Delivering a 32 percent increase in capacity in 12 months by tackling the root causes of inefficiency and enabling managers to become coaches
At a major financial institution, two-thirds of the application development and maintenance staff was working on maintenance tasks (where best practice puts maintenance work closer to 40–50 percent). Staff were constantly diverted from high-value preventative work to deal with urgent requests, resulting in a constantly growing backlog.
As far as internal customers were concerned, the entire change-request process appeared woefully inefficient. The IT maintenance function appeared to be poor value for money and far from transparent. Even in the most urgent cases, only a fifth of the time needed to effect a change was real processing time. Less urgent change requests could, in extreme cases, take more than 2 years to be resolved. Staff morale was low. "It is often the storm, but we never get the calm," said one IT manager.
In the first phase of the work, the McKinsey team conducted a lean diagnostic to understand the performance of the IT maintenance function. It found that exchange of best practices across the group was almost nonexistent, and interaction with outside IT departments was cumbersome. Just over 10 percent of time was spent on value-adding activities. The situation was unsustainable and damaging the organization's ability to operate in the best interest of its customers. It was clear that a just-in-time lean approach would be more accurate and effective, and if it were implemented correctly, the whole IT maintenance team would feel ownership of the new process.
As part of the transformation, the McKinsey team worked with the IT maintenance staff to assess the time needed for any change request, agreeing on a consensus estimate. This process encouraged best-practice sharing and built commitment from the whole team to stick to the agreed timeframes. Another part of the solution was a major shift in how staff capacity was used. Rather than turning to new projects when they had time, staff instead helped their colleagues complete change requests already underway. A lean whiteboard was introduced, enabling best-practice sharing and making capacity and achievements transparent for the whole team. The board clarified ownership of any given request and was used to check on estimated time to complete vs. time taken.
As with all lean transformations, these process improvements alone were not sufficient. To foster a culture of continuous improvement, managers were trained to see themselves as coaches.
Overall, the IT maintenance group delivered a 32 percent increase in capacity in 12 months. The new processes and more collegial way of working freed significant time for working on preventative maintenance and adding additional value. Almost half of the time saved came from standardizing operations and sharing best practices. The rest came from better planning, better use of management time, and other adjustments to the entire process. Critically, and a major factor in getting buy-in for a second phase of the transformation, more than half of the total savings were realized in the first 6 months.