are you going to convince them that there is a need to change, that there is something in it for them, that the leadership team is serious this time? This requires good organizational development and effective communications. It also requires effectively applying some of the most basic tools that every manager has available. All the quality leaders use these tools to great effect — such as recruiting people who can adapt to the quality culture and taking the time to train, via a formal and thorough induction program combined with ongoing training and refreshers. The quality leaders all use coaching and mentoring, although the formality with which this is done varies significantly. Gartner recommends coaching and mentoring as a best practice for all staff. Getting the individual incentives and performance metrics right is fundamental to driving the right behaviors. Rewarding and recognizing new behaviors reinforces the change that is occurring in the organization. All individuals must understand how what they do relates to and impacts business value and business performance, so that they can apply good judgment in the trade-offs they have to make in their jobs each day. Relatively immature organizations typically exhibit a top-down, management-controlled approach to quality. In contrast, by developing staff to a point where their judgment can be trusted, it is possible to evolve to a more bottom-up, empowered approach — as characterized by Toyota's &quot;Andon&quot; principle, in which anyone on the production line can stop the line if he or she finds a fault.
Strategic Guideline: Every quality or operational effectiveness program should have a dashboard covering customer satisfaction, productivity, defects, service availability, staff development and satisfaction, and value. All the leaders in the field of IT quality make extensive use of dashboards to enable them to provide a fact-based answer to the question, &quot;How are we doing?&quot; All put customer satisfaction at the center. Key metrics include customer satisfaction, staff satisfaction, productivity, defects, process performance, project performance (actual vs. estimate), staff development and service availability. The key challenge in any approach to measurement is to continually focus on optimization of the whole, rather than of the many silos that exist in any organization. When measurements and rewards are focused at the individual contributor or silo level, then people naturally tend to maximize those results — which inevitably detracts from overall performance. These challenges become even greater when other organizations and contracts are involved, because each organization naturally wants to maximize its own outcomes.
Long-term organizational success depends on achieving sustained differentiation, which in turn depends on creating a unique combination of strategy and best-practice operational effectiveness. Organizations performing below best practice can most easily and quickly improve performance by simply copying proven best practices (for example, by adopting ITIL or other best-practice frameworks). However, global best practice is always improving, so as organizational performance gets closer to best practice, it becomes more important to develop continuous process improvement competencies. Six Sigma and lean techniques are powerful tools for driving best-practice continuous process improvement. Operational effectiveness and continuous improvement, on their own, won't deliver sustained differentiation, because others can copy improvements almost as fast as you create them. Instead, sustained differentiation depends on making key strategic choices (to differentiate your product or service offering), and then making those choices hard to copy by supporting them with a range of carefully interwoven supporting processes that are highly dependent on your organization's own unique culture and competencies. Success (if defined as achieving sustained differentiation), therefore, requires: 1) achieving best-practice performance levels, 2) then accelerating the rate of continuous improvement, and finally 3) meshing uniquely differentiating strategic choices with an integrated and optimized set of hard-to-match supporting processes. Source: Adapted from Michael Porter, &quot;What is Strategy?&quot; Harvard Business Review, November-December 1996
Google is a great example showing how sustained differentiation emerges from making key strategic choices and then ensuring that these are supported in a hard-to-copy way via tightly integrated activities that reinforce each other. Complementary activities and processes must be chosen and carefully refined to create synergistic improvements to the overall &quot;mix.&quot; The &quot;fit&quot; of each choice must be assessed for how well it is aligned and consistent with the overall strategy, how well the activities are mutually reinforcing, and how well operational effectiveness and value are simultaneously optimized across the whole. Successful high process maturity organizations universally expand their quality focus across the enterprise — because they are continuously and simultaneously attempting to optimize multiple outcomes — helping them maximize operational effectiveness and achieving sustained strategic differentiation.
