The Pressures of Demand and Supply: Making IT Better, Faster, Cheaper


The IT industry is going through a profound shift based on market pressures it has, in one sense, helped to create. The speed and cultural expectations that have evolved from an Internet/streaming economy have created a business culture and expectation which requires unprecedented levels of agility to remain viable — let alone profitable. This has created a downstream impact on internal and external IT providers, who must find ways to optimize the way they process requests and deliver services.

However, one might argue that the need to move faster has always been a constant pressure. While this is true, there are relatively recent, unique factors that have kicked this requirement into high gear over the past three years.

Localized Optimization in IT Value Streams

Lean and systems thinking teach us that any value stream is constrained by its bottlenecks. To even identify where these bottlenecks exist in a system, one must be able to visualize the IT value stream in order to identify areas of blockage.

The challenge with this is that traditionally, IT has not been optimized from a value stream orientation.  Instead, IT has been focused on localized and domain optimization, based on vertical, silo-based technology towers. While the lifecycle concept of Plan-Build-Run has been around for a dog’s age, and frameworks such as ITIL®, TOGAF, and COBIT® have provided systems thinking context and examples, the governance of IT has been fragmented by the technology domain.

This means very few IT leaders look at optimizing the flow of the enterprise value system, but instead look for ways to optimize Plan-Build-Run activities as distinctly different focus areas. Look closely and you will see that many organizations will have separate strategies for each technology tower without considering the full system’s performance.

An Unsustainable Model for Managing IT Complexity

This fragmented approach to governance increases complexity as organizations increase the variability (Mura) inherent in establishing different processes, suppliers, and technology strategies to address the issues of growing demand. This increased complexity and localized variability comes with the expected impact of creating more opportunity for waste, defects, rework, and error — all of which conspire to impact the organization’s ability to scale and accelerate.

To compensate, IT professionals have been kicking in the extra effort, capacity, and time to keep the flow moving by working evenings and even forgoing their weekends to deal with release or support issues.

This is not a recipe for long-term sustainability on many levels. Beyond the harmful impact on people’s personal lives, this type of unhealthy system drives burnout, from trying to do more than is possible. IT professionals, regardless of their skill and goodwill, are unable to create more time in the day to continue to compensate for fragmented systems. To use an old saying: “You can’t get more blood from a stone.”

Balancing Supply and Demand in IT

Two factors are influencing a company’s ability to realize customer objectives at a competitive speed: the increasing rate of demand and the stagnant rate of supply. Any reasonable consumer of a service will quickly begin to look at alternative suppliers if they realize that a company has an increasing backlog of work and long queue time before their request can be addressed. Simply put, tell me I have to wait several weeks/months for my urgent request to be handled, and I’ll need to look somewhere else for a solution.

We see this in the increasing use of directly purchased cloud services, contracted third-party IT services, and the funding of increased shadow IT functions. All of which, unfortunately, continue to add to the complexity and decreasing speed of the overall IT value system.

Lean for Better, Faster, Cheaper Value Delivery

To compensate for this growing pressure, IT organizations have finally begun to focus on optimizing their horizontal IT value stream as a complete system. They’re turning to the principles of Lean, which are focused on quality and flow. Lean principles have, in turn, spun up the practices of Agile software development and recently, DevOps. All of these concepts have one thing in common: speed.

As a speaker, consultant, and author, if you were to ask me what the topics of conversations around the IT water cooler were five years ago, I would have quoted you words such as availability, risk, compliance, reliance and maturity. However, the language of today has drastically shifted from those terms to focus on words such as agility, flexibility, performance and velocity. We’re seeing a complete pendulum swing from one side to the other based on the challenges I have outlined in this post.

We have to find a way to deliver on requirements for both speed and quality. “Better, faster, cheaper” implies that we continue to deliver quality — just with more efficiency. In order to achieve this, we must reverse the increasing complexity of our organizations by identifying, standardizing, and automating our IT value streams.

