What Enterprise IT Can Learn From Industrial Engineering
Budget-challenged IT organizations would do well to adopt the efficiency policies of industrial engineering. It applies efficiencies across enterprise operations, not just in specific areas.
Walk onto a busy manufacturing floor, and the first thing you notice is how little you notice. Each of the myriad activities fits neatly and unobtrusively into the big picture. The casual observer can barely begin to comprehend the amount of planning and engineering that has gone into making the operation appear to flow seamlessly from raw materials to finished product.
In more ways than you might think, the manufacturing floor -- and the industrial engineering that makes it work -- have lessons to teach those of us in the world of enterprise information technology.
Just as an auto plant can experience bottlenecks and re-engineer its process to correct them, so too can IT programs. We're not making autos or widgets, but many of the same issues that slow down and add costs on a manufacturing floor also adversely affect the delivery of IT services. And similarly, the same engineering disciplines can be applied to correct problems and improve efficiency in delivering those IT services.
As organizations of all types face increasing pressure to become more efficient in all facets of their operations, enterprise IT program teams can help them by using industrial engineering principles to drive out costs and drive down cycle times in IT service delivery -- without sacrificing quality.
The case for industrial engineering Although industrial engineering and enterprise IT might seem like strange bedfellows, the commoditization of IT services necessitates that the IT industry -- especially firms that integrate information services for the federal agencies -- find new ways to prevent budget pressures from eroding service quality.
Too often, the goal of cost savings creates a temptation to sacrifice the skill level of the program team and the on-going focus on continuous process improvement. But using less-experienced IT engineers and technicians, and eschewing the investment in process monitoring and improvement, is not a cost-effective strategy in the long term. Eventually, it will undermine the value of the service product by resulting in increased downtime and a reduction in the customers' mission readiness.
Industrial engineering principles, on the other hand, can achieve cost savings through process improvement while retaining highly skilled people. To achieve maximum effectiveness, these principles and practices should be applied, not only in the actual delivery of services -- from desktop upgrades to datacenter management -- but also in the back-office processes that support them.
Product and service delivery To apply industrial engineering principles to product and service delivery, IT team leaders might benefit from more fully adopting the process-flow diagrams used in industry and identify specific steps and cycle times, including the mean time of interruption for each step. Such a diagram enables the IT team to clearly see and understand how each step affects the others.
State-of-the-art industrial engineering, reflected in Tesla assembly operations, has lessons for enterprise IT. (Source: Chrishmt0423, Creative Commons)
Armed with this process knowledge, the IT team is able to identify steps that can be automated with software tools, combined to reduce cycle time, or both. When experienced program managers implement this approach, it results in a more efficient and cost-effective process.
The approach also lends itself to sharing across IT teams at large enterprise IT providers with widely dispersed teams serving highly diverse programs. Efficiencies identified and implemented on one program are often equally effective when applied to similar programs. To make this sharing possible at larger companies, like ours, we have created an engineering matrix, cross-referencing all of our current and prospective enterprise IT contracts with the technical expertise required for each.
The matrix identifies subject matter experts on multiple program engineering teams. Rather than being walled off within individual programs, the engineering teams all report to a common director. This structure allows program managers to quickly identify where specific expertise resides within the organization and makes it possible to share lessons learned and best-practices among engineering teams.
Although a systematized approach to horizontal communications is more common in engineering disciplines, it traditionally has not been fully exploited across disparate programs served by the same contractor. When it is, a large enterprise IT service provider with a deep pool of experts working in diverse program environments can make better-informed decisions, avoid mistakes, and improve processes based on what others in the organization have already achieved.
Streamlining the back office In addition to applying directly to customer-facing program activities, industrial engineering principles can greatly reduce cycle times in a variety of internal administrative functions, such as order processing, procurement, and billing. Again, these functions are easy to overlook in the pursuit of programmatic efficiency, but they are, in fact, fertile ground for driving out time and costs.
For example, suppose an employee wants to upgrade his desktop computer, and you're the provider of that service. The employee goes to a catalogue and initiates an order, which triggers a series of financial, accounting, contractual, and supply-chain events. All of these events are driven by the same data, yet they are executed essentially through manual actions within different parts of the organization.
Industrial engineering practices, on the other hand, enable the provider to streamline the process by automating many of the steps. They also allow the provider to offer better reporting for customers, which increases transparency and enables customers to perform program planning and analysis more effectively.
Technology road mapping Another best-practice that can improve the value of enterprise IT services involves creating a multiyear technology roadmap for customers. Although not an industrial engineering practice per se, technology road-mapping helps the IT team work with customers to identify value opportunities for performance improvements and cost savings. At the same time, it helps customers to identify potential product obsolescence and avoid unplanned expenses.
Perhaps the only aspect of the future of enterprise IT services that anyone can know for certain is that the drive toward lower costs and improved performance is here to stay. From our experience, we believe that the most effective way to achieve those goals is to strive for efficiencies across enterprise operations, not within discrete activities or tasks alone.
By applying industrial engineering principles and identifying ways to drive out waste through process efficiency, we believe IT departments can meet their budget goals while maintaining high standards of customer service and systems performance.
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Stephanie C. Hill is Vice President and General Manager of Lockheed Martin's Information Systems & Global Solutions Civil business, which serves various non-defense US government agencies and regulated commercial industries. Hill leads more than 9,500 employees who ... View Full Bio