This is a relatively small IT group in a business process outsourcing service organization. A new and very experienced CIO was appointed recently, providing leadership that has created a dramatic impact on the quality culture and pervasive business-value-based approach to service delivery. Every problem is viewed and managed in terms of &quot;business impairment.&quot; Every new initiative is viewed in terms of being an opportunity for improving business value. There is a strong focus on performance metrics. Six customer satisfaction questions are asked at the closure of every issue handled by the service desk. Knowing exactly how they are doing helps staff better judge which issues involve the greatest business value, and avoid getting bogged down in paying attention only to &quot;the squeaky wheels.&quot; Rather than having a heavy process focus, the CIO consciously aims to create a culture of quality to guide service delivery. The group has adopted the principles described in Poppendieck's &quot;Lean Application Development,&quot; finding no difficulty in encouraging developers to adopt &quot;sexy new development practices.&quot; To encourage buy-in by staff, the CIO has tasked individuals with researching and then recommending how to undertake new initiatives. After gaining approval, those individuals take charge of implementation.
This is a successful information service company. It has been working on an operational effectiveness and quality program for eight years and has followed the road map we have described, starting with TickIT (ISO 9001), then bringing in frameworks like ITIL, CMMI, BS7799, BS15000, Prince and so on. The company focused first on establishing maturity in its core processes, and then extended that focus across all its processes. The enterprise leadership team has been very engaged — having established a corporate goal of winning the EFQM award. The company has used certifications as milestones to measure its progress and to motivate people. It introduced Six Sigma in 2005 as a pilot. It picked the process it felt to be its most mature process — change management — and tested Six Sigma on it. The company was pleasantly surprised at the improvements it was able to make to what it already considered an excellent process. Because it focused on the certifications (because it believes certification helps it in its market), the company has also had to develop a capability to manage the continuous audits and assessments that come with certification.
At the heart of the Toyota's culture and approach to quality is the famous Andon defect resolution process. Any employee on the production line can yank the Andon cord and stop the production line, if the employee finds a quality defect. Stopping the line would be anathema in a traditional production line, but Toyota uses Andon as a key practice in quickly identifying and resolving defects. Stopping the line prevents defects from creating flow-on effects downstream, where it may be more expensive and difficult to determine what went wrong. Stopping the line also creates a sense of urgency among all the production workers. They collectively analyze the defect to figure out the root cause of the problem and resolve it or find a work-around before the line is restarted. The Andon process can only succeed in a cultural environment where staff are trusted, and that requires strong commitment to staff development and a set of guidelines and values that all staff can apply. We have seen few IT organizations that employ the Andon technique consistently or well. However, as lean techniques are deployed in IT and leaders develop the cultural norms that enable Andon to work, it will happen.
This slide illustrates some of the key themes that distinguish the best quality organizations, and some of the most common pitfalls for organizations starting down the quality path. Use these points to assess and help guide your own quality initiatives. Because of the importance to quality of changing behavior and values, strong leadership and committed sponsorship are essential. Every organization has to start somewhere, and typical early-stage initiatives tend to focus on copying and implementing best practices. The cost and effort of doing so can often be justified through short-term cost savings — and the simultaneous quality improvements that come from process improvements. Get help, if you need it, to create your improvement road map. The effort required to implement improved processes or gain certification can mistakenly lead to becoming overburdened by too much process. Avoid that trap by constantly balancing &quot;just enough process&quot; with business benefit. If you add more process, what is the benefit? Consistency? Reuse? Agility? Or, does more process slow things down or create documentation that is never used? Don't focus on quality improvement alone. Focus instead on delivering and documenting the business value created through those improvements. This creates a virtuous cycle of success, where each small improvement is linked to business benefit and, in turn, helps to justify subsequent improvement efforts. Quality works best when built in at every stage, and when the focus broadens to focus on optimizing end-to-end measures of performance across multiple processes and organizational boundaries.
Don't underestimate the change that is happening in IT. The quality transformation that happened in the automotive industry in the 1980s and 1990s is now beginning in the IT industry — just part of IT growing up. There are many who are in denial about the value of some of the techniques we describe here, as there were in the automotive industry. Most of them got badly burnt. We believe that IT organizations will get similarly burnt unless they recognize the transformation that is happening and focus on improving their own levels of defects, waste and speed. Leadership is the most critical enabler of cultural change and successful outcomes; that's why leadership is so important. Begin with the end in mind. It's a bigger and more complex journey than you might previously have imagined.