We need to understand how work flows from request to its fulfillment in order to identify bottlenecks, remove waste (Muda), and manage WIP for optimal flow. To do this, we don’t have to reinvent the wheel; we just need to understand that in order to accelerate our businesses, we need to accelerate the IT management processes that have been well documented in frameworks such as ITIL® and COBIT®, and take advantage of the opportunity to standardize processes and services.

Final Thoughts

In short, the IT industry is finally waking up to the fact that localized (or siloed) optimization is not going to take us where we need to go, or allow us to deal with the speed imbalance of supply and demand. Leading with Lean principles means that we recognize that our IT value streams have to be optimized for flow. Practicing Lean or Agile means that we aim to improve them every day.

Troy DuMoulin

Troy is a leading IT governance and service management authority with an extensive background in executive IT management consulting. He's a frequent speaker at IT Management events and is a published and contributing author on topics such as Lean IT and defining IT success through the service catalog. Connect with him on Twitter.

2 thoughts on “The Pressures of Demand and Supply: Making IT Better, Faster, Cheaper

  1. The move by business partners to move outside IT is not a new phenomenon. when we were doing waterfall and taking 18 months to deliver (limited) value we saw our business partners reaching to outside IT management consultants to run projects who claimed to be able to do it cheaper, and faster. These standalone solutions never integrated and as you note created more complexity and issues.

    In your final thoughts you note that siloed optimization is not the answer. I fully agree. It is a struggle to begin the process to move a single group or department as a proof of concept to a new delivery methodology such as DevOps. So how can we influence the siloed leadership structures who feel threatened by these new methodologies as they tear down the walls that have been built up to the protect the empires and fiefdoms they have built?

  2. Hello Doug,

    Acknowledge that the move to third party and so called dark or shadow IT is not a new phenomenon. Just as the cry for, “Better, Faster, Cheaper” has also been with us for at least the last decade. Whenever a supplier is frustrating to deal with, does not seem to have your best interest in mind, lacks a true understanding of your priorities the customer you will find an alternative route to obtain the service you need. In short constraints / bottlenecks do not ultimately stop flow they encourage the flow of demand to find alternative routes.

    In my opinion the difference we are seeing now is that the ever-increasing speed of demand coming up against an inability to scale is accelerating this trend. In essence time, patience and willingness to live with the status quo is what is rapidly changing. Flow will find a way and either the internal IT supplier finds a way to channel that flow by opening up accelerated sluice gates or they will eventually find the levies bursting to the point they will experience a massively disruptive crater event that will change everything with the collateral damage on all sides the comes with this type of situation.

    To answer your point on struggling to move a single group or department as a proof of concept may I suggest that the focus move from your structure to focus on a specific service-line. One of the challenges I often see in organizations that are attempting to move to the Lean, Agile, DevOps approaches is that they designate an existing vertically oriented group or department as the DevOps team. This creates a negative impression in the organization by having one (usually Dev. team) become the focus and the new cool kid on the block who gets the love, funding and fancy toys. The challenge is that this team does not represent a true cross-functional team structure including team members from the full life-cycle focused on a specific Service-Line. My recommendation is to pick a specific business service and to initially create a matrix team where the individuals still have a functional reporting to a functional manager but are dedicated to this new Service-Line team on a dotted line. To enable these teams, specific Lean practices need to be a focus. Ensure that the team members are truly dedicated to this Service Line to avoid context switching issues, utilize visual management tools such as value stream analysis and Kanban to build team identify and optimize flow. Move to smaller batch sizes on work activity to lower risk, improve quality at the source and improve the speed of value creation. Establish good practices for software configuration management and automated deployment. And above all measure and promote the improvements in Lead and Cycle time.

    In short, proving the concepts in at least one pilot team focusing on the right activities will be the key to opening up the rest of the organization. This first team will be the hardest to sell and gain buy-in for so make sure they are enabled to deliver on the promise. Success will build success.

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