Most industries and companies are becoming increasingly dependent on IT. The majority of strategic initiatives launched by companies now take advantage of technology, creating a challenge for CIOs to deliver IT solutions quickly, efficiently and with high quality.
Here at Nationwide, we are faced with similar challenges. Nationwide, a financial services and insurance company with $26 billion in revenue and an IT spend of well over $1 billion annually, is charged with building a globally competitive IT capability that supports the needs of our highly diverse businesses.
Over the last seven years, Lean and Agile practices have played a major role in transforming IT operations to become more effective and efficient. While Agile and Lean are not new to the IT industry, the way the organization has applied Lean to scale Agile practices to hundreds of development and maintenance teams is rather unique.
Nationwide IT’s journey with Lean and Agile began in 2007, when several application development teams experimented with various Agile practices and found them to be valuable. However, we lacked a set of best practices that everyone could use and a set of metrics that helped track the economic benefits of Agile practices.
In 2009, we decided to build a development center and started by “seeding” it with three to four Agile teams. These teams were empowered to document a set of best practices that could be used by all development teams. Lean techniques were used to roll out these practices to the remaining development teams over multiple years.
- A set of standard role profiles for scrum masters, tech leads, requirement leads and test automation leads was developed
- A standard set of visual management systems was implemented
- A continuous improvement system was used to encourage associates to improve the standard set of practices based on real life experiences
These are all examples of Lean tools used to scale Agile. Over the last several years, these practices have been consistently deployed to 65 development teams supporting multiple technologies and business units. In 2015 alone, these development teams delivered more than 200 application releases; 85 percent of them had no defects and 57 percent were in the top quartile for productivity when compared to the industry.
By 2013, we had seen enough evidence that Lean and Agile practices were making a material impact on our application development productivity and quality. We decided to apply a customized version of these practices to other IT value chains such as application maintenance, IT help desk, and infrastructure and operations.
Across these value streams, we have been able to gain between 15 percent and 20 percent labor efficiency:
- Lean application maintenance has delivered $34 million in annual savings with an 18 percent reduction in labor costs
- Lean IT help desk has delivered $2 million in annual savings with a 17 percent reduction in labor costs
- Lean transformation of infrastructure and operations is still underway but has already delivered $21 million in annual savings with a 15 percent reduction in labor
These efficiency gains have been realized, while maintaining or increasing quality and associate engagement. The successful deployments of Lean and Agile practices led us to question, “If these practices work for associates, will they work for IT executives?” Based on this, we have been experimenting with a Lean Management System for CIOs. We deployed this management system in my organization in 2014 and have found it to be incredibly valuable.
Based on this experience, my peers have decided to deploy a similar Lean Management System in their organizations. Lean Management Systems use concepts similar to front-line Lean production systems, promoting continuous improvement and eliminating wasted time and effort. One of the Lean methods we have put into practice is a visual management system for senior executives and their teams. Using big, visible charts of metrics allows teams to track work, identify and escalate issues, and assign accountability from start to completion.
Visual management encourages transparency and removes roadblocks. It teaches associates to look for patterns, and if a problem occurs, they are able to quickly make process improvements and ensure the same problem doesn’t happen again. At Nationwide, our IT departments are building a culture of transparency, collaboration and problem solving – rather than hiding issues or trying to look good at all costs. We are continuously improving our processes by reflecting and learning from our mistakes. We have become a more efficient organization and one that is better positioned to deliver strong results to our members.
If you would like to learn more about Lean, please visit www.lean.org/WhatsLean.
(About the author: Guru Vasudeva is senior vice president and chief information officer of program & application services at Nationwide)
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