Symposium/ITxpo 2006 Simon Mingay October 8-13, 2006 Walt Disney World Dolphin Orlando, FL The Quest for Quality: An Emerging IT Imperative These materials can be reproduced only with Gartner's written approval. Such approvals must be requested via e-mail — email@example.com. 8-13 October Orlando, FL
Symposium/ITxpo 2006 Simon Mingay October 8-13, 2006 Walt Disney World Dolphin Orlando, FL The Quest for Quality: An Emerging IT Imperative These materials can be reproduced only with Gartner's written approval. Such approvals must be requested via e-mail — firstname.lastname@example.org. 8-13 October Orlando, FL
The Quest for Quality: An Emerging IT Imperative Simon Mingay Steve Bittinger
The Quality Capability Gap Is Widening 75% of IT Organizations Quality Leaders British Leyland 1970s/1980s Toyota 2000 Most U.S. & European IT Organizations India
By 2009, 90 percent of top-tier internal and external service providers will be distinguished by their substantial process capabilities, as well as their quality and service improvement capabilities (0.8 probability).
By 2011, IT organizations that have not built holistic, integrated quality management programs and values will be substantially underperforming against industry norms (0.8 probability).
Through 2011, quality problems in 75% of IT organizations will be predominantly defects and waste caused by silo-based suboptimization (0.8 probability).
Through 2009, 75% of IT organizations will focus their "quality" initiatives too narrowly on implementing ITIL, CMMI, Prince or PMI's PMBOK (0.9 probability).
Through 2009, two-thirds of IT organizations will overemphasize process at the expense of developing staff and the appropriate values and behaviors (0.8 probability).
1. What does quality mean in IT, and why should you care?
2. What are the building blocks for an integrated approach to quality for IT?
3. What are the best practices from leading organizations, and the most common pitfalls that block success?
Where Is 'Best Practice' IT Quality Today? The ability to choose the appropriate process maturity. The ability to simultaneously maximize productivity, product quality, defect level and time. If you don't find the defects you expected, you know you missed something. Integrates CMMI, ITIL, Six Sigma, lean Of course! But built on powerful culture. You have to live it, breathe it — but above all, believe that "quality excellence" is an imperative. 80%+ reduction in defects, 140%+ increase in productivity over five years (from good base).
Competition — Increasingly based on operational effectiveness and agility
Demands for higher productivity
Future role of IT organization is highly dependent on its ability to build credibility
BPM requires skills in holistic quality capabilities, e.g., Six Sigma
Standard Availability High Availability Continuous Operations No Downtime Now 3 Years 5 Years General Trend in Availability Expectations Productivity Time Six Sigma Lean Frame- works
What Does Contemporary IT Quality Mean: 'Better Outcomes and Experience for Customers' Core IT process maturity All processes, people, automation Focus Attributes Optimizes Contemporary IT Quality
Doing things well
Quality control and compliance
Business "believes it"
Traditional IT Quality Processes
Doing the right things well
End-to-end, integrated supply chain
Build quality in, and building trust
Achieving enterprise goals
KPI and value driven
Business demands proof
Defects, Productivity, Waste
Implications: Moving Beyond Process 'Better Outcomes and Experience for Customers'
The "customer" should be the start and endpoint of quality for IT organizations today. Understanding and meeting expectations is critical.
IT must understand who its customers are and what value means to them.
Every activity must be contextualized and prioritized around an assessment of customer value.
Quality and operational effectiveness are two sides of the same coin, so cannot be separated.
A holistic approach to quality is required.
Don't rely on process just to "control" events and activities.
