What's the big deal about IT innovation? IT executives have been doing more with the technology their companies already own for a long time now, said senior executives at the Gartner CIO Leadership Forum last week, where the latest buzz was around lean operations to eliminate waste in IT and thereby add value to the business.
That's the approach Nationwide Mutual Insurance Co. took by engaging software services provider Wipro Ltd. to help it gain process efficiencies in such areas as application development and maintenance. Wipro, in India, was an early adopter of the lean operations methods pioneered by Toyota Motor Corp. in Japan for manufacturing automobiles.
As Wipro's lean operations unfolded, Bradley Staats, assistant professor of operations, technology and innovation management at the University of North Carolina's Kenan-Flager Business School, studied the process and the results. "It really did improve performance appreciably," he said.
In addition to improving performance by identifying and eliminating waste in a process (as deduplication does with redundant data) lean methodologies focus on customer-centered value, often deriving product directives from the most customer-facing technologies, according to experts. Lean operations also identify interdependencies and process redundancies by involving people from various departments -- another example of how the enterprise is flat.
Instead of finding a use case for new technology, lean works backwards: First, the team discovers the challenges that customers need to solve; then it focuses on solutions to that challenge; then it delivers on a plan to do that "just in time."
Lean operations at Nationwide
Columbus, Ohio-based Nationwide, which undertook the lean approach in late 2009, has seen a $2 million return for its efforts already, according to Mimi Chizever, vice president for claims technology at the insurance company. Partnering with Wipro, Nationwide identified projects "with good scope" that could be turned around in three or four months, to showcase delivery of lean objectives, she said. "We had great optimism coming out of the project," she added. "Our managers and associates thought it was a good common language."
The 17 projects Nationwide has since put through the lean operations process include topics as diverse as application development, demand management, IT service desk, call handling and application maintenance.
It's a more granular level of planning, and understanding dependencies up front.
Mimi Chizever, vice president for claims technology, Nationwide Mutual Insurance Co.
Of the 5,000 employees in Nationwide's IT department, 350 have been trained in the lean philosophy and methodology, Chizever told attendees at the Gartner CIO Leadership Forum in Scottsdale, Ariz., last week. Nationwide, which considers itself as much an information technology company as an insurance company, is "looking at governance structures to create virtual lean management offices," she said. "It's important to maintain good sponsorship and senior management support, and reinforce acceptance of this at all levels of the organization."
Nationwide has about 10 tools in its lean toolkit that it consistently uses to root out the interdependencies of tasks, according to Chizever. "The methodology at Nationwide is good for large projects, but can be overkill for small projects," she said.
The company adheres to two lean tenets that are beneficial for projects of all sizes: visual controls, or charts; and a dedicated team room. The team creates visual charts that then get posted in a team room for collaboration and problem solving, Chizever said. For big projects, people are dedicated full-time, and come together in the team room during regular business hours.
It's all about process efficiency, eliminating waste, and improved communication and collaboration, according to Chizever. "It's a more granular level of planning, and understanding dependencies up front," she said.
Quantitative results from lean
Nationwide started working with Wipro in 2009, and now its goal is "growing our own and becoming a self-sufficient organization in the development of lean," Chizever said. "We've had a great year with lean. We are beginning to realize tangible benefits as the result of the application of lean. At the end of 2010, we estimated that we saved $2 million by eliminating waste and through process efficiency."
"We also see cycle-time reduction on development," Chizever said, noting the benefits of earlier having identified dependencies and problems in the lifecycle. "The later you find them, the harder it is to fix them," she said.
Above all, lean involves a lot of focus around customer value and requirements at a detailed level. "Lean does a great job of helping to identify that we're doing the right work with the right way with the right people," Chizever said. "It's an iterative process, with more focus required earlier in the project lifecycle, and consistent understanding of roles and responsibility across the project."
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