Process Maturity Cultural Norms Developing Good Judgment People Process Technology Developing Trust — In and With IT Staff
The Quality Journey Quality Management System ISO 9001/TickIT, Prince/PMBOK CMM(I)Agile ITIL CobiT Six Sigma PCMM Investors in People Lean Document what you do, do what you document. Develop a best-practice process. Improve and innovate the process. Build quality around people processes. Reduce waste, increase process speed. 10 years Top Down Bottom Up
The Quality Building Blocks: The 'Architecture of Quality' Vision Goals & Objectives Measurement Framework Quality Improvement Methods and QMS (Six Sigma, Lean) Values Leadership Policy Organisational Change Mgmt. Governance, Program Oversight (QA) and Communication Core IT Processes Fulfilment Processes Admin, Planning & Resource Mgmt. Processes Staff Recruitment, Development, Metrics, Rewards and Recognition Industry Frameworks and Standards (ITIL, CMMI, EFQM, etc.) Build Trust to Make Good Decisions
Quality, Productivity and Speed: Simultaneous Optimization
Failing to link quality, productivity and speed will result in quality for the sake of quality
Mature IT organizations are achieving substantial improvements in productivity and waste reduction
Using lean and Six Sigma
Why Six Sigma and Lean? Both: Tackle process maturity Drive productivity Six Sigma: Tackles defects and variance in a process Lean: Tackles waste and increases speed Operational Effectiveness Quality (Defects) Productivity Speed
Building the Values and Behaviors: Building Good Judgment Recruitment Induction Coaching and Mentoring Ongoing Training Personal Measures Rewards and Recognition The Tools That Are Used by the Leaders Building Trust To Enable Empowerment Personal Link to Business Value Organizational Change Competency Development
Do You Know How You're Doing? YTD 2006 IT Key Performance Indicators Overall Customer Satisfaction: 89% 350% 300% 250% 200% 150% 100% 50% 0% Actual vs. Estimate Actual / Estimate Outstanding Calls 350 300 250 200 150 350 300 250 200 150 350 300 250 200 150 Outstanding Calls Target Training Days 3 2.5 2 1.5 1 0.5 0 3 2.5 2 1.5 1 0.5 0 3 2.5 2 1.5 1 0.5 0 Days per head Target days 6 8 10 12 14 16 18 Cost / Enq Target IT Costs per External Customer Inquiry 98.6% 98.8% 99.0% 99.2% 99.4% 99.6% 99.8% Actual Target Critical Services Availability 84% 86% 88% 90% 92% 94% 96% 98% Target Zero defect changes Operational Change Effectiveness IT Value Added 1000% 800% 600% 400% 200% 0% 1000% 800% 600% 400% 200% 0% 1000% 800% 600% 400% 200% 0% Value Added Target Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 0 2 4 6 8 10 12 14 16 Development Productivity Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Actual Target Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Function pts / Day Target Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May B E T T E R B E T T E R B E T T E R B E T T E R B E T T E R B E T T E R B E T T E R B E T T E R
Best Practice Operational Effectiveness: Necessary, but Not Sufficient Source: Adapted from Michael Porter, "What is Strategy?" Harvard Business Review, November-December 1996 Cost Quality Low High Low High B Achieving best practice requires optimizing cost and quality A Less Than Best Practice Current Best Practice Copy Best Practice Future Best Practice Continuous Improvement Extends Best Practice C Sustained Differentiation Strategic Choices Interwoven Proceses
No.1 Internet Search Free Scalable Inno- vation Google Brand Simple No Frills Good Search Results Ad Revenue Platform Comple- mentary Tools Hire the Best Way of Life Freq. Releases High Wages Rule Breaking Do No Evil Risk Taking Cost & Product- ivity
Case Study: BPO Services Combining Agility and 'Right First Time, Every Time'
Principles of Quality Program
Business value driven
Build integrity in
Know how you're doing - precisely
Judgment first, process second
Used lean in AD. Used idea of "business impairment" in ongoing service delivery
Testers, infra., ops., app. support and app. dev., and quality activities integrated into project teams
Used consultants selectively, but all efforts based on internal research
Use internal people from outside IT to critique and identify improvement opportunities
Built on process standardization, then automate, e.g., scripted testing, release
Strong focus on developing people
Case Study 2: Information Services — A Good Start Project Management Control IT Quality Framework ISO/IEC 20000 Service Mgmt. Processes Service Improvement Program CMMI ISO 9001 /TickIT Six Sigma Project Method Prince 2 ISO 27001 Service Security Development ISO Accreditation EFQM IS Cost Model Continuous Improvement Program Financial FAST SOX Six Sigma
Quality Management Tomorrow — 'Andon' — Putting Control on the Front Line By 2012, Toyota's Andon principle, where production is stopped when a staffer spots a quality problem, will be implemented in an IT operations and project environment (0.6 probability).